Dear Rod, understanding and using effectively technical indicators is not simple stuff. Those who use them successfully, use them the way a card counter plays black jack to change the odds to better than 50/50. You don't bet the farm. But after I identify a stock that is a good investment, I use technical indicator to take profits off the table. I also use technical indicator for buying in and timing when I am going longer. I've been investing 200+ trades a month for only 8 months and maybe in a year or so I may feel confident to start investing/gambling more actively with technicals. If my understanding of the investment value of the companies where I've invested is really correct, then I will have lots of other peoples money to play with.
The products being sold for technical analysis are superb for learning what the indicators tell and getting a feel for what they may predict. And with care and thought all with a reasonalble degree of intrinsic common sense can change the odds to better than 50/50. Are discipline and common sense traits that you would associate with the average investor based upon the volitility of stocks like corl.(Well considering corl, are these traits of any investor.;-) )
To me a validation of technical indictors comes from internet and Linux stock fluxuations which are psycho momentum driven and I do believe that they provide proof of a never ending vast group of really dumb investors who don't have a clue. I use technical indicators to take their money over and over and over again.
All good advocate/teachers of technical analysis will caution and caution and caution. Technical analysis takes time to learn and takes discipline. Many weak minds will never get it.
For any looking for a rational and caution education on technical analysis. Equity Analytics, Ltd tutorial on technical indicators. e-analytics.com
Rod, I do agree that some of the sales method of companies selling software tools for technical analysis are sucker bait for the weak minded, but the value of the tools when used intelligently can easily pay for the investment. So maybe in this case we need to kill the messenger for the message but buy the tool anyway.
So for a data point. the current technicals for aplx suggest that 17 3/8 is the current very strong support level. We shall see and I may go 5k shares at that support level.
Now corl to me is a bad investment, so I don't care what the technicals are.
From the above listed site. Conclusions on Trading system's
I have always considered speculative trading more of an art than a science. The best traders I've ever
seen use technical analysis indicators and intuition. However, despite their intuition, one thing
common to all of them is that whether they can articulate them or not, they all have a set of well
defined rules they trade by. They consistently generate very nice profits.
If you are considering buying technical analysis software be very skeptical of systems that advertise
tremendous results. They have probably been over-optimized to show excellent back-tested results
and won't work when you try to use them. Of course the company will have a whole list of reasons
why it isn't working well at that particular point in time. However, excuses don't do you any good
when you're losing hard earned money. Drawdowns are money out of your pocket. You will never
make it back.
Last, what works for one trader may not work for another trader. If it works for you - that's all that
counts.
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Tom Watson tosiwmee |
