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Strategies & Market Trends : Analysis Class for Beginners
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To: Trader X who wrote (1253)2/27/2001 9:35:44 AM
From: Arthur Tang  Read Replies (1) of 1471
 
TraderX did a valiant try at TA?

First, never do trandlines on most recent curves; in a few days the projection will make your analysis faulty. John Murphy learned to draw two vague(not close to the highs and the lows) horizontal lines instead of trendlines redrawn. There is wisdom in that kind of analysis because it will not embarrass himself in the near future. And also everyone can do technical analysis correctly on old charts. That is why TA was invented. In real life, resistance and support in vagueness is more right than wrong.

Second, your ballons on fundamental events must include volume spikes. Price offer pulled back ahead of large sell volume indicates market makers were working out the customers sell orders(no oversold). Price moves up 10% on large volume, market makers shorted; overbought caution flag goes on. Several volume spikes were not noticed in your charting.

Third and final point is that microTA is on the fly not five day charts. And you have to have momentary oversold and overbought noted as you chart.

Normally I don't respond to people's posts; Knowledge collaboration is methodology first. Correcting error is not good, doing it perfectly is most important on the first try.

When you put down your money, you have only one chance to make money, you have to cheat becasue you have to have more data connected to predict human nature in their investment strategy. You have to win over all the other bets; because market makers are bookies(that is why overbought and oversold is so important in TA). If you just buy and hold for 5 years, you do fundamental analysis. Ask any analyst? Never ask any technician?
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