| | Why I like TA!!!
An Exploration of the Market - part 1
Yes, people, believe it or not, I like TA. TA gives me a lot a information I find extremely useful.
TA gives me a broad picture of the market. Because of Drbob's excellent posts I can get a very quick snapshot of the market. I can learn the number of advancers over decliners, the volume, and all the internal indicators.
TA also tells me support levels and resistance levels. The very intelligent posts from Phoenix and others tells me retracement points.
All of this helps me understand exactly where the market is right now. And by knowing where the market is right now, I may get a strong hint of where the market is going.
The trend is your friend is very true. If all the market is going one way, I may have second thoughts on betting on a stock to go the other direction.
I learned this the hard way. In my early trading days when the market was suffering from irrational exuberance I started out a news hound. I firmly believed news was the primary mover of stocks. Sometimes I was right. Sometimes I was wrong. I wasn't even paying attention to the indexes back then. (I probably made money soley on the fact the indexes were almost always going up).
In an exploration to better understand the market and why news sometimes didn't move stocks I discovered TA. It made a lot of sense. I discovered that when the world was lined up against you, great news (often a reflection of fundamentals) wouldn't move the market.
So I started paying attention to TA. This doesn't mean I have abandoned the effect of news on the market.
Day in and day out I've seen news create a small detour in the trend. As a short term trader this can be unsettling so I always factor in what news I know in making my decisions.
I also have come to realize TA just can't be ignored. Too many people are following it, and in many instances it becomes a self fulfilling prophecy in the short term. And as a short term trader I simply can't ignore these market possibilities.
Now did the I-man get religion. Is he now a TA advocate?
No TA is one tool in my arsenal. I hope you read my next installment what I don't like about TA, and the one after that, How GA (gut analysis) can excel over TA.
To limit rambling debates that so many detest I may not respond to responses to this post. You can have the last word. (maybe) |
|
