Re: Is Technical Analysis Really Works ???
Dear Loknath,
Sharing my observations
- TA is a tool to pick LOW RISK trades
Av - Technical analysis just points out to the possibility of price action in the future...you have to look for evidence, cross verify, go to the past and future...AND THEN DECIDE whether the probability of occurance AND the CHANCE of FAILURE fits within your RISK - REWARD ratio. Using different forms of money management with different account sizes, what my be suitable risk reward to you, may not be suitable to me. There are nothing like UNIVERSAL low risk trades...then everybody would have taken that and the trade would immediately move away from its base making it a higher risk one.
- TA by itself is not a saviour
AV- It is just a study of crowd behavior through price actions, that shows important pointers to POSSIBLE future behavior
- Position sizing, Stop losses, Exit method are important to stay in the game than right entry
AV - WRONG, WRONG and WRONG. From experience, Entry is the most important thing. A good entry means the trade immediately moves into your favor. Thats half the battle won already. Then comes your other parts. The way you have emphasized is because lot of experts/authors emphasize like that as most traders do not think about those things. They are very important and saves your account from a faster probability of ruin, but they are not more important than entry. IF THEY WERE, systems would have generated trades randomly with just position sizing and money management and exits and in the long run, they would have won.
- Staying in the game will bring wealth in due course
Av - Nothing can be further from the truth...staying in the game and learning to play it correctly will improve you r probability of winning. NO GUARANTEE OF AUTOMATIC wealth if u just hang on.
- There is no readymade formula for making wealth. It is observance, gut feeling, attitude which requires
Av - Incomplete sentence? Anyways, it is method, mind and money management (however you interpret it), and nothing else.
- It is not technique that is required but strategy, that will win the game
Av - Did not understand this one. ANyway if u have the best strategy, but do not have the right execution, no one cansave u. BOTH are required.
Regards
Dear Loknath,
Sharing my observations
- TA is a tool to pick LOW RISK trades
Av - Technical analysis just points out to the possibility of price action in the future...you have to look for evidence, cross verify, go to the past and future...AND THEN DECIDE whether the probability of occurance AND the CHANCE of FAILURE fits within your RISK - REWARD ratio. Using different forms of money management with different account sizes, what my be suitable risk reward to you, may not be suitable to me. There are nothing like UNIVERSAL low risk trades...then everybody would have taken that and the trade would immediately move away from its base making it a higher risk one.
- TA by itself is not a saviour
AV- It is just a study of crowd behavior through price actions, that shows important pointers to POSSIBLE future behavior
- Position sizing, Stop losses, Exit method are important to stay in the game than right entry
AV - WRONG, WRONG and WRONG. From experience, Entry is the most important thing. A good entry means the trade immediately moves into your favor. Thats half the battle won already. Then comes your other parts. The way you have emphasized is because lot of experts/authors emphasize like that as most traders do not think about those things. They are very important and saves your account from a faster probability of ruin, but they are not more important than entry. IF THEY WERE, systems would have generated trades randomly with just position sizing and money management and exits and in the long run, they would have won.
- Staying in the game will bring wealth in due course
Av - Nothing can be further from the truth...staying in the game and learning to play it correctly will improve you r probability of winning. NO GUARANTEE OF AUTOMATIC wealth if u just hang on.
- There is no readymade formula for making wealth. It is observance, gut feeling, attitude which requires
Av - Incomplete sentence? Anyways, it is method, mind and money management (however you interpret it), and nothing else.
- It is not technique that is required but strategy, that will win the game
Av - Did not understand this one. ANyway if u have the best strategy, but do not have the right execution, no one cansave u. BOTH are required.
Regards