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Trading on Technicals
I have always considered myself unwilling to try to time the market. I simply don't try to get things at the bottom I Invest Every Month and try to get a good average price. I am intrigued however about the idea of trying ot invest on technical analysis.
I was reading this article on trading gold in July 2009 and I have to say they present a pretty compelling case. I've read enough about techincials to know what a head and shoulders pattern is, so I found the video interesting however I find the basic argument much more interesting:
There's too much chaos right now to tread the fundamentals, so trade the technicals.
Does anyone think that notion has any merit? I haven't exactly jumped ship, but I'm a little nervous about whether we've seen a game changer in the market.
I was reading this article on trading gold in July 2009 and I have to say they present a pretty compelling case. I've read enough about techincials to know what a head and shoulders pattern is, so I found the video interesting however I find the basic argument much more interesting:
There's too much chaos right now to tread the fundamentals, so trade the technicals.
Does anyone think that notion has any merit? I haven't exactly jumped ship, but I'm a little nervous about whether we've seen a game changer in the market.
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Comment by James Scott on July 6, 2009 at 10:56pm -
I think the "technicals" have been around for a long time and yet there still is no track record of people who consistently beat the market indexes. If it worked really well, there would be a ton of people using the technical analysis products while consistently beating the market - and that just isn't happening.
Playing the market according to technical analysis sounds good. That is why the concept is being sold to people in many different packages. The problem is that there is never a guarantee of success in the market.
In a similar way, yes, some people make money on the internet by following a specific set of rules, but 90% of the people who buy the "make money online" ebooks and videos will never make money online.
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Comment by Vitaly Indinko on July 7, 2009 at 2:12pm -
I definitely don't think you can make decisions solely on technicals, however I do feel like government intervention has reshaped my ability to trade the fundamentals.
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Comment by paul on July 8, 2009 at 11:16am
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In adition to government intervention skewing the fundamentals, you never know when there will be an outbreak of war, storms, flu virus, etc... or some huge financial scandal that will completely change the reality and direction of the markets.
Although, if you are trading on the fundamentals, then you probably would have automatic sell instructions in case of a rapid and unexpected drop in stock prices.
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Comment by Vitaly Indinko on July 22, 2009 at 1:24pm
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The interesting question is: Is government policy having more impact on prices than everything else? I certainly feel like pricing is more "arbitrary" than usual.
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Comment by lea on July 23, 2009 at 8:38am -
Government will have more impact on oil prices if they slow the speculation process. There was a report that a barrel of oil is traded an average of 27 times before it reaches consumers. There also was a report about how Enron and other companies have tampered with energy markets to drive up prices. Health insurance companies are making record profits as consumers are paying 3 times what they used to pay for health coverage while also being forced to pay more out of pocket expenses and high deductibles.
Maybe a little government intervention will bring prices more in line with reality and true value.
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