Can you tell how technical analysts do their job of investing

yes i am contributing..
as told..a fund manager[aggressive trader. .himself..now only watch/manage]
3 ta trader underhim...a.....................b................ ....c
a] trades support / resistance buy...
b] break out play after..resistance zone...aggresive player..
c] a short master...mostly under..not to play..participate in future...

fund manager..normally allows ..a .to play...
as situation volatile...b..plays...a stop play ..then
fund manager watch ..b...
if wrong loss to be booked by him..

on rarer OCCATION C GETS .. go ahead ..signal...
its the time to take money...a/b must sleep then...
so 'c'....main earner ..with highest strike rate...
xxxAS TOLD TO ME...
OILMAN5

How they do it?
Hmmm ... there must be a secret... something novel ...

VOILA!!!!

They must be applying Technicals to Fundamentals!!
(while the 'public' waste time & energy over which one is right!)

Jokes apart ...

I don't think Stop losses would work for them. They have different methods of hedging Mostly through PUTS.

One more ...

For the same reason they won't be able to trade as frequently as the average trader

Their entry & exit will have to be a gradual (ideally surreptitious) process (before the 'public' get a smell, that is)

definitely kk,position management..+ risk control...is key..
they [ fund manager...] dont cough his cecret..


oilman5

It's not just about secrets. The main reason why they wouldn't want the public to know is 'cos they wouldn't like the stk to move up (or down) too much before their accumulation (or distribution) is complete.

And once the accumulation is complete, the same fund might issue a Buy Report on the same stk inducing the public to scramble for it.

Or they'd leak the news to a select group of 'inner circle' traders who would (after they have finished their buying) in turn pass it on to their 'chamchas' and so it would percolate till the smallest of traders in the smallest of towns starts buying the stocks. This would be the time when the original biggy, at the top of the chain, starts distributing.

In other words they make use of the 'public' to generate the momentum for them.

Some more ...

They'd pay much more attention to the 'risk spread' of their portfolio For this

1) They'd spread their picks across sectors
2) They'd balance the overall Beta value of their portfolio (there are ways to do this & it would probably be not an one time but a continuos process depending on mkt conditions. More high Beta stks => higher avg Beta of Portfolio => higher gains over a period but also higher risks as it could also lead to higher losses over the same period)

Also :--

3) Since the now-in-now-out kind of quick 4-5% technical trade is not possible for them they'd research the stks they buy to a much greater extent (here they have the advantage of greater access to information). For the same reason they'd always go for the more liquid stocks. if they do buy a more illiquid smaller cap stk it would be for the longer term so that there's enough time for a gradual accumulation/distribution.

4) They'd track much more Economic data (Economic indicators) than the avg trader would care to know (much less track) for they know the 'secret' of what in the end drives the mkt.

5) They'd track data (like relative valuations) on a no. of mkts and rebalance their portfolios accordingly from time to time. Even for the same mkt they will from time to time do a sectoral churning based more or less on the same parameters.

6) They'd pay a lot more attention to the patterns that develop on the charts as this would give them a fair idea of what the other big players are up to (after all a distribution pattern cannot be created by selling of small traders alone many of whom would follow 'big brothers' anyway!)

yes kk.
u r 100%...correct..
urfortunately...money & resource of info.+time..
ALL AGAINST US[small invidual trader]

alternative.. to fight in their side..
giant footprint concept heplful..





if interested check site..www.ino.com
OILMAN5

Hi Guys,

WARNING: I’m putting up a rather long post (which seems to be quite often the case with me lately)

I'm a day trader, more into Nifty Index futures. I don’t do it for a living as of now.

2 years back I started off being more of a speculator, taking tips, subscribing to newsletter. Slowly I graduated to studying charts. Trying to find the Holy Grail. I learnt that basically Technical Analyst can be broadly categorized into following
1) Pattern based trading 2) Indicators Based trading 3) Trading on Breakout's 4) Trading on corrections/extension 5) Based on Trends. 6) Momentum trading.

Of course this was a broader picture with each point meriting a discussion on its own. Each has more sub category within itself.

I started screening for candidates. I never found anything that worked consistently. For whatever reasons I never did make any money with my new wisdom. I stopped laughing at Fundamentalist's. I question myself on how the old timer used to do it without having any aids of sophisticated tools that we have at our disposal today.

Somewhere down the road I found some great books which changed the way I thought about market and technical analysis. A few influenced me, a few gave me good perspective and few bought a touch of gold with them.

I realized that market is not an entity. Its people. People who react. People who can be irrational. People who can be influenced. People who all act with different reasons and time frames.

I realized that I can’t catch all the action. I can’t catch all the opportunities. Don’t loose your hearts on this one.

I realized that it’s not about finding the RIGHT stock. It’s about my temperament. It’s not about having minimum risk. It’s about managing my risks. It’s about managing my money. Cut my looses. Accept loss as part of the game. Stay sideways if I have to. I need not be in action all the time. But I have to act without hesitation and with conviction when there was an opportunity.

I realized that CNBC is to be used for entertainment purpose only. That’s what they are in business for. The NEWS they carry will be seen by scores of people and acted upon. The professional know this (And yes they love it).

I realized that I can exit at the top some of the time. I can buy at the bottom some of the time. But I can’t do this ALL the time. Don’t loose your sleep over this. Go with the price action.

I realized that at the end of day it is price that matters. Nothing else. Indicators can be wrong. I can be wrong most of time. Guru's can be wrong. Price is the truth. And which matters at the end of day.

Just wanted to share my thoughts.

Regards,
Stumper.

Read !!! & Practice !!! you will understand by yourself.