Is Technical Analysis a farce

[anuragmunjal]

I have been trading the market for the past 15 yrs. I have personally spent a lot of time & money in learning TA. The only rich analyists I have come across are the ones who are selling software, charting services, trading systems, tips etc. but am yet to meet a technician who has made serious money trading the markets. Even if there are a few succesful persons out of the thousands or maybe lakhs of people who are using TA, it can also be attributed to their pesonal flair for trading or plain luck. At times one gets the feeling that TA is a big farce. It is a big industry of software sellers, bookwriters & sellers, trading system sellers, tipsellers who have been feeding off us (the small investor or trader).

I would like to invite views on this subject .

 

[bunny]

I sympathize with you, you seem to have borne quite a good loss on it as it seems.

Anyways, me too using TA and making good money(and I am neither a book writer/publisher/tip provider/public analyst/software seller/etc). I trade only mine and my mother's account. BTW, I don't even have a actual TA software. All my software has is few common indicators(which I never use, I don't even use the basic indicators like EMA,SMA, BB,RSI,stochs, etc,). My use is only for drawing the candlestick charts.

Perhaps I and others can help you if you post your strategy and correct if anything goes wrong.

 

[bunny]

And yea, these days, I don't use those chart patterns like triangles. wedges, channels, etc.

 

[anuragmunjal]

Thnx for the reply. In any case I was expecting a lot of opposition .
As far as the question of earning money goes, I have myself been a scalper
and did decently for myself. As a matter of fact at one point my personal turnover averaged between 100-200 cr a day trading gold when commodities were introduced by Mcx.
My question still remains that why do these so called technical gurus sell their recommandations & not trade their own account.

 

[bunny]

Are you sure you were not putting up the prices against yourself with that turnover, especially when you are scalping?

BTW, what was your annual rate of return(during various periods during the consolidation, bull run, crash, bear run, etc.), just curious since you have mentioned a very large turnover.

 

[learn2trade_ar]

My question still remains that why do these so called technical gurus sell their recommandations & not trade their own account.

And this definitely is a million dollar question. These technical gurus actually add to demotivation because you start feeling that if these gurus (who ideally have mastered technical analysis because then only they can so comfortably keep on recommending to others) have to come on TV daily morning to sell their ideas/tips for some money, then it definitely raises this question in mind that why don;t they comfortably sit at home/office and trade based on their analysis instead of coming on TV.

Whenever I get a chance to attend any of their seminars like the one organized by a prominent channel repeatedly in different cities where gurus like Sukhani, Ashwini Gujral etc. are called, I'm definitely going to raise this question to all those gurus sitting there thay guys if you know trading so well, then why is this need to tie up with TV channels to earn small money.

Also, I would like to ask our traderji members, if anyone ever got a chance to raise similar question to any of these gurus anytime, please share with all of us. I would eagrly like to know their response.

 

[learn2trade_ar]

And yea, these days, I don't use those chart patterns like triangles. wedges, channels, etc.

Hi Bunny,

If you don't mind, can you please share your mail id. Would like to learn from you more about candlestick charting. I'm also following candlestick to arrive at my trading decisions but nowhere close to your detailed study abt candlesticks.

Also, would like to discuss my trade entries before taking them with you for your opinion as well. Hope you won;t mind helping out a newbie.

Cheers

 

[anuragmunjal]

I belive that learn 2 trade has a very valid point.
As far as the previous question goes, that was a very good time for gold trading as the exchange charges were very minimal and arbitage facility was also available with cbot, cme especially in crude oil which used to settle every month with the international prices. also take note that gold used to
trade around 7-8k in India at that time which means if u buy n sell just 5 lots, it is a turnover of nearly a crore and there was a lot of volatility in those times

 

[bunny]

Its a big mistake to believe any public analyst. Many of them are just "tools" of the operator. The operators wants to accumulate the stock, so they pip the analyst to advice the public to sell the stock. Price can be manipulated in many ways, but the best part is we can always see every step the smart money walks. With good success, we can tell whether the smart money is bullish or bearish!

 

[bunny]

And yea, it isn't that technical gurus don't trade their accounts. Its just that they have somebody else to trade for them. Their trading capital is large and they have trading departments.

Trading of a guru is much more different than that of small block traders like us.