I have come across a lot of critics of Technical Analysis. These critics always have similar statements to make - "The markets cannot be predicted", "Markets make the Charts, the Charts do not make the market", and so on. I agree with all such critics of Technical Analysis and Chartists. These people have become critics of technical analysis because they did not understand the purpose of technical analysis. They thought that Charts and TA was something, which could show them the Future. It would help them to make money. Well, it is not that easy. To make money from the markets, you need Sound Money management. If you do not have that, you would still not be able to make money. To quote - "Even if you give tomorrow's Newspaper Today to some people, they would still make Losses in the market".
If Sound Money management is the key, then why do we need Technical Analysis? The answer is, to see the "PRESENT". Yes. TA does not predict the future, but it shows you the present. With the help of Charts, Levels and Systems, a trader is able to see the Market As It Is, and not as he wants it to be. This is very important. TA helps to keep the emotions of a trader away from his trading. No matter how Bearish he may be, if the screen tells him to Buy, a Smart Trader will either Buy or Stay Out till more clarity emerges. He will not go against his charts. That, my friends, is the whole essence of TA. use it as a tool for making your Buy and Sell decisions, and you will be highly rewarded. if you use it as the Holy grail or as a Fortune Telling Crystal Ball, you re bound to be disappointed.
If Sound Money management is the key, then why do we need Technical Analysis? The answer is, to see the "PRESENT". Yes. TA does not predict the future, but it shows you the present. With the help of Charts, Levels and Systems, a trader is able to see the Market As It Is, and not as he wants it to be. This is very important. TA helps to keep the emotions of a trader away from his trading. No matter how Bearish he may be, if the screen tells him to Buy, a Smart Trader will either Buy or Stay Out till more clarity emerges. He will not go against his charts. That, my friends, is the whole essence of TA. use it as a tool for making your Buy and Sell decisions, and you will be highly rewarded. if you use it as the Holy grail or as a Fortune Telling Crystal Ball, you re bound to be disappointed.
