I have heard people lament how difficult it was to perform technical analysis and how they can skills. There were also many critics or fundamental believers that the stock market can never be timed and that we market technicians are wasting our time trying to beat the market using technical analysis. thought to be a study of past price behaviors and critics were saying the past doesn't happen in the future. They are both right and wrong. They are right because technical analysis a crystal ball where it is 100% accurate. They are wrong because technical analysis reflects the on the charts. Do human change over the centuries? As far as emotions are concerned, fear human nature that will never change! Humans will still do insider trading even if it is to greed. We saw how corporate governance though tightened over the decades was not fool proof criminals. Humans will still fear losing paper profits and they will still fear declining stock prices leading to declining capital. All these emotions can be found on the charts as they happen. Ask yourself, how many times have you seen a stock price run up before news is released? Anticipation of shareholders? Well, how about insider leaking the news? Think about it.
Every night I study in details charts and all these relentless efforts that I became very familiar with technical analysis. If a lawyer wants to win a case, he will study the case carefully and also refer to past cases. We all know big money, but it is really this hard work of preparation that justifies their huge pay. As a trader, we cannot slack too. Hard work and efforts must be put in to learn technical analysis. of studying these charts will enable us to be very proficient in chart reading and recognize sell signal in a flash as the experience build up. There is no shortcut to success as far as I'm concerned.
I started trading as a loser and often times am only interested to know which the next stock to buy is. This is not why legends made their fortune in market. Every single book that I read, advocate us to study past charts and get familiar the chart patterns or price/volume relationship. Hence why shouldn't we follow? After all, they are the ones who have done it and been there.
Remember, human nature never changed and this is the fundamental reason why work.
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