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Social Clubs / Deranged Monkey Criticism
|Subject: Re: Poll: Technical Analysis||Date: 5/14/2013 8:04 PM|
|Author: readyteddy||Number: 17128 of 22678|
Late to this thread but I have seen technical analysis reveal things that made me stand up and take notice.
I began using TA in the 1970s in connection with the commodities markets. I remember a great potato market one year. I was in a tiny partnership with some other investors and we were long spuds in a big way. We were all taking a graduate course at George Mason relating to futures markets and the teacher was a huge point and figure chart guy. The market in spuds had more than doubled in a fairly short time and we had made a lot of money.
A major crop report was due the next day and the buzz in class the night before was all about where the market was going. The chart had put up an island reversal which is a big fat sell sign.
Long story short, the chart was right and the market was limit down for something like eight days in a row. After it was over our partnership, which had tripled it's money was down something like $40. I told the other guys "For $40, that was the most fun you can have with your clothes on!"
Good TA got you in silver at $5.21 before it went to $50.
Good TA predicted a treaty which changed the sugar markets.
Good TA tells you what the people who know already know.... sometimes.
Good TA is very good at defining bottoms and not so much at tops.
Good TA is very useful in dealing with overall market indexes; not so much with individual stocks.
Good TA is very useful in assessing markets being driven mainly by animal spirits; not very good at telling you when fundamentals are about to change.
That's been my experience. Your milage may vary.
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