Why do Most Market Traders and Speculators always fall into the Technical Charting Trap !?
To be kind to Technical Chartists,it’s probably for the same reason we fundamentalists may fall into a Value Trap even when Investing !
Because we believe !
Yet I’m pained and at a loss to see the game of feeding on each other continues to flourish for decades between Brokers & Technical Chartists & Market Media,especially Stock Channels !….and all seriously with a poker face that serves to portray some wisdom and credibility which is really lacking….sadly they believe in what they’re doing and new suckers are born every minute or old ones have short memories…the whole approach is horrendously incorrect as it seduces those who come looking for quick monies in Equities! ………inevitably and it’s always a foregone conclusion that the victim is always the Broker’s Clients who act out zillions of intraday and few days ideas largely fed by Technical Chartists
In Bullish Market one does not needs Skills to make Money…everyone is making Money…An Advisor is tested in Bad & Bearish markets
Yesterday the Sensex corrected by nearly 500 points & nearly 2% in the day on a meltdown in Chinese Stocks earlier yesterday morning
Stop Loss was triggered across the Trading Platform .
Surely most of the technical chartists must be avoiding client calls ! as till day before they were crooning on stock channels to stay and buy long and looking forward to Sensex & Nifty rising on the basis of Market shrugging off, in their view, the Greece problem after the ‘No’ referendum came in for agreeing to strict IMF Measures for more Loans…they yet come on the Channels justifying yesterday and Stop Loss being triggered !
This throws up a major Risk,even with Stop Loss in place, in Speculating using the Technical Analysis Approach….Yes,even on a Fundamental Basis stocks may drop,but at least Investors don’t risk losing all principal !
The way I see “Stop Loss” in the Technical Approach is ” Stop or Loss !”
As a Fundamental Guy, Contrarion at times,expect me to hold such a view on the Technical Analysis Approach.I have always held it
Can only warn those Investing Monies in Equities to know the full risks of Operating & Investment Approaches before indulging in them
For me it’s always been Fundamental as it should be for all
1 thought on “Falling into the Technical Charting Trap in Stock Markets ! Stop Loss or Stop or Loss!”
the technical analyst extrapolates each move and therefore sells each time the market sells off by believing that the selloff will continue till the stock price becomes zero. I, as a fundamental investor, start drooling when the market sells off and can not wait to buy more stock since I have already established a fundamental value of the stock that is higher than the market price. It is no wonder then almost all technical analysts travel by local train to their place of work or work from home.