Well I would like to point out something here..which i feel is very important while trading solely on basis of technical analysis....
1. Same techniques are not applicable everywhere and same technique will not give you same results everywhere
2. No technical analysis is 100% correct..actually TA is interpretation of Charts of price movements....Now there are chances that different people will intrepret same chart in different manner....Also more accuracy comes with more experience and practice
3. Most Important while trading using technical analysis putting STOPLOSS is mandatory...u shudnt trade without a stoploss
4. Out of the different techniques..no single technique is gud enuf for prediction..Using multiple techniques always give better result
5. TA dosnet works well when market behave very unxpectedly ...as was the case during the recent subprime crisis...
6. And ya..TA always looks great in hindsight :-)
So folks always keep these points in mind..i have gather these points thru my experience, several books and after taliking to experts....
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hey nikhil
ReplyDeletenice to have u in blogosphere !! well i wud say technicals woul djust give u support points .. trading purely on technicals is never advisable.. markets in general are efficient enough to withdraw technicals .. but it does provide patterns for strong supports and resistance ..
I never base my decision purely on chart reading .. but i m not an expert in the subject either :-)
I agree one should never trade solely on basis of TA...but in case u r trading...put stoploss...
ReplyDeleteFrom my experince i must say TA works xcellent when market moves well...TA is very good from reconizing trend in amrkets..and in current market its working wonderfully :-)