Mantat said:
Oh god... A technical analyst... I hope that you really understand all the statistical
and mathematical notion behind all these average and the risk associated with it!
Since I have my Securities course certification and would be licensed to operate as an Investment Broker if I so chose (which I dont have a desire to, thank God), yes, I do understand all the statistics and mathematical notions behind averages and well as many other indicators, methods, etc. Thanks for the concern though...
Mantat said:
The first thing I learned from investment was that the current stock value was related to the perception of the buyer/sellers about the future of the company.
So people should decide to buy or sell there stock according to what they think will happen with the profit of the company.
That is a very valid point, but there are quite a few other complicated factors at play as well. But in the end, no one knows what will happen otherwise wed all be millionaires!
Mantat said:
Now enter all the technical analysts who want to predict the stock value by analysing the past value and fluctuation of the stock. So you are using the past expected value to decide of the future value (if you should buy or sell now).
So what you recommend I do, predict the price based on future values?
Seriously, all these are just tools which are not conclusive or 100% accurate 100% of the time. Theyre all just models, guides and methods which should be used as tools and nothing more. Yet, they can provide insight if used correctly. Bid-ask spreads, MACD, momentum I could go on and on. Theyre all just tools, so dont be too hard on them. For instance, during my last couple of shorts on AAPL I analyzed some very good indicators on June 28 there was what is termed as an Engulfing Line, which is a bearish indicator, indicating a potential end to the current uptrend and is considered to be a short signal. Then on July 2, there was a significant Gap Down. Gaps usually represent important areas of support or resistance. This, to me, indicated that the current level of support had been broken and a resistance level was forming. These analyses could easily have been wrong, but in the end, they werent, and I made a nice chunk of change for only a couple weeks worth of work. (On this one stock that is, but I wont get into my other gains...
)
Mantat said:
I hope you see my point: you are basing you assessement on bad analysis! I personnaly predict a good quarter (compared to others 3rd Q) for Apple and the stock will rise by the end of the week. But as a wise investor, I know that I shouldnt put money on apple because its too unpredictable to my taste.
I dont see how you can call any of this bad analysis myself. It is simply analysis. Time will tell what happens, but if can make the profits I have made with bad analysis, then Id hate to see how much could make with good analysis.
Fair enough though I appreciate your comments. But rest assured, I am fairly experienced when it comes to investing and trading.