OldGuy --- Thanks for your insight into TA. A 65 y/o vet, cool. I only have 25 years under my belt. I still recall the early days when my broker would give me last weeks chart book as a new one arrived and I would pencil in the bar charts. Needless to say calc moving avg or stochastic took far to much time so I really focused on volume and S/R levels along with chart patterns.
You mention the greatest strength of TA, having a PLAN. Something almost none of the so called FA people have, its buy, hold, and prey for them. You mention FA is basically getting on the road and just driving. I have said for a long time regards EW that it provides a road map, and as long as trading follows the map great, as soon as it takes a turn well time to adjust the road map. You mention vector trading something I am not versed at. With the exception of EW I try to keep it simple, you know trading S/R, trends (channels), and chart patterns using MACD and stochastics as trading aids. I discovered candles many years back and perfer that to bar.
What few non TA people understand is what is behind most TA and reading charts. The most important is I see charts as a reflection of overall investor psych toward something. It shows the MASS emotional status not MY emotional status toward something. So using it with proper money mangement is a persons best tool to remove thier worst enemy from investing EMOTIONAL attachment, be it fear, greed, hope, whatever. With TA and proper money mangement one has a PLAN and now can use LOGIC for making decessions.
The other thing the novice miss is TA under best conditions is I figure about 80%, and most are only 60% (there are setups with very high success rates) and the skill comes in by SELECTING high success setups.
Another thing they make fun of that any good TA trader accepts as fact MOST charts I look at, MOST charts I have no interest in as they give a 50/50 read, and the novice then chant see its like flipping a coin, and they are 100% correct, for that chart at that time its 50/50 and therefor no trade. What they miss is what better screening tool could one ask for.
Then the real scared hard core novice lurk around and attack as soon as a trade goes wrong, how soon they forget one is targetting 60% success rate and have learned to be good they must master 2 things, learning to accept being wrong (it happens a lot) and learning to cut loses FAST. By the way thats the exact two things that are impossiable for the Bag Holder to master, hence the huge high rate of loses for them.
I expect you have differant setups that you use, as do I. For FEEC I am only discovered the stock 3 weeks ago and had I been tracking my 1st entry would have been on the break of the neckline of the inverted H@S likely about .15 as the 21EMA was acting well turning up. Likely would not have sold the on break above .20 as it was clearly a 3rd wave thrust. The 4th wave pullback held nicely on the 21EMA and when the 5th leg up ending the 1st thrust wave occured the 21EMA cut up thru the 55EMA giving a longer term uptrend confirm. I likely would not have sold .29 as I would be waiting for .40 as I would be longer term bullies. So all I mised on this one was a great intial entry at .15
I did accumilate during the base avg price of .19
I call this setup my sleeper setup. I look for a stock no one wants, or no one has discovered yet and when it gives signs, first signs on a long term trend change I enter for the long term intending to swing trade part shares with the trend.
A decending triangle has formed so we may very well drop back to .20 or .18 but then again maybe not. With the spread so wide (hence your valid warning to trade VOLUME stocks) its not worth it playing a possiable pullback. I will likely sell some .40 looking to buy back on a pullback.
I like these types of setups as they are low maintance high reward with low risk. The other advange is I become familiar with the chart to events and can gauge how well it tracks the TA road map. When I find one I can trade for a couple years that tracks TA well, it is a gold mine.
FEEC has high potional right now to fit the map. And the best part is if it does not my loses will be very low if a loss at all. IE if it dies right now and this is all it has.
So anyways thanks for you post.
If you have not studied and made big profits using TA you might consider being wise and forgo your critical judgment of it.
