What's so great about Technical Analysis (TA), folks? We always heard people complaint and doubt about the accuracy of TA. To TA expert, this is not always true, because FA also has it's own weaknesses. And some TA experts only use TA to make money from stock market.
Today, let's look at what TA can offers us as a trader, as below:.
I don't really use to draw my price chart looks like this complicated.
1) To Catch the Right Entry and Exit Timing
TA can provides you the signal of entry and exit. Even though the signal is not always right (still depends on how you create your signal), it is a good reference to support your decision. The concept is based on the level of supply and demand.
2) Faster to Discover a Potential Stock
With TA, accumulating volume via stock scan for example, you may able to lead the rests to discover various stocks that have potential to go upside, instead of reading the company annual report one by one. You may also take one step ahead over stock analysts and investors to discover the gems!
3) Easy to Learn and Use, Save Your Time
TA saves you plenty of time, because most of the tools are ready made and available for free. You just need to tune them to fit into your trading strategy. With stock scanning subscription available in the market, it only takes you a tens of minutes a day to do your homework. Of course, the existing KLSE tools are a lot more to improve compare to Forex investment tools.
4) Ability to Detects the 'Lousy' Stock
FA traders always claimed that TA traders might bought a poor fundamental stock, if they merely based on TA. To TA investors, price chart also can tell a stock whether a stock is healthy. For example, if the stock has poor fundamental, normally there will be selling pressure. Once they notice it, they won't even look at it. Price chart analysis also enable you to obtain the pre-signal whether the market or certain stock is going for the downside.
5) Potential to Make Money in the Short-Term
TA traders have the ability to make money in a very short-term, by referring to the shorter term price chart, such as hourly and daily. You always manage to obtain a more accurate entry point, such as trend line breakout (after correction or sideway), rebound from the bottom, etc. And exit to cut loss or grab profit earlier than others when there is selling pressure detected.
Do you think this trend line breakout really works?
There are other pros to use TA for stock trading.
How about FA vs TA? In fact, both FA and TA have their own blind spots, even you use the combination of them. To me, it really doesn't matter to argue which one is better. Do you think the 90% traders have not try each of the method before? Why they are still donating money to the minority?
Like what Deng Xiao Ping said, 'it does not matter a white or a black cat, whichever can catch a mouse is a good cat'. So, just stick to whichever method works for you. else, look for a better one.
Note: The post above is just my personal opinion, I believe you would have yours too. ;)
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