Chartists

[Titan]

Interested in hearing from the TA's. Want to know if there are many trading the NZ market.

[Gryffyn]

Scan the threads dude and you'll see a number of posters who use TA.

[Titan]

Ive seen none so far who are true TA. More Fundamentals.

[Gryffyn]

Open eyes before looking - check the threads and replies by Phaedrus. You'll see a few other TA punters discoursing with him there as well.

[Futurz]

quote:Originally posted by Titan

Ive seen none so far who are true TA. More Fundamentals.




Phaedrus is your man for this...

see the BRG chart thread below this one

[duncan macgregor]

Titan, Pheadrus is one of the more knowledgeable posters on TA. However taking nothing away from Pheadrus, the only pure TA Investor The one that stated fundamentals have no part In his strategy Is woody. WOODY can be found on last years posts on sharechat, mainly deals In gold silver etc . I think other than woody, everyone else sneaks a bit of FA Into the mix. PHEADRUS without doubt Is king of the charts, but holds shares long term for dividends. WOODY on the other hand only buys and sells In pure TA fashion, and Is the only pure TA Investor I have encountered. Perhaps my perception Is wrong, but almost all TA traders Including myself sneak In a bit of both with the exception of WOODY. Perhaps I am wrong and other TA traders will enlighten me, but my thoughts on TA was buying and selling over a short period, and Fa traders were mainly long term holders. cheers macdunk

[Halebop]

quote:Originally posted by duncan macgregor

Titan, Pheadrus is one of the more knowledgeable posters on TA. However taking nothing away from Pheadrus, the only pure TA Investor The one that stated fundamentals have no part In his strategy Is woody. WOODY can be found on last years posts on sharechat, mainly deals In gold silver etc . I think other than woody, everyone else sneaks a bit of FA Into the mix. PHEADRUS without doubt Is king of the charts, but holds shares long term for dividends. WOODY on the other hand only buys and sells In pure TA fashion, and Is the only pure TA Investor I have encountered. Perhaps my perception Is wrong, but almost all TA traders Including myself sneak In a bit of both with the exception of WOODY. Perhaps I am wrong and other TA traders will enlighten me, but my thoughts on TA was buying and selling over a short period, and Fa traders were mainly long term holders. cheers macdunk


Duncan I think you are confusing the goals of the investor with the methods they utilise to achieve them. An investor's timeline can be very short or very long and they can be more interested in income or capital growth and any permutation between these four factors. Regardless the goals, FA or TA and their various hybrids can be used to reach them.

So in your example above, Phaedrus, as a TA, would be remiss for not utilising his charts in determining trends. Using this apprach he enjoys an reasonable income return, minimizes capital loss (some of our long term investors should take note) and hopefully a degree of capital gain to boot.

As a mostly FA myself, I also trade for short term but initially on the basis of fundamentals - I might consult charts after I determine a bargain but I often ignore the results anyway. Many of my best short term investments of last year gave no great TA indicaters at the time I purchased (TRH in NZ and ALL, AMM in OZ) and probably screamed the opposite.

I'd add also, even if someone uses a lot of FA, their TA insight is in no way diminished as a result.

[Othello]

Hi Titan i use just T/A since to say the my F/A is basic is an insult to the word basic.
One day tho i will learn F/A and combine the 2.
Othello

[kittydashwood]

Exclusively TA and gut but only with a range of selected stocks and sectors that fit the macro picture. If the trend is broken the stock is dumped but remains on the watchlist.

Two Years Watchlist Average of 20 stocks 36%PA.
Prefer candles, 10/90 MVA.
120 MVA as stop loss.

My only losers were bottom picking before a true BUY indicator emerged.
TWR (Twice!) A good leason in buying into a business you don't understand.

Thinking about NLX (ASX) and SKX(NZX) at the moment.

Holding FPA, PPP, HQP, PGG
Ouija board used for fundamentals.

[Longtack]

kittydashwood Posted - 24/07/2004 : 11:35:16 AM

Holding FPA, PPP, HQP, PGG

How about that Kitty. I'm holding NOG HQP & PGG.

[kittydashwood]

yeah FPA is pretty pricey but that Whirlpool deal sealed it for me. It's only 10% of my portfolio.

[stormrose]

Musings...

I've been backtesting trading formulae over the NZX15 using two years of data. The winning trading formulae use volume more often than closing price.

This pattern has shown up over repeated back-testing runs so probably don't represent a skew in the random equation generator used to seed the starting equation genomes. (Yes - I'm using a Genetic Search).
The means that either:
1) Volume really is more important
2) The GA "prefers" volume - (not likely I checked the code)
3) I've let the GA over-fit the test data.

Any comments from chartists?

[Risk]

I wouldn't go as far as saying volume is more important than price, but I agree that its role is very important.

volume shows you the strength of a price move, but it does not cause it....the two go hand in hand.

my best trades have been to jump on a share which is increasing in price on increasing volume....buyers love momentum.

[Major von Tempsky]

I was reading a series of articles in The Press by Roger Armstrong, a director of Salvus and a succesful sharebroker of 15 years standing and I came upon this quote, which I thought was too good to ignore...

"Using charts to try to make money by looking for mysterious patterns may work for the occasional artist but generally this avenue of investing leads to failure. A simple observation is that such charting packages tell you to buy when the share price has already risen substantially and to sell when the share price has already fallen somewhat shows one substantial weakness of this approach. Looking at a short term chart can be useful in trying to pick an appropriate level to buy and sell shares relative to recent trading. Otherwise the best use of charts is probably as decoration on toilet walls."
Roger Armstrong, The Press, 14 July 2004, page C6.
Naturally I would argue even with that on two counts
(a) if you are in a hurry you look at the years highs and lows columns and at the latest price and decide on fundamental values or if you are not in a hurry and have a reasonable calculator then you feed in the numbers and get some real data like average price, standard deviation, median, mode, last price and decide on that. Momentum investment is for simple minded people and leads to huge unanticipated mistakes so one doesn't look for the trend, one looks for funadamental value and satisfying teh Buffett requirements. (Buffett doesn't use charts :-), neither do the banks for dealing with foreign exchange rates).
I guess another interesting statistic is that except where a charting strand is used as a proxy heading for general discussion on a share, the chart threads have pretty low readership - in the hundreds rather than teh thousands.
Nuff said, eh ;)

[Major von Tempsky]

Oh, the other grounds for disagreeing, for those of you who were wondering, is (b) that my toilet walls are already in use for calendars of beach scenes from Nouvelle Caledonie.
But if I do get short of toilet paper I'll print off a few charts....

[Gryffyn]

Well MVT, that's a hand-grenade lobbed into the debate if ever I saw one.

Ducking for cover...

[Capitalist]

"Using charts to try to make money by looking for mysterious patterns may work for the occasional artist but generally this avenue of investing leads to failure. A simple observation is that such charting packages tell you to buy when the share price has already risen substantially and to sell when the share price has already fallen somewhat shows one substantial weakness of this approach. Looking at a short term chart can be useful in trying to pick an appropriate level to buy and sell shares relative to recent trading. Otherwise the best use of charts is probably as decoration on toilet walls."
Roger Armstrong,

Fair comment, but the market, or chartists, have a collective memory with the muscle to influence trend at times.

Yes, Virginia, if technical analysts think the market is set to rise or fall, that collective perception, warranted or not, can and does move the market.

PS Major I think it's one of those irrational things, like gold. But there is a lot of comic mileage in both these things....[:p]

[duncan macgregor]

The debate continues chartists against fundamentalists. Lets take the two very best players and pick faults with their system.
SNOOPY against PHEADRUS. Nobody Is more qualified In their field than those two and nobody contributed more to my education of the market In the past. Snoopy will take a company apart, bit by bit,better than I ever could or ever will. He will do the numbers until he Is satisfied that It Is a good safe buy,then buy In. Thats the good bit, so where do I think he goes wrong. He forgets that we all make mistakes, times change, people tell lies,stretch the truth, what you think Is right turns to custard regardless of your fundamentals. He sticks to his guns regardless, and goes down with the ship, lesson he taught me [get an exit strategy]. PHEADRUS chartist supreme, nobody can equal PHEADRUS and his charts. I used to think charts were a load of old rubbish, crossed swords with PHEADRUS on sharechat, but find thanks to him use them more and more.
I quized him endlessly to find out what companies he had Invested In at a given date. The reason for that was to find out useing charts why how and where to further my education. When he did let us know I was dissappointed . He told us by memory 12 companies some of which he Invested In for dividends. It takes a long time to realise that you can beat the teacher, and old macdunk thinks he can. I had the best and most knowledgeable teachers of finance, and trading. Anyone wishing to start trading SNOOPY and PHEADRUS are the very best. Thanks guys for teaching me Im going to whip your ass
cheers macdunk
PS SNOOPY AND PHEADRUS are great teachers thanks guys

[Bob Marley]

MacDunk mon. What wacky backy are you using mon?

Bob Marley maybe the same electric Puha you use.

[duncan macgregor]

Bob mon get off the grass yuv gotta be whacky to be on the backy. Never touch the stuff silly enough without it. How comes I thought yous was dead. MACDUNK

[kittydashwood]

Candles never lie, MVT, but accountants do.

[glennj]

MvT I liked the Roger Armstrong quote. He's one of our best columnists. Yesterday he gave this site a mention along with a warning about rampers.

Some people may make a good living trading using charts as their only decision making tool but
I've never met one yet. From what I've observed
most chartists fail and it is the people selling the software, books, courses etc who make the money.

I'm not anti TA but use bits as an adjunct to FA only.

A well known quote re charting from Ben Graham goes something like this, "it is as fallicious as it is popular"

Chartists are beneficial to my investment style eg. they are often still buying when I start selling (selling because of my perceptions of over valuation)

It is the FA adherents that start any trend changes.

[miner]

"Yesterday he gave this site a mention along with a warning about rampers."

glennj could you post what he said?,as for charting would it be fair to say that it works as lots of people playing the market use them,as in if only one person used charts would charting work ??.

Cheers
Miner

[blackcap]

Quote from an academic (professor of finance), the other day

"Emperical studies have proven that one cannot make supernormal profits, (ie by beating the market) by using charting techniques to provide buy and sell signals.... yes chartists do make money on some years but if they are not making more than the index, then there is no point"

No qouted word for word, but im sure you get the gist.

[stormrose]

But quantify "some years"... markets tend to move upwards over time, but in a cyclic fashion. The basic cycle is advance, stall, decline, and repeat cycle. It's easiest to make money during the advance, then sit out the next three phases.
(Yes, I am almost oversimplifying things.)

However there are opportunities for shorting during the decline phase, and true trading opportunities during the stall phases for the brave.

Yes a trader is likely to enter late and exit late. Meaning the trader does miss out on the full benefit of the advance phase, but the trader is sitting out the decline phase (or shorting it). The traders money is not idling during the stall/sideways phases because it can be productively employed trading elsewhere. The trick is picking the phase making sure their exit strategy gets them out.

The buy and holder gets the full benefit of the advance, watches their money doing nothing during stalls/sideways markets and bears the full shock of decline phases.

I agree with Cap here - trading is a self-fulfilling prophesy... it get's truer and truer the more people that believe in it.

The key making trading work (so I've heard and my limited experience bears to be true) is portfolio risk management and discipline. In a nutshell, sell losers early, let winners run, watch position sizes, manage capital at risk.
My simulations so far indicate that one can then randomly pick any uptrending stock and still have really good odds of making profits.

Buffet said (paraphrased) that if the EMT folks were right then why is he so successful?
So if the trader-knockers are so right then why are their still successful traders? Surely not more tripple sigmas right..

[dingdong]

quote:Originally posted by glennj

From what I've observed
most chartists fail and it is the people selling the software, books, courses etc who make the money.


And I am unworthy of those investment book authors that advocate only FA principles that are current or ex stock analysts that make megabucks in salary and bonuses per year in attempting to apply FA to value a stock (and getting it wrong many, many times).

The only way to consistently make money using FA is to become an overpaid stock analyst.

[kittydashwood]

Excellent observation unworthy one.

[duncan macgregor]

There Is no only way FA, or TA. Both have downsides, but If used to compliment each other, systems can be derived to get the best of both worlds. The glaring fault with TA, Is getting caught up In a salted mine gold rush without realising thats all It Is. FA only people are convinced they get It right fall In love, and lose heaps still bleating on about how they are right. I am Inclined to buy with FA and sell with TA. Anyone In my opinion that Is exclusive to one or the other Is an easy beat both Ingredients are required.
MACDUNK

[Longtack]

I know of several investors who use charting and also beat the indices by miles. This TA/FA debate s/be dead I wldve thought but I'd welcome a challenge to identify great stocks using FA versus those based on TA.[8D]

[Longtack]

Roger Armstrong's article is loaded with emotive put-downs of charting and he tries to align it with snake-oil and tea-leaf reading. Hardly what I wld call objective journalism and quite typical of the increasingly rag-like & subjective ChCh Press.
Maybe he's a successful broker because he "churns" (and earns lots of brokerage) and knows SFA about successful businesses and investing. Well Roger?

[glennj]

Miner I've not kept the paper with Roger's other
article but it was in the Dom Post earlier this week.

Abdab I've investigated both FA & TA & I can tell you it is a hell of a lot less expensive and more successful (for me anyway) going the FA way. I know a number of people, myself included, who have never been on a mega salary that have done very well from an FA investment style.

Longtack, re a challenge there is already a stock pick comp on this site. This is the 3rd year that I've entered picks that are value based. Don't know if any of the other posters picked theirs solely on TA or not. Would be interested to find out. Looking back for the last two years my results are pretty good. Top ten both years.(represented substantial real positions & were not just theoretical picks with nothing to lose)

Have made picks public in the past when I produced a small tip sheet/newsletter. Easily beat the brokers etc back then so I've nothing to prove. It's already been done. Having read widely re varying investment styles & put the time in trialing various ideas the conclusion was value/contrarian investing is what works best for me. Mind you it took me thirteen years and a few disasters before I came to that conclusion.
What works for me may not suit different personality types. Enough from me!
Anyway each to their own etc

[brother coy]

a sucker ya silly little contests ya runa on dis site mean shat in the real world goods for a laufgh thats abouts it hahhaha all do is makes people haves a punt bes diffrent if its real money hahha

[stormrose]

Da Bro be back! WoOt!

Don't be usin' the sharepicking comp on this site to compare TAs to FAs. Why? Well because it's a buy n' 'old comp. Trading is about exit strategy.

[Major von Tempsky]

It's obvious from Longtack's statements that he hasn't read any of Roger Armstrong's four articles so how can he comment on them?
For a start RA's shortish quote on charting (2 or 3 sentences) appears in only one of his 4 articles and is only a very small part of that article (how does that equate to "he's loaded with emotional whatever (I forget the term used) against charting?"
In another of his articles he comes out against churning as a major bullet point and some discussion - how does that equate to favouring churning?.
I think its frankly embarassing when people rush into print with a whole lot of knee jerk reactions without even bothering to do the easy basic research first, and make fools of themselves as a result.

I read the last of Roger Armstrong's articles (which didn't contain anything about charting), thought this is rather observant, well thought out, saw that it said the last of 4 articles on investment so I looked up and read the other 3 in the newspaper reading room of the Chch Public Library. It didn't take that long or much effort. Longtack should do the same in his own local Public Library.

[Capitalist]

quote:Originally posted by Major von Tempsky

I was reading a series of articles in The Press by Roger Armstrong, a director of Salvus and a succesful sharebroker of 15 years standing and I came upon this quote, which I thought was too good to ignore...

"Using charts to try to make money by looking for mysterious patterns may work for the occasional artist but generally this avenue of investing leads to failure. A simple observation is that such charting packages tell you to buy when the share price has already risen substantially and to sell when the share price has already fallen somewhat shows one substantial weakness of this approach. Looking at a short term chart can be useful in trying to pick an appropriate level to buy and sell shares relative to recent trading. Otherwise the best use of charts is probably as decoration on toilet walls."
Roger Armstrong, The Press, 14 July 2004, page C6.


This will make you laugh then. This flatulent missive was from Robert Prechter's site www.elliotwave.com, an "intellectual" dissertation to back up his Apocalyptic predictions (he has been this way for the last 2 years, and been way wrong for just as long).

The babblings from this cranial vacuum are considered the Word of God by some chartists. I believe that negative views on the marketplace are like drugs - they should be taken only sparingly, and by the strong.

Oceanographers calculate that the chance of a wave of 30 meters height (your typical tsunami) rising out of a calm sea, without an obvious origin such as an earthquake, landslide, or extraordinarily violent weather, is 1 in 10,000 years.

Yet such unexpected waves have long been the stuff of sailor's legends. A recent BBC (British Broadcasting Corporation) item reported that in the last twenty years, over 200 super-carriers - cargo ships over 200 meters long - have been lost at sea. That's ten a year. "Eyewitness reports," said the BBC, "suggest many were sunk by high and violent walls of water that rose up out of calm seas."

The European Space Agency (ESA) used two earth-scanning satellites to record 30,000 pictures of the ocean's surface over a three-week period. In those three weeks, the ESA detected ten massive waves, some nearly 30 m (100 ft) high. That's a rate of approximately one wave every two days, or over 170 per year - far more than one every 10,000 years!

It all goes to show that many more "unusual" things occur than we generally accept, and that statistics (1 in 10,000 years) are not the most reliable touchstone to reality. However, there are two flaws in this story: nowhere does it say that the ten waves detected by the ESA came from a calm sea. Perhaps all of them occurred in storms. Another flaw: if an under-ocean earthquake caused a tsunami, sailors on a ship could easily be unaware of anything until they saw the wave bearing down on them. This little sea story shows how we can be convinced, persuaded (or amazed) by the subtle massaging of the facts. And it leaves us still unknowing: do sudden, unexpected walls of water arise irrationally, or without cause from calm seas, or not?

[Major von Tempsky]

Well obviously any physicist, indeed scientist, can tell you that large waves just do not rise up out of a calm sea without a cause....unless you're a chartist I suppose. There are all sorts of causes such as underwater earthquakes, underwater landslides and such things as waves from two different storms meet up, synchronise (how bout vectors from high school/varsity maths) and hey presto you suddenly have waves double the size even though there's no wind. Or undersea currents - there's some huge, permanent long distance ones in the Atlantic for example.
Ah, I finally get what Kitty D is referring to "candles never lie, accountants do". Candles are those silly little chartist things invented in Japan. Dunno about accountants, I'm an economist, at least we can produce rational arguments for and against ;)
One thing does strike me....I'm not aware of any Varsity course in NZ, accounting/economics, whatever which teaches chartist theory as it's major subject....
I guess there's a reason for that ;) ....but it does make you think, eh...
Now graphing, there's heaps of graphing in maths, but there's always something tangible measured on each axis, and a real live function creating the graph line(s), and once you have the function algebraically identified, then it's valid to project it, ceteris paribus, and you can get some really jazzy results, partcularly 3rd order and above functions, which on a chart apparently bear no resemblance to the line that's gone before, but it's all the result of the same function.
Econometrics is trying to apply this to the economy but it's like using a bunch of supercomputers on meteorology, the results are still fairly unreliable and rapidly changing. I recall when I did econometrics stage 3 the fad was passing and econometrists had just realised that econometric projections further out than 6 months ahead could be guaranteed to fail.
But, chartists leap in where wise men fear to tread. And despite getting it wrong most of the time and accidentally right occasionally, they never learn anything from the experience....
At least with monkeys when you offer them some peanuts and then throw a bucket of cold water over them when they make to take them, they stop the attempt after two or three goes....

[bull....]

How do you explain the persistance of trends if prices are independant meaning that what happened yesterday or last week or even last month has no bearing on what may happen today or tomorrow.?
How do you explain the real track records of many trend following systems.?
How would a buy and hold strategy work in a volitile market.
How do you know the difference between Bull and Bear markets if prices are unpredictable and dont trend.
How would a Bear market exist oops that might imply a trend.

[thereslifeafter87]

Bull..

Easily.

Herd behaviour. People love to follow the crowd.

Also, trading is a self-fulfilling prophecy. If someone sells a stock - maybe for a reason as simple as realising cash to buy a new car, it may trigger a stop-loss, which drives the price down further, triggering more stop losses, and so on. Then some weak-minded FA's get scared out of the stock (I'm assuming the fundamentals are still sound), driving the price down more. This is your typical downtrend.

The smart value investors then jump in, the price forms a bottom, traders start to join, the price forms an uptrend, more traders join, the uptrend increases, and the cycle starts all over again.

same thing with Bull and Bear markets, just on a larger scale.

I would say that people could definitely make money by following trends, so long as they adhere rigidly to a proven system that works for them...

Me? I prefer value and growth. I buy companies, not pieces of paper.

Your risk minimisation strategy is a stop-loss, mine is buying excellent companies, and bailing out if I'm proven wrong.

[bull....]

The arguments raised are the typical reactions of critics of T/A if you look closely at the criticisms they actually cancel each other out.You critics cant have it both ways.

[thereslifeafter87]

Bull,

You misread me.

I wasn't criticising TA, I was explaining why it works.

Bull what causes the change from uptrend to downtrend or vice versa Without out side influence it would stay in one trend or the other

[Leai_Se_Tupe]

TLA87 is right - people follow the crowd. Because the crowd tends to react the same way under similar circumstances an outcome for a given set of circumstances can be predicted based on previous outcomes for the same or similar circumstances. The prediction may or may not be correct but is statistically more likely than not. I'm sure all traders make use of this fact on a regular basis. For example when a company announces good news the share price is likely to go up (but not guaranteed to of course). If the crowd have been behaving in a certain way causing the share price to behave in a certain way (and therefore produce a certain pattern on a chart), the future price can be predicted by studying the outcomes of previous instances of that pattern. If the previous outcomes showed that the price generally increased (say 60% of the time) then you would say that the price of the shares in question are more likely to rise than not. You would expect to be correct 60% of the time and incorrect 40% of the time. (Of course combining more than one indicator increases the accuracy of a prediction but that's another story). In this basic example you could make money on 6 out of 10 trades simply by recognising one pattern of share price behaviour.
FA people in fact do the same thing but by using other forms of measurement and other statistics to make their prediction. If a company's shares appear undervalued based on FA then it is likely that the share price will rise (but not guaranteed of course) - that is why an FA person would buy the shares in the first place. It is the same 'herd' that then needs to recognise the fact that the shares are undervalued and drive the price up. This behaviour leads to a pattern which can be recognised on a chart...:)

[bull....]

Thereslife my comments were critisms in general
Although I do believe you cannot have a self fulfilling prohecy in regards to charting as how can everyone see the same things all at once and jump to the same conclusions creating anything but a short term thing.
As far as trends completing go one only needs to look at a chart and see that price normally leads any Fundamental news which may be released.
So one could argue that Fundamental news may be the catalyst for a new trend to start but then how can charts have already been forecasting this before the fact?

[duncan macgregor]

ENIGMA Let me explain In my own simplistic way. MR MARKET Is who we are trying to figure out. TA, FA, I Incorporate both. MR MARKET Is a complete lunatic, with mood swings from highs to lows. This causes trends, sometimes with no Indication of where or what he will run to next. The person that searches for a reason will never find It ,after all a lunatic Is unreasonable. I look on mr market which happens to be you lot out there as complete numbskulls, lets face It look at some of the shares you hold. I follow trends, pickup when I think the lunatic will notice, and dump them just as quick. I will give you an Instance In history when I found out I was trading against lunatics. APOLLO MINING CO In aus, with a share price of 21c would hit 25c every time an apollo rocket went up, and fall back to 21c a couple of weeks later. THE MARKET IS A CRAZY PERSON.
TA lets you see the crazy trail,and tries to predict a lunatics journey. FA gives a common sense prediction of what a sensible person would buy. Both on there own are hopeless, but joined together Is better. I am part of mr market but hopefully not as daft. MACDUNK

[Oracle]

DM

I think you are as daft. I think you should get back to the assylum.

There are many instances where FA supports a buy, when TA signals are nil. Obviously early buyers are relying on FA, they are creating the chart for TA, are they not.

[Mick100]

MacDunk, I don't think you use TA or FA effectively. The shares you'v bought recently
such as infratil, PGG and NOG have all had huge run-ups over the last 12 months
Infratil-$1.60 12 months ago,
PGG-under a dollar 12months ago,
NOG-under 30c 12 months ago

Sorry to burst your bubble macdunk but I really don't think you have a system at all. You just jump on board shares which are rapidly increasing in value. Thats called momentum investing.
Thats got nothing to do with fundermentals and the way you go about it, not much to do with TA either.


Mick

[Mick100]

MacDunk, I don't think you use TA or FA effectively. The shares you'v bought recently
such as infratil, PGG and NOG have all had huge run-ups over the last 12 months
Infratil-$1.60 12 months ago,
PGG-under a dollar 12months ago,
NOG-under 30c 12 months ago

Sorry to burst your bubble macdunk but I really don't think you have a system at all. You just jump on board shares which are rapidly increasing in value. Thats called momentum investing.
Thats got nothing to do with fundermentals and the way you go about it, not much to do with TA either.


Mick

[Leai_Se_Tupe]

Oracle, I sense you might be a closet TA person - please feel free to ask any questions and I'll try to answer as best I can (while Phaedrus is away...:)), although I'm not an expert on the topic (more a 'hobbyist').

[duncan macgregor]

MICK, sorry to burst yours. Selective critism Is worth nothing. What about HQP, PWC, POA, TRANZRAIL POT. If you want to nit pick do the lot, look up sharechat, plenty of my predictions there. I dont seem to see many predictions from you. Tell me the whole story what system do you have? or what companies and why?. macdunk

[bull....]

There are many instances where FA supports a buy, when TA signals are nil. Obviously early buyers are relying on FA, they are creating the chart for TA, are they not.

Oracle this is where T/A becomes an Art because to some there is no logical T/A signals but to others there is ,it is in the reading of the chart and no F/A are not creating the chart.

[Leai_Se_Tupe]

Bull,

Oracle said "Obviously early buyers are relying on FA, they are creating the chart for TA, are they not."

The correct reply is "Who cares?!" TA is not concerned with specific causes of share price movement. I couldn't care less why the price was moving in a certain direction - it could be because there are more traders wearing blue undies than wearing green undies on a certain day for all I know. (FA traders invested in clothing retail companies would need to worry about that I guess).

[bull....]

Leai_Se_Tupe correct who cares but you and I both know that the Fundamentalist always has to know.

[blackcap]

To all chartists who bother

Think carefully, if everyone else compiles the same techniques as you do, then how can there be abnormal profits to be made from charting? If it is so good, (which I doubt) I am sure that finally everyone would be doing it ( it would be taught at universities too if it was proven that it was a system that could generate abnormal profits; ie those that provide a return greater than the market). This would then mean that everyone that invests would be getting a return greater than the market??????? Is this possible?????? Is the market not everyone that invests in it????? Therefore all other things constant you would expect 50% of participants to score better than the market return and 50% to score worse?

Anyway that is my rant for tonight. Have been on the turps for a while but have a quiet chuckle everytime I see chartists defending their art.

[Mick100]

Yeah MACDUNK, I'm a contrarian investor-I invest in companies which no one is taking much interest in. I often buy shares well below their NAV. eg Recently I bought some shares in TFL(unlisted)@$0.39 The NAV is about $0.65

As far as predictions go, you may remember that in early 2003 I predicted that gold and oil would be the big movers over the next 12 months.
My current prediction is again, gold and oil over the next 12 months-I expect gold to go over $500 within 12 months. This is the time to get on board Macdunk- when no one else is interested,

Mick

[PGL]

Food for thought Blackcap - My background is engineering rather than economics but the two disciplines have something in common. I think that if the whole market was composed of TA traders it would be inherently unstable. To be technical, we would get undamped feedback - once the shareprice moved slightly in one direction or other the entire market would follow The obvious consequence being that the technical buy or sell signals would reinforce hence more TA buying or selling with obvious consequences(alternatively the market would not move at all since nobody gets any buy or sell signals - this is unlikely as some shareholders will always sell because they need to free cash for other uses) A stable market needs both FA and TA, (actually we could probably get by without TA). Viva la difference!

[PGL]

Apologies to Enigma, I see you said the same thing, in a lot fewer words,about 8hrs ago

[duncan macgregor]

MICK I did take note of gold since the time you predicted. Did much better elsewhere. What was your prediction based on FA or TA or just hoping?. all the best macdunk.

[Mick100]

Macdunk, when gold goes over $500, you along with all the other momentum investors will be jumping aboard, no doubt. I'll just sit back and enjoy the ride.

Mick

[duncan macgregor]

MICK, Gold price Is measured In american dollars. Do a chart In NZ dollars, then the real price of gold Is not so hot. Tell me what you base your prediction on, an FA or a TA system or a bit of both or do you throw a dart at the board?. The NZ dollar Is rising, so the price of gold goes up whoopee. Work It out mick, HQP are almost double the price I paid, and about to rise In the short term, climb aboard for a real ride. Great announcement due out this month.
cheers MACDUNK

[k1w1]

Macdunk when you are finished with the ramp you are using on HQP can I please borrow it for SGL ?

I note you still haven't posted on why you think I bought the things. Magic mushrooms is one theory - but there are others.

All the best. K1w1.

PS Look at NUH- good news coming.

[duncan macgregor]

Kiwi, You can borrow the ramp anytime. I hope SGL do the decent thing for you but why you bought them Is beyond me. This will be Interesting, not many are big enough to stand up and risk the knockers. Ill be the one to play the silly game, WHY DID YOU BUY THE BLOODY THINGS KIWI?. cheers macdunk

[k1w1]

Ah grasshopper you seek the secret of eternal enlightenment ....

First you must look closely at the company....

Tell me what do you see MacKwai- Chung ????

Post answer on the SGL thread ....:D:D:D

[duncan macgregor]

MICK, You wondered why I bought infratile , PGG and NOG in your post on the 18th. If you dont understand look at what is happening and learn .
Incidentely HQP are due for a nice increase very shortly as well. Risk egg on the face Mick nobody is right all the time give us a few macdunk