Using TA to time entries and exits

[Hoop]

The gift that keeps on giving. Although I'm a slow learner with this at times esp with the selling..

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Simple basic KISS strategy as KW's above is effective, why people don't make money is because they think they are smart and know more than MR Market...How many times have we heard on ST the sayings "Insto's caused this downturn once they stop it will rise back up" (suggesting the insto's are stupid) same goes for blaming smaller sellers with insulting names..Strangely enough most of this type of behaviour occurs during an established downtrend.
TA are visual aids and indicators to help one clarify the state of a Stock and simple rules such as KW's above help keep us investors away from potential trouble..and try to prevent optimistic blind investors (denial state) losing more of their money by jumping out of the frying pan into the fire (averaging down in TA broken stocks**)..** Not to be confused with buying/accumulation in dips. Averaging down is a good/lesser risk strategy when TA is not broken e.g Rising primary tide (Cyclic Bull Market Cycle)

I have a printed A4 sheet hanging on my investor workplace room at home.. I refer to it often so to make sure my thinking doesn't run off on a tangent.
My sheet is too tacky to photocopy but a better list is below which has the minor anxioms in order..
CAUTION:..be careful when researching Zurich Anxioms ..over the years people have butchered it with their own bias comments included and these butchered versions have become mainstream..
For many the Zurich Axioms seem to have less relevance today as investment strategies have improved ...hence the temption for them to butcher...What must be remembered is the Zurich Anxioms are an overall generalisation of Rules...and should be considered as a better than nothing alternative than an investor operating without any Strategy and subsequent discipline at all..

The "On Patterns" reference (Axiom) to Chartist illusions is again a broad generalisation which over alll is correct. As a Chartist I has always said the TA (chart patterns included) can not predict the future..In life nothing can predict the future...but as with the FA discipline, TA can be used as a probability (better guess) tool to favour a certain scenario outcome..
Unfortunately people misinterpret the Anxiom generalised meaning and their added personal biases can be seen in the comments...
See the Anxioms thread on ST HERE. the "On Pattern" Axiom shows that piece of butchering..obviously not a TA fan,,eh...and the bias commentator (not Lou) added the most reliant of all chart patterns (85% probability) as a 'squiggly line" as the "bad" example..hilarious...What I believe is mean't, is as it says Chart illusion...simple....Illusion in charts are very real as peoples visual perceptions of pictures differ and bias plays a big role..An expert chartist usually has a "trained eye" and they often criticse articles with false illusion which forces readers to only see that illusion.....Picture illusions can be great fun.."can you see Marilyn Munroe or like most of us see only a pretty version of Albert Einstein" ..The illusion works well and if the writer didn't mention Marlyn Munroe, would the readers see Marylin straight away with a cursory glance I would say not...With published charts in biased articles a quick glance from an expert chartist with a "trained eye" would most of the time pick that up......This is why "On Patterns" includes Chart illusions yes they can be dangerous..........

Repeated history patterns are rubbish?....Hmmm I would still take the cautious approach.
Not sure about the take profits to soon as TA discipline says let your profits run...but the generalisation is correct as the anxiom assumes you have a set strategy with accompanying discipline and set targets (e.g Target price trading)..failing to stick to your plan is of course a sign of emotion (greed).

As you read below..some of these sayings are familiar...they get mentioned a lot by TA commentators..eh

The Zurich Axioms:

Black type...Major Anxioms
Blue type...Minor Anxioms

On Risk:
– Worry is not a sickness but a sign of health – if you are not worried, you are not risking enough.
– Always play for meaningful stakes – if an amount is so small that its loss won’t make any significant difference, then it isn’t likely to bring any significant gains either.
– Resist the allure of diversification.

On Greed:
– Always take your profit too soon.
– Decide in advance what gain you want from a venture, and when you get it, get out.

On Hope:
– When the ship starts sinking, don’t pray. Jump.
– Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.

On Forecasts:
– Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly.

On Patterns:
– Chaos is not dangerous until it starts to look orderly.
– Beware the historian’s trap – it is based on the age-old but entirely unwarranted belief that the orderly repetition of history allows for accurate forecasting in certain situations.
– Beware the chartist’s illusion – it is characteristic of human minds to perceive links of cause and effect where none exist.
– Beware the gambler’s fallacy – there’s no such thing as “Today’s my lucky day” or “I’m hot tonight”.

On Mobility:
– Avoid putting down roots. They impede motion.
– Do not become trapped in a souring venture because of sentiments like loyalty and nostalgia.
– Never hesitate to abandon a venture if something more attractive comes into view.

On Intuition:
– A hunch can be trusted if it can be explained.
– Never confuse a hunch with a hope.

On the Occult:
– If astrology worked, all astrologers would be rich.
– A superstition need not be exorcised. It can be enjoyed, provided it is kept in its place.

On Optimism & Pessimism:
– Optimism means expecting the best, but confidence mean knowing how you will handle the worst. Never make a move if you are merely optimistic.

On Consensus:
– Disregard the majority opinion. It is probably wrong.
– Never follow speculative fads. Often, the best time to buy something is when nobody else wants it.

On Stubbornness:
– If it doesn’t pay off the first time, forget it.
– Never try to save a bad investment by “averaging down”.

On Planning:
– Long-range plans engender the dangerous belief that the future is under control. It is important never to take your own long-range plans or other people’s seriously.

[Added Comment?]..In essence these axioms point to the benefit of having an investment strategy and sticking to it, regardless of what other investors say or do. If you don’t have an investment strategy, you could do worse than adopt these principles. However, don’t be afraid to add or subtract ones according to what works for you.