Week in Review: Technical Tools and Technical Analysis !!

Posted on Sep 12 2015 - 7:46pm by Sharpe Trade

Fundamental analysis.  If you read our brief notes from the Medtronic PLC (MDT) call?  You might believe that we rely somewhat on ‘fundamental analysis’ when analyzing securities.  And you would be correct.

What about ‘technical analysis’?  Do we use ‘technical analysis’?

Which is the best way to approach the markets?  

If we were to be asked, if fundamental analysis works, or technical analysis works works?  Our answer would be …

Both work.    And neither.

What do we mean?  Grab your cup of coffee this weekend as we answer that question while discussing technical analysis in the following podcast …

If you prefer to listen to this podcast on YouTube, you can do so here.  Our podcasts are also on Podbean, and at the same time, we have an itunes feed and you can find our podcasts on itunes if you prefer to subscribe there …

1 Comment so far. Feel free to join this conversation.

  1. NewLife September 14, 2015 at 10:38 am - Reply

    The words “technical analysis” sound so pompous at times.Admittedly,I use the definition you mentioned once in your podcast,”a bunch of squiggly lines”. The way I look at it, consistent,accurate prediction is simply not always possible,so I use the squiggly lines as stop and entry points.

    Some technical analysis may be effective,but it may also be arbitrary at the same time.The average price times volume over x amount of days divided by whatever is no different than a meteorologist randomly measuring a bunch of data.Think if weather forecasts were created by amalgamating a bunch of weather data and just making equations out of them.That’s what trying to predict the future using these tools is like.

    New traders should just stack a bunch of stuff like CCI,MACD,Stochastics etc, and see how nearly identical the lines are. Most of them are measuring similar data,and come to very similar “conclusions.” You’ll rarely see a CCI and MACD move opposite each other for any significant period of time if they’re on the same time frame.

    I think the real reason I use technical tools is to keep me out of trades and stay consistent. In a trend,after a pullback,I like to buy/sell, and waiting for something that tells me the market is supposedly oversold helps me be more choosy. My problem is wanting to be in trades all the time,and honestly, pure price action allows me to justify too many trades in too many styles.

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