Sunday, 16 December 2012

WHY CONSULT STOCK CHARTS or TA To Make Money?



U must have money to enter the stock mkt. n u want this money to work for u perpetually in the mkt !
Before U ever buy any stocks, 3 important parameters U need to know. 
They r     i. The Stock Name u want to buy
             ii. The Price
            iii. The Time

All these 3 variables r found conveniently in a stock chart.

Before n after u buy, the stock prices r always dynamic. n again it is found niceely drawn in the stock chart. Will u now consult or look down on charts ?

So do u agree that there is no way to analyse its dna to help track n forecast the future price performance of a stock?   No or no ?


The trouble is there r so many ways to read charts. Some say science n some

will say arts. 
U also can have charts in difference time period, from month charts to week, day, hour, 30 min, 15 min, to even 5 min real-time charts.
To complicate matters, u have so many supporting indicators; candle sticks, ma, multiple ema, macd, rsi, sar n more...  Just to name a few popular ones use by TA.

There r many gurus marketing their systems n strategies in the mkt today.

I can safely said they all work except that u have to make sure that their strategy to predict good stock price increase can last long enough for u to continue smiling awhile. Do they also  have high level strategy, the likes of Zhuge liang game plan to identify the next greatest winning stocks in every cycle ?

TA has its limitation. Syndicates r specialists in operating penny stocks. They will 'manufactured' the charts to draw in suckers. Usually they will negotiate for a nice block at good price from owner. Once confirm the crossing, they will ram up the price very furiously in just 2-3 days to corner up more shares from the free float. Thereafter depending on the mkt sentiment they will spin n churn the stocks for another 2-5 weeks max till they r sold out completely laughing to the banks. If u r 'tiger' enough to play with them then I suggest u track them using hr n 30 min charts. The hr macd must stay above 0 axis. Failing which, ran ! Usually pennies will not have a 3rd wave up. The syndicates will never n very unlikely to play up 2nd time for the retailers to get out ! 


As a matter of fact, TA goes very niceely with FA stocks. All great winners have very beautiful charts = looking like Ms U. William O'Neil advised us to study the past great winners. Livermore said, 'what had happened will happen again'. Good case study to do will be the past great rise of KNM, MUHIBAH n WCT in last bull run in 06-07. Keep staring at their charts n u will certainly see a similar pattern in all of them. Then design a template to strategize your winning stock selection. 


Word of caution from O'Neil 4th edition, 'Most greatest winners once crashed will go down to 10-30% of its highest record price'. Put in quants, it is frightening vs essay as, 'Do not fall in love with stocks'.

For me, I used to spend lots of manhours understanding the FA. But have found TA supersedes FA n applies to FA stocks. So will decide when its trend is abt to change or bend over the curve. I always hear this, ' Charts can tell tomorrow's news today '.

Always stay with purebull stocks,


PureBULL










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