Sunday, July 17, 2022

Trends - Objective Analysis - THE STORY versus REALITY

What is NOT taught in school does not mean one cannot learn post formal education. I did not learn and neither was I taught or introduced the other school of analysis called CHART ANALYSIS during my graduate school back in late1980s.

I learnt about Chart Analysis in early 1990s on my own gathering reading material from the KLSE library and Stock Commodities magazines and reading books from MPH Bookshops.

I have used very short time frames (seconds) to much longer time frames in weeks and months.

Chart analysis is viewed to be NON-analytical given it does not use any numerical quantitative analysis BUT qualitative chart price trend behavior analysis.

The biggest advantage is my own experience being able to provide personal comparative analysis of both QUANTITATIVE FINANCIAL ANALYSIS versus CHART ANALYSIS.

Yes, I use my own version CHART TREND ANALYSIS acknowledging there are different many approaches to chart analysis.

I remain entrenched in Chart Trend analysis for it's simplicity and REALITY.

REALITY is about what the price trend is doing and NOT what we think it should be doing base on the Financial Analysis.

REALITY is what it is doing NOW and NOT what it should be doing with financial data.

What it should be doing does NOT tell anything about WHEN it should be doing and what it is doing NOW.

What really matters is NOT what it SHOULD be doing but what it is going to do next if one understands the price trend behavior.

We can map out all the quarterly earnings ahead PRECISELY accurate BUT that does not translate into what it is doing now and what it is going to do next.  Market will decide what it is going to do next.

We BELIEVE base on the financial analysis, the market SHOULD be holding at a certain level. All this BELIEF is about HOPE!!! HOPE is something arbitrary. Many times MARKET can and will destroy your HOPE/CONFIDENCE despite getting all the financial analysis correct.

In the school of Chart Analysis, there are 2 distinct schools i.e TREND Following and Price Forecasting. I am a Trend Follower Proponent Practitioner. The biggest risk for the Forecasting practitioner is to understand and accept that forecast can go wrong and what is the game plan if such situation happen?

A trend follower merely tracks from behind and reposition when the trend changes. Instead predicting/forecasting, trend follower WAITS and ALLOWS the changes to happen .

I AM NOT IN THE BUSINESS OF COUNTING BEANS

I AM IN THE BUSINESS OF MAKING MONEY WITH REALITY


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