Which indicator is more reliable?

VALUEPICK · 1 Which indicator is more reliable? Sat May 14, 2016 5:39 am

VALUEPICK

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I found following indicators for some stocks during first four months of this year.

Hourly, daily, weekly and monthly indicators

Some stocks were bullish according to weekly or monthly moving averages and technical indicators but they were strong sell according to the daily and hourly analysis. Today those stocks have become market beating stocks.

It is very interesting that I found some stocks are very bullish on the basis of monthly technical indicators and moving averages but bearish on hourly or daily indicators. According to technical indicators, some stocks can buy and according to moving averages we should sell those stocks and vice versa.

Therefore, I believe it is better to identity major uptrend in stocks.

I also saw lot of short term bearish analysts on media during that period. According to them we should sell stocks in January, February and March should not buy stocks. Even short term technical indicators predicted bearish outlook.

On the other hand some smart investors globally including Sri-Lanka took advantage from this panic and bearishness and built their portfolio wisely without following any indicators or other crowds, by applying common sense, by identifying great value and by identifying industry outlook and market outlook etc. I believe current volatility in global stock markets is going to create another great opportunity in 2016.

Only future earnings and future strong balance sheets will drive stocks prices in the mid and long term.

charith666lk · 2 Re: Which indicator is more reliable? Sat May 14, 2016 6:18 am

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Super article VP. Thanks expert.

VALUEPICK · 3 Re: Which indicator is more reliable? Sun May 15, 2016 9:28 am

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VALUEPICK · 4 Re: Which indicator is more reliable? Sun May 15, 2016 9:28 am

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http://www.followingthetrend.com/2014/05/why-technical-analysis-is-shunned-by-professionals/

Why technical analysis is shunned by professionals

http://www.fool.com/investing/value/avoid-the-mistake-that-cost-buffett-8-years-of-bet.aspx

Avoid the Mistake That Cost Buffett 8 Years of Better Returns

Chinwi · 5 Re: Which indicator is more reliable? Sun May 15, 2016 10:35 am

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From the article Valuepick linked

Are you saying that all technical analysts are scam artists?

The problem is not with the concept of TA.
TA believers follow the charts and trends drawn in their minds by "put EPS, AVPS to dustbin" type people who use these concepts to deviate the crowd from ground reality.

VALUEPICK · 6 Re: Which indicator is more reliable? Sun May 15, 2016 10:53 am

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Chinwi wrote:From the article Valuepick linked

Are you saying that all technical analysts are scam artists?

The problem is not with the concept of TA.
TA believers follow the charts and trends drawn in their minds by "put EPS, AVPS to dustbin" type people who use these concepts to deviate the crowd from ground reality.

Yes. I agree with you.

No I am not telling that all technical analysts are scam artists. Technical analysis has become part of today’s financial world. They have to rely on it to take decisions on daily and short term movements in currency, commodity and stocks. I just saw some different type of link and I posted it.

Chinwi · 7 Re: Which indicator is more reliable? Sun May 15, 2016 4:52 pm

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@ valuepick,

I got that question from the content of the article and the author has given similar like answer.

No, I wouldn’t go that far. There are actually plenty of professionals using concepts originating from technical analysis. Usually they don’t use the term though, for reasons made clear above. A large part of quantitative, systematic trading is based on ideas from that came out of that field.
There are even many people with the job title of technical analyst who are serious, competent and responsible professionals. These are the people who need to take a stand against the scope drift of their field.

As I said, I and many others in the hedge fund business use ideas and concepts from technical analysis. We look at charts, we use the occasional indicator, draw conclusions from price patterns and run simulations to test quantitative time series theories.

BTW, I do not believe TA other than for short term trends, EMA, SMA. I watch some patterns to study others (TA followers') minds and use those signals to determine their actions. So we can act before or with them.

I feel following TA is like 'horata kalin kehel kanata paninava' type thing.
They draw lines according to past movements and predict future by looking at trends or patterns. Then all who believe follow it and trade accordingly. Then they say, see TA is correct. Market behaves as per our reading.

TA is studying how peoples minds reacted to past signals and match current situations. But, in Sri Lanka I don't think even that is possible because of the level of manipulating done with many stocks. Actually crooks use TA signals to push (or down) the prices to unbelievable levels and then say it was a genuine trend , even TA predicted this behavior.

Yahapalanaya · 8 Re: Which indicator is more reliable? Sun May 15, 2016 6:33 pm

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TA would produce good prediction charts for seasonal counters since pattern would be consistant.

Would TA give good analysis or prediction if there is any new taxes and some budget proposal impacts...

Neutral

VALUEPICK · 9 Re: Which indicator is more reliable? Mon May 16, 2016 11:31 am

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Chinwi wrote:@ valuepick,

I got that question from the content of the article and the author has given similar like answer.

No, I wouldn’t go that far. There are actually plenty of professionals using concepts originating from technical analysis. Usually they don’t use the term though, for reasons made clear above. A large part of quantitative, systematic trading is based on ideas from that came out of that field.
There are even many people with the job title of technical analyst who are serious, competent and responsible professionals. These are the people who need to take a stand against the scope drift of their field.

As I said, I and many others in the hedge fund business use ideas and concepts from technical analysis. We look at charts, we use the occasional indicator, draw conclusions from price patterns and run simulations to test quantitative time series theories.

BTW, I do not believe TA other than for short term trends, EMA, SMA. I watch some patterns to study others (TA followers') minds and use those signals to determine their actions. So we can act before or with them.

I feel following TA is like 'horata kalin kehel kanata paninava' type thing.
They draw lines according to past movements and predict future by looking at trends or patterns. Then all who believe follow it and trade accordingly. Then they say, see TA is correct. Market behaves as per our reading.

TA is studying how peoples minds reacted to past signals and match current situations. But, in Sri Lanka I don't think even that is possible because of the level of manipulating done with many stocks. Actually crooks use TA signals to push (or down) the prices to unbelievable levels and then say it was a genuine trend , even TA predicted this behavior.

Chinwi

Very interesting! Above article is also very interesting.

http://www.moneycrashers.com/the-best-way-to-invest-fundamental-or-technical-analysis/

The Best Way to Invest: Fundamental or Technical Analysis?

https://www.quora.com/Why-do-some-investment-banks-still-use-technical-analysis-in-their-analysis-reports

Why do some investment banks still use technical analysis in their analysis reports?

https://www.quora.com/Who-are-some-successful-investors-traders-that-use-purely-technical-analysis

Who are some successful investors/traders that use purely technical analysi

VALUEPICK · 10 Re: Which indicator is more reliable? Mon May 16, 2016 11:46 am

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Yahapalanaya wrote:TA would produce good prediction charts for seasonal counters since pattern would be consistant.

Would TA give good analysis or prediction if there is any new taxes and some budget proposal impacts...

YP

I don't think so. Do you have any idea about this?

Yahapalanaya · 11 Re: Which indicator is more reliable? Mon May 16, 2016 9:39 pm

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VALUEPICK wrote:

Yahapalanaya wrote:TA would produce good prediction charts for seasonal counters since pattern would be consistant.

Would TA give good analysis or prediction if there is any new taxes and some budget proposal impacts...

YP

I don't think so. Do you have any idea about this?

Idea about what..