A thought....

I was keipo-ing on ChannelNewsAsia.com Market Forum when I come across this thread "What are your paper losses/gains for those still holdings?". I feedback that I was out of the market a week ago because of bearish feelings. However, as I read on, I have found many feedback with tremendeous losses. One forumer triggered my nerve by saying that he gauged the losses (which was too painful to bare) and he did not need the money immediately, so he held on to the stock.

I was really at a lost of words because many players in the market do not have stop losses and so I feedback my frank opinion and stating that there is a high chance probability of a reversal rather than a simple correction. Seriously, in my own opinion, it is very true.

The result? I was shot back with a claim that stating of "chance" and "probability" only means such observation is rubbish and that fundamentalists have the last say. Obviously the guy who said this is a fundamentalist believer and he has no idea that what he is in is all about probability and chance. He also read too much of Straits Times.

I wonder how many of us read the Straits Time daily and noted how they describe the market performance and for what reason it does so? It was entertaining at first but it is getting boring. How can the sentiments be up because of one event on one day and went down due to another. Especially when these events are really quite insignificant. further more, do all these reports of exceuses gives any indication of market direction for the very day it is published? All I can say is that 80% of its report on market performance is useless data.

Actually, the most important factor in trading is not what technique you use, but what system you have created for trading. It does not matter if you are using Technical or Fundamental Analysis, as long as the system you adopt works for you, protect you and earn you money. Both techniques have been around for many years and definitely they have merits to survive that long. However, they are used in very different environmet. TA for trading (short term) and FA for investments (long term). Your world would like to go up-side down if you do other wise.

One final thing. Many people write off TA not because it did not work, it did not work for them. TA is an art and it is not as straight forward as spotting a pattern or blindly follow indicators using text book references.You really need to appreciate its complexity before it let you see its secrets. Many simply give up because they are in doubt that TA can delivers, they are skeptical if TA can delivers. When it went wrong for them (it always does for beginners), they label it as unreliable.

As for me, I have stuck to TA all these years and I believe it works. I still remember what my teacher said about TA, "it is not the market which is wrong, it is you who are wrong".