What is the study of technical analysis?

coyotte · 9 March 2007

Actually Tech , as far as small caps go your only repeating what Guppy was saying a decade ago in "Share Trading " and why he generally advises against using US methods with Oz stocks .

Cheers

tech/a · 9 March 2007

ducati916 said:
Studying volume tells you little to nothing of the *crowd*.
Studying T&S will tell you little of the crowd.
Studying 8Q's will tell you about the structure of the crowd.
Studying the 10Q's will tell you about the structure of the crowd.

Technical analysis is a 50/50 proposition.
Always has been, always will be.

jog on
d998

Dis agree.

Lets take your case.

What is the crowd likely to do and how is the structure going to alter in these 2 case scenario's.

(1) Over a 24 hr period Unknown to the market 1 buyer purchases 20 million stock and price moves only 9c up (Its a $5.20 stock) Its seen as 580 trades in a total volume of 28million.Trading finishes on the high for the day.

(2) Over a 4 hrs period in ours stock we see one buyer buy all available stock in one hit to secure 20million stock.Volume is still 28 million but trades are 55.This forces price to move 35c up to secure his purchase. Trading closes 12c off the high for the day.

Now ducster tell me how do you think trading is likelly to pan out in both cases---The same?

I'm not here to convince you Duc or anyone---this is what I have found.
Its a personal thing.

You feel comfortable looking for value companies to buy.
I look at crowd behaviour.

Coyotte.

What are US methods?

coyotte · 9 March 2007

EW , Gann, Fib Nos, Indicators and most patterns .

Guppy works off a small group of patterns / price action /GMMA for Oz Stocks

Cheers

theasxgorilla · 9 March 2007

coyotte said:
Actually Tech , as far as small caps go your only repeating what Guppy was saying a decade ago in "Share Trading " and why he generally advises against using US methods with Oz stocks .

Cheers

I've often wondered about this. Does this infer that even our large caps, whilst big fish in our pond, in the context of global markets are still little fish?

tech/a · 9 March 2007

coyotte said:
EW , Gann, Fib Nos, Indicators and most patterns .

Guppy works off a small group of patterns / price action /GMMA for Oz Stocks

Cheers

Coyotte.
The tools are identical for any market its simply the interpretation.

US stocks and the market itself is just bigger crowds.
And as such would argue that once the direction of the crowd is determined Long or short it will behave more predictably.Wether that be individual stocks or the full NYSE.

ASX yes most.

Most of ours wouldnt get a spot on the second board!!---if they had one.

theasxgorilla · 9 March 2007

tech/a said:
US stocks and the market itself is just bigger crowds.
And as such would argue that once the direction of the crowd is determined Long or short it will behave more predictably.Wether that be individual stocks or the full NYSE.

This is where I diverge from many pure chartists. To me there is ALWAYS an underlying company, commodity, currency etc. In the case of the NASDAQ the crowd is big, the money flow is massive, yet with many shares the moves are notoriousy erratic. Similar issues arise in the biotechs sector.

coyotte · 9 March 2007

Tech/a

I beg to differ
the tools are for the market they where developed under.
in the same vein each stock can often have it's own price/pattern habits --- which apply to this stock only --- find that habit and you can trade in/out of this stock for ages.

Cheers

moses · 9 March 2007

coyotte said:
in the same vein each stock can often have it's own price/pattern habits --- which apply to this stock only --- find that habit and you can trade in/out of this stock for ages.

Coyotte,

interesting; care to illustrate this with examples, or would that be giving the game away?

tech/a · 9 March 2007

Coyotte.

Actually I agree totally.I'm just looking at it from perhaps a different perspective.
I'm saying that each stock/Index/Commodity will have its own crowd.
Identify how that crowd moves its Stock/Index/Commodity and there you have it.

ASX as above.

theasxgorilla · 9 March 2007

tech/a said:
Coyotte.

Actually I agree totally.I'm just looking at it from perhaps a different perspective.
I'm saying that each stock/Index/Commodity will have its own crowd.
Identify how that crowd moves its Stock/Index/Commodity and there you have it.

ASX as above.

What can I say? This makes sense...so it's all about 'the crowd'.

coyotte · 9 March 2007

moses said:
Coyotte,

interesting; care to illustrate this with examples, or would that be giving the game away?

I began to illustrate this in another thread , several months ago but got shot down by the gurus on this site -- only problem was one of the stocks in question went on to repeat the same situation 3 times in as many months -- all in profit.

Have a look at the "potential breakout thread" --- FLX as a recent example (post 249)

Your looking for MAs, Simple Patterns, Trend Breaks, Bollinger Bands Breaks anything that takes your fancy --- just ONE only of a repeating occurrence with the same tool ---

tech/a · 9 March 2007

Coyotte.

In defence of both your and my stance---it became pretty obvious how the crowd was/is moving in the XJO the trades that could have been taken as shown reflect the ability to identify with what and how the crowd reacts to different price levels ONCE SET by the crowd.

***You may have closed your position at resistance last night which would have been more the play.***

motorway · 9 March 2007

theasxgorilla said:
This is where I diverge from many pure chartists. To me there is ALWAYS an underlying company, commodity, currency etc. In the case of the NASDAQ the crowd is big, the money flow is massive, yet with many shares the moves are notoriousy erratic. Similar issues arise in the biotechs sector.

notoriously erratic = The absence of a campaign .. Of smart money....

Charts are only useful if they help give you perspective on what is happening RIGHT NOW..

With small Caps it is the RIGHT NOW that matters all the more.
Accumulation and Distribution happen at the breakout or the breakdown.
Most small caps do not have any campaign either. They are cat and dog stocks.... They sleep and sleep until they wake up and they only stay awake
if something real is happening..

(Here I mean Accumulative and distributive .. having the effect of moving price a certain way.. Small caps are out of time most of the time)

Mkts are about time frames and the time frame for small caps can be very long .. Sometimes only the smartest money can see that..

Mkts only will move if smart money moves it (That is moves that have a destination = trends)

So the crowd is not just a crowd the crowd is made up of different groups
only one of which matters.. All the other groups follow along.

The smartest Money... Has all the money.. Has no time frame.. But always acts in the moment.. Taking advantage of buy and sell liquidity as it arises and is Created..

Liquidity can always be created because the majority are always followers.

Price action moves in waves that attract a following.

Volume = Following.

All that matters is what is happening NOW.

The past is only context.

Time is relative.. Trends constantly are changing their speed...

motorway

tech/a · 9 March 2007

Motorway.

Good stuff.

nizar · 9 March 2007

coyotte said:
in the same vein each stock can often have it's own price/pattern habits --- which apply to this stock only --- find that habit and you can trade in/out of this stock for ages.

Cheers

Agree.
I remember LHG you couldve made a living off its movements.
Everytime it got to about $2.75, a few weeks later $3.10.

nizar · 9 March 2007

tech/a said:
Coyotte.

In defence of both your and my stance---it became pretty obvious how the crowd was/is moving in the XJO the trades that could have been taken as shown reflect the ability to identify with what and how the crowd reacts to different price levels ONCE SET by the crowd.

***You may have closed your position at resistance last night which would have been more the play.***

Tech.
The 2nd "long" you have at 10am on 8/3, wouldnt you have gone long from before then ie. as in where it has bounced off previously? WHat wouldve made you wait ie. what made you expect further downside? And then you wouldve stopped out as it gapped down, yeh?

And dont have a go at me - im just an amateur trying to learn a few things.

tech/a · 9 March 2007

nizar.

No once a 3 wave move was confirmed then go long with a stop just below that low.

mikeg · 9 March 2007

I am a bit confused by your chart also Tech. Why were you stopped out of your 1st short?

tech/a · 9 March 2007

Not stopped.
Closed.
End of 3 waves confirmed at Support out on close of the first 5 min bar heading long--swing trade it stop just below support for long trade.

mikeg · 9 March 2007

If that is the case then why would you be long still. Would'nt you have got stopped out after the first 3 waves when it double topped and then fell again?

Might seem like a silly question to you, but I am still trying to understand this wave thing.

What is the study of technical analysis?

coyotte

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No Ordinary Duck

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