Technical traders

Hello everyone,

Today I want to share a link with you all. Click the url below, and take some time to read through the article.

http://etfhq.com/blog/2010/02/17/top-technical-analysts/

Have you ever wondered why you are still looking around for material to improve your technical analysis skills? Have you ever wondered why people still search for the “profitable strategies” in technical analysis? Maybe you already decided some time back that technical analysis suits you, and you will rely on it to make your passive income. I consider myself a young participant of the markets, and – obviously – I have the letters T and A printed on my flag. Certain events have led me to pursue this school of thought. What those events were is not relevant in this post. But, I believe I will be successful in the markets in the long-run by using technical analysis. Sometimes when I am debating with my friends on the infamous topic: technical analysis versus fundamental analysis; or in short, TA vs FA, there will inevitably come a time when someone will shoot the supposedly final bullet: “Warren Buffet is the richest investor in the world, and he is a fundamental person. Period.”

I am sure some of you may have experienced the above scenario. Whether it be a friend, or just yourself debating TA vs FA in your own head, and coming to the same conclusion. After finding out the link above, my heart felt a slight sense of reassurance. Scroll down the webpage in the link, and you will see a Mr James Simons ranking 55th in Forbes’ 100 richest list. Yes, most if not all of us probably have not heard of the names of those people mentioned in the link. But we have certainly heard of names like Warren Buffett, Peter Lynch, George Soros, Jim Rogers, and so on. So once again, the fundamental camp will say, there is no household name to represent you people in the technical analysis camp.

I have just this to say: a billion dollars is a billion dollars, a few hundreds of millions of dollars is a few hundreds of millions of dollars, and a humble ten thousand dollars of side income a month is still a humble ten thousand dollars of side income a month. Yes, the richest technical traders/investors may not come close to Warren Buffett’s wealth. But how many of those using fundamental analysis can say they have a billion dollars? Even though we may not know the number of extremely successful technical traders compared to the number of successful fundamental traders. What we technical traders can be sure of is that there have been some of us who have gone far, who have made alot of money from using technical analysis. While that does not mean sure success for everyone who looks at charts, at least we do know technical analysis is not an untested and untried road. Closer to home, there are people who trade forex/commodities/etc based on technical analysis, and they make a good side income every month. Some also trade for a living, and rely heavily on charts. The reason why we do not hear of all the successful traders out there is simply because not everyone likes to harp about themselves. Some prefer to keep quiet and stay out of the limelight. Some prefer to remain low-key. But that does not mean the technical analysis camp is filled with irrational, star-gazing, coin-flipping traders – as some people like to associate with chartists.

So, the point I am trying to make in this post is that there are those who have made alot of money from using technical analysis in financial markets. Yes, there are many and more who have lost money relying on technical analysis. But, can those in the fundamental camp claim that they have no unsuccessful traders/investors? While it may sound like I want to launch an attack on the fundamental investors, it is not so. More so, I want to defend the technical analysis camp. I want us to know technical analysis is not a new, untested school of thought. The next time someone tells you that Warren Buffett is the most successful investor, and the phrase “technical analysis” does not appear in his dictionary, just know in your heart that there are those who have amassed more than a billion dollars from using technical analysis in the financial markets. While no known technical trader has broke into the top 5 in the richest list, there are those who are millionaires, multi-millionaires, and as we have learnt today, billionaires. Is that not enough money for you?

 

Note: I am not implying that technical analysis directly translates into heaps of profits. But, we should know that there are those who have done it. Without household names, sometimes we think technical analysis is a “young art”, with no known success stories out there.

 

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