I’m going to catch hell for this, but I’m going to start by saying I think those best at it, that I have seen, are Kevin Wadsworth, Patrick Karim, John Powell, David Brady, Steve Penny, and Gareth Soloway. This is going to be a really interesting article covering a LOT of different angles of TA, so let’s look at the full spectrum of it. There may also be people I like not on the above list, and then others who I don’t find useful, or even dangerous. I conclude with telling you what I think is dangerous.
None of this is financial advice, and for educational purposes only.
First – what is TA? Technical analysis is essentially using charting patterns to predict price movements based on behavior analysis. Investopedia gets a little more granular…
The reason you see some names listed up there is that these guys use TA within the spectrum of probability. When you see anyone with 100% CERTAINTY that (name your price here) MUST happen because of the charts, please run and hide. I had likened TA to weather forecasting, so I was super excited to hear that Kevin is a meteorologist in his 9 to 5 career, and he speaks like that. Remember the “cone of certainty” when you deal with hurricanes?
When you hear these guys talk, they say things like, “we are more likely than not to see this….there is downside risk here but I like the risk/reward upside….buying and selling tranches at these levels….could go up here, but also here’s a downside you must consider”. To me, this is the responsible use of conveying TA to an audience to educate them on what potentially has historically happened when seeing pricing patterns like these.
With super computers and many models, meteorologists can reasonably predict weather a few days in advance, but as time goes on, the fidelity of their data drops lower. You know a hurricane is out there, and you can predict within so much CONFIDENCE that areas could be affected. Notice I used the word confidence here. When you listen to some, they can come off as pompous know-it-alls “because the chart”. But for anyone who has taken a statistics class, you know about Z scores, T scores, and confidence levels. When you do surveys, the more sample responses you have, the closer the accuracy of the data to the greater population. I don’t want to go down the rabbit hole of my stats classes and Minitab days, but the idea here is that we want to look at things within a SCOPE OF PROBABILITY, then look at our CONFIDENCE with this.
If anyone out there tells you they are right all the time, they are full of shit. In fact, I’m going to try and explain here where I find TA very beneficial, and not beneficial.
I have found that TIME is something with TA that needs to be looked at, very closely. I think that using it as a price predictor in the short term is relatively useless. You can see out there with all of the best methods, tools – the best “traders”, might be hitting 52% or so. For you and I, this is terrible. But even at 40% correct, you can make money. How?
Assume the price of something is $10 and you have 90 shares valued at $900. You bet price will run up, and you had sell orders at 1/3 at $12, 1/3 at $13, and you are fully out at $14. This pattern has a possibly 60% chance of working. You started at $900. Executing this win you have $360 + $390 + $420 = $1170 to end (30% profit). However, if you bet on it to go up, but are wrong, perhaps you have your stops set at $9. You then have $810 (10% loss). Even if you are correct 40% of the time, mathematically you can still make money. Meaning, TA is not really about being right or wrong, it’s about understanding where price can go and with that, managing risks.
However, I have seen these patterns on simulations back testing 15 min time intervals, where these things are moving quick daily, perhaps for day traders. They are moving on patterns forming and getting in and out with lots of transactions a day. It may be possible under these conditions to do ok, however, the last 13 years, we have been in a bull market and “stonks go up”. It was more likely than not, the entire market was going up day in and day out since 2009, so one could also make an argument that if you just bought and held from 2009 to 2021, you’d make like a 5x on your pile. Obviously, this is in hindsight, but it then asks you what kind of risk you are doing day trading if you can just buy and hold and get a 5x?
So if you had $100,000 in the markets in 2009 and just let it roll until 2021, you would have made $450k profit.
One can then potentially see, if you were day trading this year, with high volume, on short term price action, you probably have lost your shirt. Unless, of course, you were shorting. With the bullishness of the Robinhood crowd and crypto bros, how many of them you think have shorted? Not many. People like myself almost got into shorting Gamestop (I made $600 on a put at the beginning of this) but saw how shorting can go horribly wrong with squeezes.
I find TA seems to work better for longer time periods for swing trades/longer term holds. Steve Penny helped show people examples of how he buys and sells tranches based on where he thinks the charts are pointing him. These trades might be weeks in length. When you start to get REALLY long term, price start to become an issue where there’s a lot of noise with the price, potentially inflation and deflationary impulses. The Happy Hawaiian demonstrated this for us yesterday, and I find this one example – while extreme – useful to see.
He showed first the S&P with a long time…in linear scale.
He then put that same information into log scale.
This is perhaps capturing the rate of change, and that line may then perhaps show you a slope of how it may also be competing/outperforming inflation.
I’ll get more into specific patterns below, but for the sake of part 1, I think you need to keep time in mind.
I find gold and silver fascinating to invest in BECAUSE of how complex it is to understand. However, this also goes into how hard it is for charts to work accurately with these. On the flip side, you have had Gareth absolutely nail several BTC calls, almost to the dollar. Why? Because there are no fundamentals.
You see, most of the concepts of TA revolves around human psychology and greed/fear. If you look at BTC, there really are no market fundamentals. The best you got maybe is the halving and hash rates, but other than that, you are dealing with exchanges blowing up, regulation, adoption. But these are bigger macro events you cannot really predict on a price chart. But, you can see when perhaps a country comes out and says “we are buying bitcoin”, you could see people react by buying more to front run a trade. But these types of things are rare, and with that, you are dealing with…”status quo”. Meaning…
In the ABSENCE of market fundamentals, TA can reign supreme. Let that sink in. However…..
The MORE COMPLICATED the fundamentals, the less technicals are accurate for anything more than a ballpark guess.
Let’s look at the below, how would you bet?
At this point, most would probably short or be out until it hit the lower line is hit. Perhaps some want to ensure the lower line is hit first and it turns up. The top line is acting as RESISTANCE and the bottom line is SUPPORT. Chart gurus would potentially be CERTAIN price will get to that support line. Given this is a descending triangle, the pattern suggests that more often than not, the price breaks down.
However, what happens if an announcement comes out that this product is now going to 5x its sales on a new announcement? You would think that the green line goes up and breaks out of the triangle. Perhaps an announcement comes out that says the CEO died in a helicopter crash? Price would drop like a stone.
What a lot of these charts have in common is COMPRESSION. Lots of complexities with the underlying object, and in the absences of news, some TA principles DO take effect. Sellers can get bored of no real good news and sell out to find something going up. Buyers may have sold at some of these peaks using Fib levels or Elliot Wave and find the support line a good value buy here, perhaps they link it to a possible low end P/E ratio based off of future earnings potential.
But those markets that have almost constant news streams? Good luck being accurate.
With this, the less market fundamentals, I believe the more accurate TA patterns work, and with more market fundamental announcements, the less accurate.
I’m writing this piece because I made the mistake of going at it with someone in comments on someone’s post. I should know better. At issue was I saw someone who talked about certainty with cycles and I just wanted to really try and set the record straight, as I saw it.
There is something to some cycles. I pointed out a monthly cycle in silver smashes and grabs, and I did a talk about it on Palisades. What I had noticed was at every time of the month, silver was smashed down a certain amount, and then rebounded a certain amount. I charted this for a long time – and I was able to make some grocery money with this trade.
The CHART didn’t tell me the cycle, it was an underlying fundamental regarding COMEX options and rollover. IF you could sell paper silver at a certain time, and buy it at another, you were making mad money every month. I spotted this pattern, and was able to reliably predict about where silver price would be around options expiration. Chris Rutherglen either came in behind me on this or was doing it in parallel with me, as months after my Palisades interview, I then saw him on there with prettier charts showing the “pain points”.
My point was that a cycle was identified, but it had to do with the underlying fundamentals. Not a line on a chart. This was the danger I was trying to point out. Anyone who wants to simply point at cycles and predict where price is, based on these humps, without understanding a fundamental that might be causing that cycle, is blind betting. For me, I was playing miners on these moves, and a few months after my interview, miners took a real big shit down, and with this, I had to stop playing the price action as the fundamentals changed with the miners.
If these people spoke in terms of probability, I’d probably be more open to it. But the level of certainty with this analysis is EXTREMELY dangerous.
The cups or arcs
Kevin got me looking at these a lot. These are patterns which seem to hold well over good periods of time.
Kevin got me looking at a lot of things within the prism of the arc or cup. To me, these appear to be the best way of seeing how the cruise line is turning around with sentiment. Perhaps you see this as a bottoming or topping pattern. If you look at these arcs, they are more or less head and shoulders or double/triple bottoms in a sense where you can see this pattern play out over a good amount of time.
To me, this has been the most reliable of all of them to see a longer-term trend. The problem is, to capitalize, you have to buy when something is low. Remember, fundamentals? If you take what I’m saying here as certainty with cups, then go out tomorrow and buy a cup pattern, you might also be not tracking a fundamental that we could be seeing a crash soon. So….cups might break soon, and not in a good way. For example….
You can find a lot of these types of graphs on the internet. There is some truth to these, but remember, within the prism of PROBABILITY. You can see I have the cup/arc above showing S&P going down. You can see the megaphone pattern continuing lower. You can SEE the FUNDAMENTALS pointing to higher rates coming, more pain in job numbers, and worse earnings coming. But, if tomorrow, they decided to stop rate hikes and do an immediate 100 bps reversal in rates, would that not break the pattern? So…as long as the FUNDAMENTAL continues, perhaps the patterns will continue.
But with these rates slowing, stopping, and then pivoting – we CAN see history of prices (TA) with gold showing this is good.
One can also think that perhaps the markets and gold are diverging?
One thing I do like with TA is the support and resistance lines. TA may not be able to predict certain things, but it might give you an indication of where buyers and sellers may be, as a relation to greed and fear.
In this chart, I am showing a long term linear price line to show where gold may have STRONG support.
What this tells me, possibly, is a downside risk exists in my trade – perhaps down to the line. Right now, for gold, that’s like $1450. Imagine tomorrow the markets tanked on several major banks doing a Lehman. The suggestion here is everything could be sold and the PAPER price of gold might hit $1450 as everything is liquidated in margin call fire sales. Around this line, IF the bull is still in effect, you could potentially have MASSIVE amounts of paper buyers. So we could see a FLASH DOWN here, but one could reasonably expect a FLASH UP to immediately follow. However, if the bull is no longer intact, and all central banks started selling ALL GOLD tomorrow, this line could be broken.
Now, if we do this in LOG scale, you can potentially have seen us hit the LT trend line and recently bounce off of it.
This might mean that in an event where a general market crash hit, that gold support may be right below where we are currently at. Perhaps the recent divergence in price of markets and gold are indicators that if stronger market moves down happen, that gold may rise, hold steady, or catch a bid here slightly lower.
Linear or log? Up to you, but these are lines on a chart.
I believe there’s something to these, but you have to be careful because you may get burned thinking they are hard support lines.
If we just look at the Fib retracements of silver recently, the big takeaway here is “higher highs and higher lows”. In these retracements, you can see how out of the last 6 rallies, 4 have STOPPED directly at a fib line. One of them, the second one, was caught between two, and the most recent one is not completed yet. You can then also put this into a bigger Fib. This shows a pretty healthy little run here, with a touch on the .238 and it bounced hard off of it. Do we have a higher high ahead?
I’m not great with doing the Fib extensions, but the idea is sentiment can become TOO bullish, where you get some FOMO in, and then the professionals start selling to the FOMO crowd. The FOMO crowd slows in buying, and then you may have the pros come back in and short and push price down. Rinse and repeat.
Here, I wanted to look at what I think are the 2 most important for the swing traders and longer term holders.
In the blue above is the 50 day moving average, and the red is the 200 day moving average. When the 200 crosses down over the 50, they call that a “death cross” and that’s not a good thing. On the flip side, you can see the 50 is about to cross back up over the 200 which is a “golden cross”. Much better. But the 200 dma is also trending down, and it would be nice if that was sloping upwards. This golden cross could happen in a few days. Could this continue to push silver higher, even with options expirations on 12/27? You could possibly see touches down to the 20 day or 50 day and bounce off of that.
The 20 day is just under where we are now. In purple. Look at the big green candle when the 20dma went up through the 200 dma.
Overall, moving averages can also work in a sense like the Fib levels or chart lines by showing you places where people might be buying or selling. But, these are not RULES, they are approximations, again, dictated by market fundamentals – when they exist.
By looking at the RELATIVE strength index, you can see when sentiment is really high and energy is pouring in – but it also can kind of show you something stalling out.
If you look at silver below, you can see in this recent 3 month up move since Sept that the RSI has hit several peaks, then come down and caught a bid. The type of pattern this is could indicate a strong RSI move down is coming. When this starts getting at the 70 level or so, you might see human behavior start to sell. As price starts to decline, you are seeing the sellers outnumber the buyers. This chart could indicate we might have a move up to 70 RSI yet before we potentially hit the top rail OR we could break down any moment now.
One might use this to get into bigger positions for longer holds. IF you are just using the MACD, you might be seeing a sell signal very soon.
In the above, you can sell in the red crossovers and buy in the green crossovers. Sometimes this lags too much, and by the time you sell, the sell move already happened. Same with the buy. If you look at all of the buys and sells there, you are making money in the middle of the moves – you risk missing the highs and lows.
For me, one of the most compelling uses of charts isn’t really TA patterns, it’s ratios. To me, I find a lot of value in understanding value relative to other things. If you are sitting on $1m today, what do you put it in? A gut reaction may be Apple or Berkshire Hathaway. Maybe even an index fund. But what if I told you markets and housing are SEVERELY stretched relative to gold? Maybe you wouldn’t care, but consider that it’s been 13 years since a ‘recession’, and we could have a severe one here given it’s been so long. With this knowledge that markets could perhaps go down 10-30% from here, would you still pick Apple or BH, or would you perhaps pick a defense play like gold?
This is why a lot of us got into gold/silver in 2019, as we saw bad things coming in the markets. None of us really saw $6T in money printing, which essentially popped the markets and housing into a giant bubble – as well as crypto. That punch bowl is being taken away, now.
With the above chart, you could see we might head down to a 6:1 ratio – IF my fake lines on a piece of paper mean anything. Let’s assume the stock market drops to 24,000. That could mean gold hits $4,000? That ratio was hit in 2011, so why is a $4,000 gold price silly? Perhaps it is. What if we top at $2,500? Well, let’s take the price of gold and times it by 6. That gives us 15,000. So if the stock market to gold ratio hit what it did in 2011, that means the Dow could fall over 50% from where it is now.
Meaning, you would have to think one of a few things…
- Gold has to go higher than $2,500
- The Dow can’t lose 18,000 points because a pivot would have to happen first
- If the pretty lines are correct, gold probably could be north of $3,000 before a stock market bottom hits.
You can then go further with ratios, and assume gold prices with miner stocks.
You can see since Sept, gold miners are outperforming gold.
But that lower rail, which was touched several times, has the gold to GDX ratio hit 44. If gold hits $3,000 and the GDX outperforms gold, that has a GDX price of $68. It’s at $28 now. So, at $3,000, that’s a 2.5x from here. Many might then buy options on something like that, and lever it up more.
So, if you think 2023 might be a dark time for the stock market, charts can potentially help you to find where to put cash where you would not only be defensive to the markets, but profit off of them handsomely.
Warning – there’s a lot here also with the dollar that must be taken into account. IF we can potentially see a pivot coming, the DXY might start to fall anticipating lower rates ahead. This essentially is the fuel gold might need to go higher. I believe, like many, that gold is sniffing this out, and will perform well in the coming months. The linear vs log tells you there is some downside there, but how much is up to your personal beliefs.
We can then look at a gold to silver ratio as well here, and if 3,000 gold is where we are going, we can then plug that in…
We can see that in 2011, the GSR hit in the bottom pink part, and peaked at about 30:1. If gold hits $3,000, this has silver at an upside of $100.
I have to warn people on junior miners. I LOVE THEM. I love the story. I love the process. But the entire market has a lot of shady people in it. I believe all of them get into it wanting to build a mine. And then, before they know it, they are millions in the hole and they start turning into shady sales people to get people to either support their CEO lifestyle or be a bag holder as them and others get out.
I saw someone I follow post 4 junior miner charts, and I wanted to chime in and warn people.
Below, I am going to show you a few miners and how to interpret a few things.
The above is KORE mining. I had used this in some trades and did well, but I got out 6 months before hell broke loose. When you first see a chart like this, you first might see the high value. Oh my god, this used to be a $1.50 stock! Well, one thing you must understand with junior explorers/developers is that they have no income. So, in order to explore, build, anything – they have to issue new shares, borrow money, sell streams, or sell assets. When they issue new shares, they are diluting your ownership stake in the company.
Let’s assume a small company has 10 shares, and each share is worth $1. You own a share. This is based off of the projected earnings from this lemonade stand. However, they want to do market testing, product development, and research on the best flavors of lemonade. They issue 10 more shares at $1. The problem is, that earnings pool is now half of what it was, so your stock price you had owned at $1 is now worth $.50 in the open market. Issuing new shares like this now put downward pressure on your stock price.
In a different situation, you had FSM buy Roxgold with newly issued shares. This had a BEGINNING effect of putting downward pressure on the price, which happened. However, assume they diluted by 50%, they then more than doubled their earnings. In that case, the share dilution was to then get a LOT more revenue which made it a genius move by Ganoza. You could take on debt, but that debt then is overhang to profits for years.
Meaning – when you do TA on junior miner charts, you are doing TA on a price that is moving down potentially due to massive share dilution.
If you just used TA on Kore above, you then potentially saw the price move down. It did!
But….it then gets much worse. Why? Not because of the charts. Because of PERMITTING.
So…is KORE a good buy today? Due to permitting issues, I’d stay the hell away for now. TA did potentially tell you there was trouble ahead – as over time, more and more people read more about them and sold out. But relative news and real fundamentals drove this price into the ground.
Meaning – with junior miners, you have to be VERY CAREFUL when using TA. You have share dilution, streaming deals, debt, permitting, and shady CEOs all over the place potentially lying. Or, perhaps not de-risking enough. Take a look at pure gold. Which was Pure Shit.
I got into and out of this a few times so I never lost money on it like so many did. I got lucky on this one and traded it only. I first heard of this from Jeff Clark in 2019 and it seemed like there was a promise of the stock to perhaps get to $6. From what I heard on the postmortem is that proper de-risking of a feasibility study wasn’t done, and the strategy to mine was done incorrectly (thanks to Neil Ringdahl for pointing out technically what they did wrong). If you just traded the charts here, you were seeing misses all the time on revenues, problems with mine plans, dilution, etc. Then, the fundamentals hit and you can see the gap down. Then, fire sale. You can see this type of thing with many other miners. I think USAS was a good example as well.
You can even look at a silver mid-tier (or major, depending on your definition) with First Majestic. When I first got into mining stocks in late 2019 early 2020, AG was a darling to me. I love hearing Keith on interviews. But when you look at the charts, the major problem you have with trying to draw price lines is the sheer volume of share dilution they have, which makes the price action very wrong. You can say the market accounts for it, but I don’t think retail guys drawing lines on charts have caught on to the share dilution issue yet. So a $9 share price today isn’t the same as a $9 share price 2 years ago.
Now, you can see on the charts in the green circles where the price of the shares are the same as today.
You could see there’s perhaps 33% more shares than in 2018. You can see the company has a lot more equity than in 2018. But earnings are all over the place.
I’ll leave the detailed analysis to Taylor Dart, but one problem you also have with lines on charts is they tend to have problems with share dilution. You can say the market adjusts, and they probably do, but companies like First Majestic trade on a “Keith Neumeyer Premium” – meaning, if this was any other CEO, these shares may be far lower. Since everyone knows Keith from YouTube, anytime retail thinks of silver companies, they run to First Majestic.
Meaning – TA is troubling here, at best, due to a retail premium.
Putting it all together
You can see all of the items above I talked about playing out. Cycles – the red line is the options exp. You have the RSI, MACD, 200dma, 50dma, 20dma, arc, and Fib.
I DON’T KNOW what is going to happen with silver. I also know that historically, December is a good month for gold. And, by proxy, silver. I also know we are in the midst of a potential market crash, in which silver could be viewed as an industrial metal and tumble with the markets. I can see….
- There appears to be a cup with a bottoming pattern, suggesting there is room for downside movement to touch the arc wall
- You can see the buy/sells with the MACD, and it is AWFULLY close to a sell. But sell signal NOT YET.
- RSI showing VERY high and this pattern could still run a little higher or drop off of a cliff
- FIB retracement of BIGGER move only at .238. Seems there could be further downside correction ahead. I see a number at $20.16 hitting an arc wall, but we can call this $20 to be ballpark as probably a low for the arc.
- The 200dma might serve as STRONG support and it’s at about $21.17 and slightly rising. The 20dma is at $22.35 and probably would not hold on a strong sell move.
- There is 6 trading days until options expire, and my bet is we will see downward pushes to rob the longs of premiums, as well as shorts.
- I had looked at several support resistance lines earlier in the month and projected about $21.31 to be the floor for silver.
So I am using TA here in the means of understanding price action IF the macro element is to be trusted as the driving force of price. Different macro events could pop up at any given time during the week which could change this. What if we learned on Tuesday that there’s an announcement of MAJOR silver shortages all over the world with wholesale? Would you not think longs would hop in, in order to front run a trade where silver would go up in price?
I can use TA here to SUPPORT a MACRO thesis. That is, I believe the silver options expiration CYCLE may drive silver prices down to about $21.31. If all hell breaks loose, we probably have very strong support at $20. OTHER MACRO EVENTS can negate this, as THESE EVENTS could SUPERSEDE IMPORTANCE of EXISTING MACRO.
Please re-read that again. Carefully.
The guys I listed above are the best at using a LOT of tools to come up with forecasts, and many of them like Brady will add fundamentals in. Even then, these guys are CAREFUL to talk about this with probability speak – “we are likely to see higher prices next year, but ST it could go up or down. If up, you have a high at x, and if low, you have a low at y”. Many see this as double speak, but you can look at this with stops and taking profits in mind for trades.
With all of the charts above, you can REASONABLY see that in the next 1-2 weeks we have a short term downside in silver for silver options at $21.31 to $20, but after that, as the economy slides further into recession, we can see the Dow to gold ratio lower, sending miner prices up in 2023 – and with this, it is reasonable to see the gold to silver ratio lower where $50 silver during this recession actually might seem like a low number.
Overall, anyone using TA MUST do it with the understanding of underlying fundamentals of what they are looking at. IF you just trade patterns and use no other tools, you are going to get your ass handed to you. Risk management is key. Understanding forecasts and probabilities is key. With the above, I could see myself after the holidays (after ST downside with options) buying 6-12 month GDX/SILJ call options with play money. Options are super risky, and they could go to zero, but this is how I would use TA to come to the bigger macro picture here. This is NOT financial advice, only showing you how I might use TA above to COMPLIMENT my macro analysis to then find places to buy and sell.
I’m not a millionaire. My PRIMARY investment is in real estate. I got into gold and silver in 2019 to hedge against my real estate values knowing a shit storm was coming. I had made money on miners, but the last 2 years, I got my ass handed to me with QE spending $6T to pump everything up. I lost MAJOR money on paper in miners (I did not sell), but I GAINED 6x my miner losses in real estate paper equity. I KNOW this equity is a mirage, and as the economy gets worse, this paper value will go down – but I expect my PMs and miners to soar. THIS is a HEDGE against my RE. And, the hedge to me looks good.
The problem with that thinking is no one really knows. EVERYTHING could be sold off, the DXY could hit 130-150, and even gold/silver could be sold off in a depression-like scenario. So even a hedge against falling real estate could fail, as my gold/silver are more or less bets against the dollar. So, there is a real problem there in that people should also have SOME cash. Currently, my trading account is about 50% deployed and I’m waiting until the new year to see what happens. If there’s a cliff dive and EVERYTHING is sold for cash, my BET (and I use the term BET) is that a lot of this cash will roll into defensive things like treasuries and gold, but I believe the world now is stocking up on gold and relying less on treasuries. Meaning, I believe gold in this cycle will outperform treasuries as a safe haven – given also the Fed is to be offloading $100B per month in treasuries, potentially keeping the value of these low. More people rotating into these will be buying at a consistent 4% yield, as the rates can’t go lower if the Fed, Chinese, and Japanese are all selling monthly into this pool. This is good yields in a down market, but these higher yield buys make the debt servicing level higher – but also do not ever go lower to entice people out of it to then get back into the markets. This then appears that as long as the Fed is selling these – we could have a sustained recession.
This could then potentially have gold hitting that $3,000 and higher number.
I think people need to be careful around TA, listen to the pros in the context of their own due diligence, and understand the macros of the markets they are investing in, and not just look at lines or humps to invest in markets.
In my MBA classes, there was no “technical analysis” class. There are people who wrote books on TA who are “gurus”, but I need to ask you serious questions here. How accurate can it be – in a PURE sense – if the guys pushing this as the ONLY means of doing trade aren’t worth millions or billions? IF it was REALLY good, wouldn’t the accuracy of these patterns be a lot higher?
I am writing this to ADVOCATE FOR TA – but used responsibility, in the FRAMING of PROBABILITY, BEST UTILIZED when you understand the UNDERLYING FUNDAMENTALS driving what you are charting. The people I mentioned I am huge fans of and listen to their input, but I then go to my charts and see if I’m seeing the same things. These guys are very open to chat, are friendly, and want to help people. Some are selling service to help educate you, and if you trade, I’d advocate you looking into their services.
My DANGER sign goes on when I see people with charting certs (which are not recognized by pretty much anyone) that want you to buy what they are selling, don’t have millions or billions in the bank, and tell you price action is the ONLY thing that matters. As they are driving a 22 year old Suburu. If you see a charting guy with $10m plus in the bank that ONLY deals with price action and has some sort of unbeatable system, please point him in my direction so I can advocate for him. Until then, those who have 100% CERTAINTY in charts because of a cert are the guys I’d be worried about following without some levels of skepticism.
Remember, all of this is about risk management and probability. Not about RIGHT or WRONG.
I have done a ton of TA over the last 3 years and it helps me spot some trades. It’s a tool for me, but not a divining rod.