futurecurrents,
this is the type of posts I would call a lesson in technical analysis in reply to your "CNBC & Gurus" post ... but before I do, I'd like to clarify that I'm not a guru, I'm simply a true lover of the art of technical analysis .. please read the following part, from one of my articles ... then I would resume on another post :
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The stop-loss level, actually implies much more than just an alert to square a trade with a minimum loss. It demonstrates the great flexibility of the art, since as we will discover later, technical analysis is a very subjective art. Consequently, two technicians may sit to analyze the same chart, and yet come up with two opposing views or recommendations. The market would eventually move in favor of either recommendation, and by doing so, break the stop-loss level of the other. At which point, both analysts would meet, since in most cases the break of a properly placed stop-loss level, implies a reversal in the prevailing trend. Such an example also shows, that by expressing a technical view, technicians actually have two views. A preferred view, upon which their recommendation is based, backed by higher odds on the one side. And a counter-view where the market would move against them, break their stop and cause them to get out with a minimum loss on the other. So technicians may disagree as much as they like, as long as one day they know theyâll all take the same road home. A very dear friend of mine once told me when were exchanging views on the US Dollar / Deutsche Mark chart : âWe both agree, then weâre in trouble !â. And I will treasure that statement for a lifetime to come, because if we only consider the preferred scenario, we eventually get obsessed by it and refuse to listen to the chart or accept any other outcome, and thatâs when weâre the most exposed to severe losses.
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this is the type of posts I would call a lesson in technical analysis in reply to your "CNBC & Gurus" post ... but before I do, I'd like to clarify that I'm not a guru, I'm simply a true lover of the art of technical analysis .. please read the following part, from one of my articles ... then I would resume on another post :
--- Start of Quote ---
The stop-loss level, actually implies much more than just an alert to square a trade with a minimum loss. It demonstrates the great flexibility of the art, since as we will discover later, technical analysis is a very subjective art. Consequently, two technicians may sit to analyze the same chart, and yet come up with two opposing views or recommendations. The market would eventually move in favor of either recommendation, and by doing so, break the stop-loss level of the other. At which point, both analysts would meet, since in most cases the break of a properly placed stop-loss level, implies a reversal in the prevailing trend. Such an example also shows, that by expressing a technical view, technicians actually have two views. A preferred view, upon which their recommendation is based, backed by higher odds on the one side. And a counter-view where the market would move against them, break their stop and cause them to get out with a minimum loss on the other. So technicians may disagree as much as they like, as long as one day they know theyâll all take the same road home. A very dear friend of mine once told me when were exchanging views on the US Dollar / Deutsche Mark chart : âWe both agree, then weâre in trouble !â. And I will treasure that statement for a lifetime to come, because if we only consider the preferred scenario, we eventually get obsessed by it and refuse to listen to the chart or accept any other outcome, and thatâs when weâre the most exposed to severe losses.
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