Archman Investor

More on Technical Analysis

Ok my 2 cents:

I used both technical analysis and fundamental analysis when buying a stock as an investment. I did not say for a "trade" for I am a lousy short term trader, the worst there ever was.
I use fundamental analysis first to learn everything about the company all its metrics, etc. The comes the T/A. Even if all the fundamental analysis in the world looks good, I wont buy a stock that is falling, falling like a knife, or in a long term down trend. Think about the folks who bought lets say PFE over the past 5 years. Regardless of drug patents other problems, etc, they were still minting billions a year, yet the stock keeps falling. Why? T/A tells you it is in a long term downtrend, etc, etc. Sure you can take a flyer on it, but why not wait until it breaks that downtrend?
T/A got me into BSC back in early 2003, and got me out in early 2006, when the stock went ballistic above its upward trending channel. Did I know it was gonna eventually go bust? Ofcourse not. I would have ended up selling anyway once it broke its upward trend channel anyway long before it ever got below $130 at the time.

Bottom line: IMHO T/A is used in conjunction with fundamental analysis. Luck also plays a role in it, for there is no way anyone can anticipate an unforseen bad news release etc. I think respect should be paid to both fundamental analysis and technical analysis, and both should not be dismissed outright. Again I am not a trader so I am not knowledgeable on using T/A for short term, swing or day trading.