introduction 1
In the early years of my activity I thought
the stock market prices climbs down were directly related to its foundations. The
fact that a company shows good results and signals a favorable future path
should be reflected in higher prices and vice versa. In the real world ,
however , many times the thing did not work well .In search of an answer , my
outlook on the stock market began to change in 1984 when I had the opportunity
to read a book .At the end of reading the first page , I had already
begun to see the market for another prism. In fact, from the very first
sentence I realized there was something new when I read that “The stock market
is a game. All references on the situation of business, corporate earnings,
liquidity, interest rates, etc. . . . are strategies to create
market traps to players who are aware of these factors , often strange ,
illusory ,about what the market is about to do”. It was a short circuit in my beliefs!
So I decided to study the technical analysis.
In the absence of literature in Portuguese, I started buying books in American English and I gradually became self - educated .I Started by Murphy3 book, a work which was very comprehensive and very easy to read. Being a kind of encyclopedia of technical analysis, I came across a number of theories and tools that unless I know the techniques of Point and Figure Index and Relative Strength, I would never heard of. Then, I gradually was importing books on specific main themes that met the work of Murphy.
My learning process lasted about ten years, during which everything assimilated was put into practice. I tried a method and it did not work. I tried a new one and the results were repeated.
So it was during those years that I had a string of failed attempts. I do not blame the methods or the techniques for these successive disasters.
Surely, it was me to blame. Today, when I look back, I realize that my basic mistake was lying. I do not remember, indeed, in some of the books from which I leaned, where I read something about following a market placed emphatically. As far as I remember, all the theories and techniques learned were directed to anticipate what the market would do, rather, to predict the price movement before it occurred. Everything was directed to form an opinion on the market. Another aspect that generated a lot of confusion was the knowledge and use of many tools in search of harmony. I never found this harmony. But it is easy to understand why this lack of harmony takes place. Basically there are two types of indicators: Tracking trend (MACD, significant Moving Average Convergence Divergence, etc.) And oscillators (the RSI, the Relative Strength Index).
As each one is built with different logics and their authors recommend that they should be used with certain defaults, track and oscillate in time different. Thus, while an oscillator may be overbought, at the same time another may be oversold.
So which one is the right thing?
In which you can trust? What periodicity is ideal?
The same goes for the crawlers.
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