I think a lot of people miss the point about TA. I'm a TA purist. I take my buy and sell cues purely from charts - no fundamentals at all. Why? because fundamentals are not part of my trading strategy and usually only confuse my strategy. Strategies are boring because the winning ones continually make you money. You know you can't lose. When you can't lose its not that exciting. Whereas doing isolated charts outside of your system (for HC members for eg) is educational and adds a little more flavour to the day.
But charts in isolation are just that. Sometimes they're winners sometimes they're not. Whether the call pans out or not is of no consequence to the strategist one little bit...just move on to the next trade.
But it seems to the wider audience who have no inkling of a broader trading strategy that chartists must be forever incorrect. But the expectations are wrong. You expect a chartist to be right, when in essence a chartist couldn't give two hoots about being right or wrong - that doesn't make the money/preserve the capital; a strategy does.
In fact in one of my strategies I'm wrong 68% of the time (in reality I choose not to take certain trades but I'm still wrong 60% of the time).
If, using my TA strategy I happen to take all trades presented (and that includes all trades through the GFC) I get this -
This is taking long positions only Universe - ASX300 stocks Max Open Positions - 10 Capital Risked per trade - 1.5% Portfolio limit - 100% Margin Requirement - 50% Assuming $40 brokerage Starting capital $50,000 Trades taken - 296 Losing streak - 15 trades Expectation per dollar risked - $1.26 Peak to Valley Drawdown - $14000 (during GFC)
This is woeful compared to other TA'ers I know but its adequate for me. But, whereas some suggest charts have no part in investment, to me, fundamentals have little play.
