The Lemon Fool

I am still musing over the best and shortest description for the Board.

How about:
Reading markets using price charts and technical indicators.
Reading Markets with Price Charts and Technical Indicators


serps also made a good suggestion but I cannot find it!

Please agree and I will post to stooz.

OC

Charts to give you direction in the market?

I think 'forecasting' might be clearer than 'reading'.

Or per Wiki, they define it as 'In finance, technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.'

D Echo,

I deliberately avoided "forecasting" as it has been contentious on the MF Board. Of course, personally, I believe it to be used for forecasting the direction of a market and I can't see why anyone would bother with TA if it is only descriptive.

Murphy classifies TA techniques into charting and statistical techniques. Most trading today is based on methodologies derived from statistical series like moving averages, volatility and regression.

Chartists like myself looking for pattern and trend in price are very much in the minority.

I was trying to boil it down to the absolute minimum of words to which no one could take exception!

Wonder whether we could try the patience of stooz and ask for poll facility?

OC

oldcharlie wrote:I deliberately avoided "forecasting" as it has been contentious on the MF Board. Of course, personally, I believe it to be used for forecasting the direction of a market and I can't see why anyone would bother with TA if it is only descriptive.

Hmmm, not sure how TA being forecasting might be contentious. TA isn't a statement of fact but rather informed expectations, similar to a weather forecast.

Maybe you could put on a 'bald pate wig', a Michael Fish moustache and tweed jacket and on darker days in the market keeps our spirits up a la ... 'I'd like to reassure a caller that reports of a major storm approaching are exaggerated'*? [hehe - /jk]

If you forecast primarily for the FTSE, maybe a board sub-heading of 'Weather outlook for the FTSE', or something along those lines...

*for those too young to remember that was the conclusion of the BBC evening weather forecast on the night before one of the biggest storms on recent times hit the country.

As I use TA it is both an art and a science.

The science is the collection and interpretation of historic data.

The art is in judging the interpretation from the analysis.

This is done using established TA methodology.

I like it Foxy starting TA.

By temperament I am indecisive and have a horrible habit of going strongly in one direction and then having doubts and changing my mind. The longer I practice TA the more I am aware of a bull and a bear case at every point in the market. So, for example, the FTSE is currently in a strong up trend (major trend) but the momentum indicators are screaming bearish divergence in all time frames. The Index is also up against a two times all time high resistance but the other major US indices (S & P/ DJindusrials) have long ago breached resistance. My mind says, perhaps the momentum indicators (RSI and MACD) are really warning of a change of trend but perhaps they just reached the end of their mathematical abilities to signal up and are pulling back to make room for a further advance. The more you know the less you know!

Writing TA on the TMF has taught me that most Fool readers are LTBH merchants and they are not concerned about short term swings of fortune only major turning points. They do want to know when to cover their backs or to escape to live another day. There are only two techniques that give forecasts for the main trend: P & F and Elliott theory. I practice the first and serps the second. Our forecasts are infrequent as the main markets are big and slow to reveal any change of trend. However, we post more often on the movement of the Indices in a descriptive manner. Anyone coming to the Boards will be disappointed that there is no clear "forecasting" on a daily basis. At some point, the evidence becomes overwhelming. If you do get a chance to look at the TA board before it disappears, at the last major tops you will find that the Board called it very well despite the double top in 2007 and the enormously wide topping pattern in 2000.

Right now, on P & F, I have to support the bull case as I only have upside targets. However, on bar and candle charts it can be seen as in a topping pattern with perhaps a few more squiggles up on the right hand side to come! Eventually, bothe will give a clear direction and come together so that I can make a forecast! I probably did in the case of the H&S that failed so recently. Failures like that make you super cautious! Just some Sunday morning musings.

I like the idea of a permanent FTSE index board and will set it up and maybe move this post to it (if I am able!).

OC

foxy wrote:As I use TA it is both an art and a science.

The science is the collection and interpretation of historic data.

The art is in judging the interpretation from the analysis.

This is done using established TA methodology.

Amended

This is done using established TA methodology within a stated time frame.

How about "measuring market sentiment"?

I have always thought of FA as the logical view of markets and TA as the emotional view of markets.

If you can understand both you are onto a winner

http://money.cnn.com/data/fear-and-greed/

I think it is more than measuring sentiment. The above "Fear and Greed Index" does that and I am not sute that this is a technique that appears in any TA text book.

Reading Murphy on technical versus fundamental forecasting ge writes that the "fundamentalist studies the cause of market movement whilst the technician studies the effect." Whilst there is a lot of overlap between the two approaches at key turning points "the fundamentals do not explain or support what the market seems to be doing." Some of the most dramatic bull and bear markets begin with little or no change in fundamentals. Eventually, the reasons for the change in price become known to the market. So "chart reading becomes a short-cut form of undamental analysis".

I think reading price chart has to be in there!

OC

One last attempt to reflect the views of serps, diamond and foxy!

"Reading price charts to give you direction in the markets using established TA methodology."

Please, let me know if this is acceptable and I will send it to stooz!

Oc

perfect, that'll do for me

Fully agree/support description. Thanks OC.

Jon

Done! thanks for being so organised!

Well done OC - we finally got there. What do they say about 5 different Tech-Ans having 5 different outlooks?

Excellent. Nice to see old friends again. Take care.

Thanks to everyone for contributing to the launch of this topic on Lemon Fool (TLF).

OC