58

It's worth noting that Warren Buffet is a value investor, not a trader. As such, it doesn't tell you much about technical analysis or trend following. Instead, he's implying that when the market gets overly excited (overvalued) or panics (undervalued), there are opportunities for long-term profits, assuming you do your due diligence and have an opinion of ...


10

I believe you are confused by the vague language. Trading is a process where smart money and institutions take money from the public. Consider the concept of "market cycle". Institutions start a trend, buying in at the bottom, and only then it gets the public's attention and they start buying in higher, chasing the price. When the public is at peak ...


5

Not at all. The time period where everyone is selling a stock and when everyone is buying a stock may be years apart. The exact dynamics of what's happening precisely when you buy and precisely when you sell won't significantly affect the profit or loss you take on a trade. What will, however, is whether you bought or traded the right stock, and that's what ...


4

An uptrend-line, by definition, needs to touch a minimum of 2 low points but the more low points it touches the higher the confirmation of the trend. Note that many times you might get the low of the day crossing below the trend-line but it then closes back above the trend-line - this would not be considered a break of the trend-line as it needs to close ...


3

An investor with a long term outlook who believes his fundamental analysis is correct will systematically dollar cost average because at the onset, he has 30-40 years until retirement. In addition, his skillset tends not to include trading ablilty. Averaging down is not a professional trader's modus operandi. Breakevenitis is a bad habit. It not only ...


3

"if you keep doubling-down on positions that are losing, eventually you'll blow all of your money on something that never recovers" I partially disagree. If a big company, one that is not in trouble, reduces 50% in value for no apparent reason at all, it's may be time to buy. Just don't completely forget diversification. Usually, such reductions of value ...


2

A Dead Cat Bounce is a short recovery following a long decline, typically followed by another long decline. So without a longer history to see if there was a long decline before, there's no way to know if this resembles that indicator. Even then, it doesn't necessarily mean that the stock will continue to fall - the stock could have met some resistance and ...


1

The recent discrepancy between A/D and OBV comes mainly from a couple of green candles with long upper wicks (the 3rd and 9th from the last on the chart). These had relatively high volume, which was counted negatively by A/D because the close was in the lower part of the range, but was counted positively by OBV because the close was higher than the previous ...


1

Like others have said, Warren is a value investor. He is not really interested in technical analysis or trend spotting. He buys a company that he has determined is undervalued, and waits for it to be overvalued. He has a quick way of checking the fundamentals and presumably puts the company through a model that in a few minutes, will tell him whether the ...


1

Investors and traders have different perspectives on markets. If a security's price falls further from an initial buy, a trader may have a stop loss or just sell because the trend is downward, while a long-term investor would view that price fall as a buying opportunity. A value investor's time frame is typically much longer than a trader's time frame (...


1

The theory couldn't be more straightforward. You sell when you find better things to do with your money. Either sitting on your current account or other investments. It follows that that's the same reason to buy, ie because your money will be more productive allocated in an investment. In the meantime -most of the time- the investment is left alone either ...


1

The Signal line and the Moving Average Convergence Divergence (MACD) are technical indicators used by capital market and currency traders for making investment decisions. Like all technical indicators, these lines are constructed statistically using historical price and volume data. The MACD and the Signal line are used together in a popular strategy ...


1

One could use technical indicators in any number of ways...they aren't rigidly defined for use in any particular way. If they were, only computers would use them. Having said that, moving averages are frequently used by people operating on the assumption that short-term price movements will soon be reverted back to a longer-term mean. So if the price ...


1

Moving Average is mere average line based on historical period; broadly use to view the trend. But it has no relation to price action in due future course. If price is going below 20 SMA then in near future even the SMA will start directing toward south. In your case if price has fallen below all the short period average lines and long period average line ...


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