Forum Archive Index - July 2001

["Stephen Lukey" <slukey@paradise.net.nz>]

Hi All

 

My 2 cents worth on this charting thing. Unless I have totally misunderstood the broad theory of charting, one looks to sell when an uptrend has ended or buy when a downtrend has ended. This seems to imply that one would be buying or selling a few cents off the relevant peak or trough. When you combine this "sacrifice", for want of a better word, with brokerage, the chartist needs to be right better than 50% of the time or else he is merely the brokers friend.

 

I agree with Snoopy that others issues about charting are the constant monitoring required and the tax risk you run if you are trading and not treating your gains and losses correctly.

 

When I go for a walk in the country, I might not see the wood for the trees but at least I don't see uptrends and downtrends in the contours of the hills. To me, this charting thing looks like it would be all too stressfull!

 

Given the above factors, my opinion is that charting combined with trading is only suitable for those willing to devote a lot of time and (nervous) energy, and who are prepared to put up with the mundane record keeping that the Tax Department requires. This makes it most unsuitable for "newbies" to the share game.

 

So it is boring old buy and hold for me, although next time I choose a share I may consider looking at the various moving averages to time my purchase.

 

Steve