Forum Archive Index - July 2001

["G Stolwyk" <stolwyk@wave.co.nz>]

 

I would say that most of the TA people will be traders. I have looked at MMD posts at OZestock and found that the same traders ( I am excluding brokers ), followed some 2-5 stocks on a day!

 

They need more stocks as some are " dormant " or the risk of trading in a particular stock, is too high. 

 

They are constantly in touch with each other and as soon as there is a play in progress, the nattering increases and they swoop down on a potential feast.

 

And they don't need to take an overly high risk by following one stock, all they need to do is to trade where - in their opinion - the risk is least!

 

And that would be on an open stock like MMD which seems to be in the uptrend. It often falls a few cents in the morning.

 

Many are concerned with these few cents! Even if they bought too high, they tend to profit as the price keeps firming . However, if there is a sudden large fall, then, they would be exposed if they held!

 

A 60% chance of winning, if based on approximately the same input each time, can be good if it is repeated many times. I think he will be a good estimator of risk to be able to do that!   

 

Many employ the latest software and trade for a living. Theoretically, if they all employed the same and only method, you would tend to see the same action within a few minutes and this would accelerate as the slower traders caught on.

 

This in turn, can change markets and result in " dumps " or corresponding sudden increases in demand.

 

The brokers in turn will do business for their clients or for themselves: they don't pay brokerage fees and can afford to turn over the shares for the smaller fixed overheads. Their companies use Charts as well. 

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I found it all very interesting although I am a long term holder. Readers will know that I have approached Peter Maiden for charts from time to time and he has explained the testing- or " support " levels.

 

Although I am not interested in trading, I am aware that the Charts express the behaviour, be it fear or greed of participants.

 

I have always welcomed TA to this site for three reasons:

 

1. I don' t own this site and hence everybody is entitled to discuss investment in stocks whether held temporarily or on a longer term basis.

 

2. The demise of the Dotcom. sector has " wiped " out a lot of hither to, active posters.

 

As the NZ market shrinks, there will be fewer still, talking about fewer remaining shares.( Fortunately, increasing investment overseas, results in more posts and this will take up some of the slack! )

 

Another reason why I like to see more posts from TA people.

 

3. I find that many are competent and intelligent people. They would not last long as traders, otherwise! They enrich this Forum!

 

And if they explain Charts on this Forum to anybody who want to look at these, I can't see a problem. I noticed that some of the questions were designed to " trap " someone and I am not in favour of that.

 

Phaedrus is doing one more post to complete the " LEARNING TO INVEST " series, and I shall treat it with the same respect as I  accord Peter Maiden's coming post!

 

Gerry