Quote:
Originally Posted by strykn  ^ gonna have to disagree on charts > news.... |
i should explain...
example:
corn... base is building, lows are getting higher, highs are getting higher, and this happens over the course of weeks... a marginally bullish sideways movement.
it breaks an important resistance. news comes out, drought scare.
over the course of next few weeks, drought confirm, and prices keep going up.
now...
the reality is, those big institutions employ people to go out to the farmer fields and check the crop out, they have all these instruments to predict other things, that YOU do NOT have.
it's information that ... isnt very public. the big institutions move the markets and create these bases. the "smart" money.
yet on the charts for us normal people, all you see is a bottom building, and lows getting higher. it breaks, and you read the news AFTER.
but the charts always move before you know the reason.
now of course the reason for the rise in prices IS fundamental.
but the fundamental information is not available to the public till it's in the news, and by then, the charts would have gave u a clear signal way earlier than the news would have.
now this is for commodities, but you can imagine the same for stocks, for something traded a lot. lots of volume.
hindsight you can see the smart money moving the market, before anyone knows the news.
sure, like i said, fundamentals are the "true" objective reason the market is moving. but the true objective reason isn't known to you. its only known to a handful of people. if you're a chart reader, you can "read" the news through the charts. you can see movements that don't make sense or you can see ppl dumping shares or buying up shares.
that's why i say fundamentals follow technicals. the chart tells you before the news tells you. unless of course you've got inside info.
take for instance... tomorrows announcement at 530am pst
nonfarm payroll expected 125k, down from 163k prior month.
now, i don't even need to see the news. as long as im watching the charts, i can see which direction it's going. by the time you hear it, and you enter your order, it's too late.
think of it like a zombie apocalypse...
are you gonna run when you see a mass of people running, or will you stand there and wait for the news.
it always starts with the first guy running... then more.. then more.. then more... then the news comes out and EVERYONE RUNS.
whos gonna get eaten? the people that ran last...
it's up to you when you're gonna start running (watching the charts, how early you want to jump in). do you trust that first runner? or is he just mad? what if there's 50 people running? 100?
the people running (charts moving), are gonna tell you something, regardless what the news is, you know SOMETHING is happening... that's all u gotta know. cuz you're just trying to run with the people, zombies or no zombies.
once you run, and you hear the news later, you can adjust your strategy if the fundamentals match or make sense. just another "indicator".
the truth is always in the technicals. because fundamentals don't make sense 110% of the time. if thats the case, then that means fundamentals are not always right.
but technicals are burned in history. the charts don't lie. the number is there for a reason. you don't always KNOW the reason, but if the chart says that, then that's what it is.
e=mc^2 regardless of whether you know the fundamentals of physics or not. the equation works... kinda get my drift?
of course if you're a very long term trader, getting the best price entry probably doesn't matter as much. but if you could get in at the best price possible, it would be nice wouldnt it?
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. For those that also own, what are your plans?
