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Ahh, you can't have it both ways. Does a simple trend line, e.g. 12 month moving average, suffice to tell you to get in or out of a stock ("the bear market that
by pinky1417 11y ago
Ahh, you can't have it both ways. Does a simple trend line, e.g. 12 month moving average, suffice to tell you to get in or out of a stock ("the bear market that ended in 2009 was easily identified by the breaking of trend lines")? Or does it have to be the right trend line? Moreover, how do I know what trend line to choose? I can choose great trend lines with the benefit of hindsight.
Also, forgetusername's point on false positives remains critical. Breaking trend lines is only a useful if it's right most of the time.
My advice to anyone who wants to be an enterprising investor (i.e. put more time into investing and try to achieve higher returns) is to read Ben Graham's The Intelligent Investor. Instead of trading based on the emotions in the market, invest by choosing great companies that are bargains.
- 7Figures2Commas 11y agoA moving average is not a trend line. It's difficult to have a meaningful discussion if we are talking about two different things. As for false positives, nobody reasonable will tell you that they don't exist. But again, there's a difference between short, intermediate and long-term trend lines. Even under the most unfavorable scenarios, anybody with a modicum of knowledge of trend lines would have been out of the market before the 2008 crash and back in the market by early 2010 because major trend lines were broken. Incidentally, I was one of those people. As for your advice: there's nothing wrong with fundamental analysis. Although many people fail to make money using it (just like technical analysis), it's worth noting that quite a few savvy professionals use fundamental and technical analysis together.