Technical analysis is a stock and forex trader's weapon to get money (profit) from stock / currency price movements. When I started studying technical analysis, I joined the capital market forum, and I chatted with one of the admins there who was an expert in the capital market. My question:
"Sir, what is the best technical analysis?"
Why do I ask that? I'm actually frustrated. Even though I managed to predict the stock price to go up, but when I sold it, the stock price went up again much higher. Then a capital market expert answered:
"There is no benchmark to see the best technical analysis. It all depends on which one you are suitable for."
In conclusion, it means: THERE IS NO BEST TECHNICAL ANALYSIS. At that time I was annoyed with the answer from the capital market master. I was hoping to find a good technical formula, but I didn't get an answer. But, slowly I began to understand what the capital market expert said. And now I dare say that: There is no best technical analysis.
What it should be: USE TECHNICAL ANALYSIS WISE. What does it mean? read to the end ... I will give you a real case that I experienced myself and experienced by many traders in the capital market ... Hopefully useful ....
When I first learned to trade stocks, I loved to use multiple indicators. I remember that time. In my charting, I put the indicator stochastic, RSI, williams%, MACD volume, moving average and several other indicators. I thought: with the help of many indicators it will be easier to analyze.
But what happened made me even more confused. Stochastic and RSI say buy, williams% and moving average say sell. MACD volume shows selling pressure has eased, but the chart is still flat. If you were me, what would you do? You must be confused right? Should I buy or sell? In the end I can't decide to buy or sell.
Because I often read about technical analysis, and join online capital market forums, I finally understand that using too many indicators makes me confused. Finally, I reduced the indicators I used. Until I find a formula that works for me. It's not easy to find a suitable formula.. I tried many times. The point is TRIAL AND ERROR.. Try and fail, try and fail.... Keep going like that until you find the right formula.. Everything takes process and sacrifice....
After some trial and error, it turned out that the Williams% indicator didn't suit me, so I threw it out. MACD volume doesn't suit me either, I throw it away too. I personally also don't use moving averages (MA), where this MA is a very popular technical analysis. Not because MA is bad, but indeed I am not an expert in using MA in practice. If you ask me to explain in theory, it's easy. The problem is the practice in the field.
Until finally I found a suitable formula, namely studying support and resistance lines combined with candlestick patterns, trends and volume. For indicators, I only use stochastic and RSI. That's all. I feel comfortable with the technical analysis formula that I use. I always train and practice a combination of technical analysis that I use. If any of my colleagues ask, I will explain with the formula that I am used to using.
Actually the problems experienced by most traders are the same. First, traders use too many technical analysis indicators. Second, if the trader has lost because he does not understand the formula he uses, the trader does not immediately replace the formula with another technical formula. The trader is not ready to try new formulas, which might suit him better. In essence, not ready with TRIAL AND ERROR.
Well, this is what I meant in the title of my post: Use Technical Analysis Wisely. There really is no best technical analysis. You alone determine what the best technical analysis looks like, and what you use may not be suitable for others. If you haven't found the right one, you have to try, trial and error. His name is also learning, it definitely takes time and sacrifice. Here I'm not saying it's easy to you... So that you also understand that the stock business is quite complicated and what has been said that you can get returns tens of times in the short term is just nonsense.
My advice: if you've found the right technical analysis for you, don't go for technical analysis. That will confuse you even more. For example, today you use MA, tomorrow you change to RSI, the next day you change to MACD. Not forbidding you to learn new things. But if you've found the right formula for you, you have to practice it continuously until you are really good at predicting, both in bullish and bearish market conditions. If I may give an example, I'll take Bruce Lee's quote: "it's better to have one kick but practice 1000 times, than to have 1000 kicks but only trained once."
Similar to the principles of technical analysis in the stock market, it's better that you practice one technical analysis formula 1000 times, than you have 1000 analytical formulas but you only practice it once. So, use technical analysis wisely...
