Throughout the seventies and eighties I endeavoured to use Technical Analysis, (TA) as a method of stock market prediction and spent large sums of money, well large for me at the time, on employing a team of individuals to help me find a way to time the markets. The highlight came when a fund manager from Fidelity arrived to tell us about a brilliant concept that they had launched. He was perplexed and left when we told him it wouldn’t work. After all who were we to argue with the philosophy, wealth and might of Fidelity- after a while the fund was closed—now that story was really about derivatives rather than TA but I thought it helped to make a point and the point is everything works until it doesn’t.
Obviously there are elements of TA that can be useful predictors, but I have found that you have just as much chance of getting it right using a simple channel system, two lines sell at the top buy at the bottom, bingo. Doesn’t work every time sometimes it falls through the bottom and sometimes it goes through or tracks the top, but what the hell, if you are going to entrust your hard earned money to theory, why not a simple one? Between Stockopedia and Sharepad we now have more than enough information about individual investment opportunities to help us make money providing we can ride out the bears.
Problem is I can’t do that. I can’t bring myself to see gains disappear---- just in case this is the time the market turns for good or my portfolio turns out to be riddled with expensive rubbish when previous careful analysis proved to me it was nuggets of quality. Everything has its day, dare I mention Toshiba or the many more that have gone before.
In 1972 I was introduced to an investment tool that never left me, it didn’t work, but I never stopped using it, because it did work in hindsight, and many other Technical Analysts still swear by it. We had graph paper stuck to walls around the building tracing the FT 30 followed by FTSE and now I would be using the FTSE 250. No computers Steve and Bill were still in school. We got some major calls right but too few to keep employing the team, so we went…

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