How reliable is technical analysis? I bought again… So after booking some loss (what else!) from Hexo, I decided to get back into BTO because I can't seem to sit still with the extra cash I have. I only bought 20,000 shares @5.76. The amazing thing is that it seems to keep falling immediately after I bought. I just had a look at the stock and I'm down $2,000. I believe the price I bought my shares at was fair, so I'm not bothered by this paper loss.
But I'm very determined to stop being dumb and seriously start considering learning about technical analysis. I might be in serious trouble if I don't. I'm looking at a few thousand loss, or even tens of thousands as something very trifling when there were times in my life, a $10 could mean being able to eat for the whole week.
When I started investing, I followed Mr. Buffett's adage, which says that indexed funds beat actively managed funds 95% of the time. Whenever I had money, I just bought some more units and forget about them. They have done amazingly well. If I want indivisible stocks, I go for the blue chips. They pay generous dividends and the dividend growth more than offsets the rate of increase of inflation.
Mr. Buffett is not an advocate of TA. He said it's akin to looking at last week's weather to forecast the weather for tomorrow. Now that I've seen how helpful TA can assist a trader in making important decisions on buying and selling a stock, I think Mr. Buffett was not fair to have totally dismissed the power of this investing tool.
Do you use TA and how much do you Rey on it when making your decision? I've subscribed to a trading channel so hopefully they'll be able to walk me through all the necessary steps. What takes an intelligent person one month to learn will probably take me ten years, but I have to start somewhere.
Your advice is greatly appreciated.