Why I use TA instead of FA?
Well, when I first started investing, actually I tried to use FA. First I rely on the FA reports from brokerage houses, then I tried doing it myself. Bought books on how to do that. But the problem is:
- I have limited time, can you do an analysis on 1300 counters in BM?
- One cannot rely doing FA from the desk only (i.e. read yearly account statement), you need to talk to the management, competitors etc. Will the management entertain an unknown?
- Accounting is not my field of expertise. I thought it was debit/credit (as I learned in my Perdagangan class in Form 1-3). But things can get really creative!
- Brokerage houses have access to the management, but they do not always report it objectively. They tend to give a more rosy picture for everything (i.e buys vs sells are a ratio of multiple times).
- I'm only limited to Malaysian market.
- There is no silver bullet. Don't rely only on one indicator. You need to combine them.
- Use simple indicators because everything are derived from price and volume.
- Don't be short sighted, always look at the bigger picture no matter which time frame you are trading in.
- Interpretation is an art, you need experience for that. So don't expect quick result in the early stages.
- Your trading is not only limited to Malaysia, humans behave the same all around the world, so your TA technique works in every market.
- You can trade stock, commodity and currency using TA.
- Saves you time as TA programs can scan through everything in a few minutes.