Ok Coming to @India_Progress rant against Technical Analysis - well to begin with there is nothing Technical about Technical Analysis. There are two aspects of trading/investing:
1. The underlying Business
2. Buying and Selling of Business that happens in market
1. The underlying Business
2. Buying and Selling of Business that happens in market
It is the job of investing community to determine the price of Business based on hazaar things from cost of money to the cash flow business generates to how much potential business has. It's a guess work all the time when people decide what price to pay for the business
IBM can pay you 4% dividend yield and trade at PE of 10 but nobody will buy in prevailing environment when they can buy Amazon at PE of 200 :)) so to say that there is some perfect way to value business is NON SENSE
There are two kinds of investors in the market: Elephant [Big money managers] and then JUNTA. It is the Big money managers that set the prices based on the belief they hold. It's always a herd mentality. They have resources to do all the research and get insight
Lots of times things are so complicated with so many moving parts that ordinary people cannot even comprehend what's going on because Prices move so quickly. Reading Price Action comes in handy now becoz it gives you insight into big money thinking
I have not seen anything so powerful than when you combine Price Action with big macro stuff because it positions you in a trade much in advance and let you ride big gains.
Valuing Business is not a static exercise especially in the world of constant innovation. Even super smart people cannot do that and when you manage someone's else money, you are more penalized for being wrong than right. Reason: Price action works more becoz that's how it moves
