Why Is It So Hard

I had been toying with the idea of binning my LinkedIn profile since it seems to consist of little more than people with odd titles posting random motivational pictures and the occasional bit of crap about their cat. But it does seem to be the gift that keeps on giving in terms of the nonsense and second rate advice on investing/trading that is pumped out by its users. Part of this bounty appears below – this purports to be technical analysis relating to the Canadian stock Equitable Group (EQB:TO)

There are a few issues with this. This sort of nonsense gives TA a bad name and does drift it towards the occult. It is no wonder that people outside the field who see this sort of thing instantly yell bullshit. I would too if shown this as a mechanism for entering trades. In looking at the trajectory of price guess what is the most important thing is if you said price give yourself a pay rise and take the rest of the week off. Charts like the one above do all they can to obscure price, each indicator is an iteration of price and each time you contort price with an indicator you remove its fidelity and substitute it with a series of opaque filters through which price is viewed. Instead of seeing through a clean lens you are now looking through the bottom of a dirty glass. This form of TA is little more trading via beer goggles. This is the functional equivalent of fundamental analysis in that it too sets out to create a narrative where none is needed. So instead of talking about earnings, growth projections and dividends the technical analyst gibbers on about whatever magic piece of rubbish they downloaded from the internet or thought up whilst over-tightening their man bun.

True price analysis is built on a cornerstone of two simple components – is it trending up over the time frame you are trading and does this trend have widespread support in terms of volume? Simple. Everything else is bollocks all you are attempting to do is to let the market tell you who at this very moment is in charge and even that is debatable given that we are never looking at the present. You are in no way predicting the future despite what the people who believe in sunspots and astrology will attempt to tell you. More lines does not make for a prediction they simply make for a dog’s breakfast.

This raises the question of what my view of this stock is and how would I look at its price action. Price has made a new high and has done so on a lift in volume…..next.