Topic: How To Invest

What is Pat’s commentary for the week of December 17, 2013?

Article Excerpt

Many successful investors find that technical analysis or chart reading can be a help in making investment decisions. However, these investors understand that technical analysis only works as an aid to investing—not a standalone guide. Unsuccessful investors often make the mistake of relying on technical analysis alone. This, though, can pay off for short periods. It can lead you to make a series of successful trades (although these trades may only generate modest gains). When technical analysis fails you, however, the cost can be catastrophic. It can lead you to sell or go short in stocks that are about to reverse a falling pattern and shoot up. It can lead you to buy stocks with a rising pattern that are about to reverse course and collapse. When technical analysis works for you, it mainly does so by confirming decisions and conclusions that you arrived at by analyzing all information you have available, not just the chart pattern or trading data. Many of…