Yesterday I had been to my friend’s place and he was busy in going through a sheen of papers with technical charts and graphs indicating the buy and sell points and so on.
I asked him what are all these papers and he replied that it enables him to design his trading plans and take investment and trading positions accordingly. I requested him to recommend me one such indicator that I could follow, understand and implement them practically in my investment decisions
He said I should follow what is called 200 days moving average price of a share.
He showed me number of books and write ups on the subject to convince me to follow it religiously whenever I trade in the market. I wondered many times why I should follow 200 DMA and why not 250 or 300 day moving averages. What is so holy about 200 days moving averages? And what is so unholy about more than or less than 200DMAs ?
I quizzed to my self that if 200DMA is a wonder key to make money in the stock market then why investors are sitting with huge losses? Turn the pages of stock market history you will know the fate of many 200DMAs.
These numbers never gave me any advantage at the ground level trading.
After seeing the plight of poor investors who lost tons of their savings in stock market I do not want to see the ugly black magic face of the technical charts
Any overload of information makes you inactive and confusing. Too much of information (rumor) based stock market investment is not an exception