I am a good analyzer but i am not a good guesser!, when we say this "i do technical analysis on stocks n commodities" it means i use computer,software,internet and stock n commodities data which is processed in the charts and then using the rules and chart patterns plus the indicators we come to the conclusion that stock market or a particular stock is heading towards a particular target,this method fails when market moves in a small range and doesnt follows the market mechanics, i.e. the stock/index moves in a direction in a few minutes then all of a sudden reverses its trend showing indecision among the traders.
The similar pattern is seen in daily charts as well. Now if some kid is told to sell a stock if touches a high and buy if it touches a low, then he would make money in such a small range choppy mkt, but an expert in technical analysis who beleives in trading in a trend will 101% lose money, as what he has learned and practised since 5-10yrs of his career, everything goes opposite to what he is doing, this happens with Mutual Fund managers and also with Forex/bullion traders.
Losses are a part of technical analysis, but technical analysis is a form of analysis to reduce losses and maximize profits, but in a rangebound- sideways market, flukes work best, and i encourage people to do that, who are restless and want to trade everyday, even when there is no trend, like in this month, which has been basically a trendless month.
In such a market options come very handy, and using different strategies to counter the sideways market.
Coming to the point, stay away from stocks till a trend emerges, or trade in options only if you know what are options!
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