Technical Analysis - Does It Really Work?

Technical Analysis - Does It Really Work?

In my opinion and most other traders’ opinion, technical trading is the best way to trade commodities. I could care less about the news most of the time! That’s a bold statement, so let me explain why I say that. By the time you read or hear the news, it’s already happened. You see, you and I are at the bottom of the news chain. If you think otherwise, I’m sorry, you’re wrong! There are a few exceptions like when the Feds raise or lower interest rates or a major crop report comes out along with a few others. I’m going to show you how to know, in advance, when the reports, come out so you can prepare for them.


To give you an example, as I was writing this, the price of gold rallied because the stock market was dropping and people were getting out of stocks and using some of that money to buy Gold. There were people who knew this was going to happen beforehand. These people took advantage of this information and bought Gold (went long) because they knew that when the stock markets go down, Gold usually goes up. So, by the time you hear about it on the news, it’s too late to do much about it. However, if you had been watching the charts, you would have seen the price of Gold start going up and could have made a trading decision, based on technical rather than fundamental information.


Below is the current daily price of Gold. As you can see this move only took two months to rally almost $8,000. You would have been very happy if you had bought Gold two months Back when the rally started.

Also, fundamental traders have to be aware of the weather patterns around the world and how they might affect production. They also have to be aware of world “inventory,” and who’s dumping product on the market, etc, or how much of a commodity is available or if there may be a shortage because of bad weather or an oversupply anticipated because of farmers having a good crop that year. It would be a full-time job just to keep up with one commodity, much less with dozens that you might want to keep an eye on.


There are times, however, when certain fundamental information can be incorporated into your trading. The study of seasonal patterns is one thing that is not difficult to learn and can prove helpful at times. I have included a Chapter on “Seasonals” in the course also.


Now, on the other hand, we have technical analysis. I love charts! I feel they tell you almost everything you need, once you understand how to read them.


You’re going to learn a lot about technical trading in this course, and I hope you can master it. It’s not rocket science, it’s an art and it’s not as complicated as you might think.


If you are new to trading just remember that every other trader was also new at some point in their life. Also after 20+ years of trading, I still try to learn new things that can improve my results.