Why Is Advice from Someone Who Doesn’t Know Technical Analysis a Disaster? 👇


Trying to give stock recommendations or manage a portfolio without knowing technical analysis is no different than trying to cross an ocean with an airplane whose instrument panel is broken and has no navigation. No matter how strong the plane’s engine is, if you can’t see the direction of the wind and the storms, crashing is only a matter of time.
Fundamental Analysis Tells You "What" to Buy, Technical Analysis Tells You "When" to Buy
You may find a company with great financial statements that is at the center of a structural transformation (for example, one carrying out massive infrastructure or electrification projects). But if that company’s stock is already in an overbought region or institutional funds have entered a distribution phase, buying that stock at the top becomes a disaster for the portfolio. Technical analysis protects capital by identifying the correct entry and exit points.
Risk Management Is Hidden in the Lines
The first rule of building a professional portfolio is not making money, but protecting money. Someone who does not know technical analysis cannot know where a trade is wrong. It is a great irresponsibility for someone who does not know below which level the thesis is invalidated and where a stop loss should be made to direct other people’s capital. Amateur memorized habits like “average down as it falls” drag the investor into a swamp when they are done without observing technical levels.
Price Contains All the Information
We see a company’s internal dynamics, macroeconomic developments, or geopolitical risks instantly in price movements and volume bars. We can confirm the footprints of institutional money (Smart Money), dark pool flows, or squeezes in the options market (Gamma) by reading the structures on the chart. Someone without technical analysis literacy completely misses what the market is actually pricing.
Is Technical Analysis Alone Enough?
A perfect portfolio is not built just by drawing a few lines and looking at indicators either. A solid investment strategy is a multi legged table that brings together:
Macro vision
Fundamental Analysis
And Technical Analysis
In summary; trusting the guidance of someone who cannot read the language of financial markets namely price movements and trends is flying blind. This heavy responsibility is a burden only those who know where to limit risk can carry.
The reason the view of technical analysis is negative is actually because of the people who think they know technical analysis
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This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
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