During the trading day we hear many pundits, experts, hedge fund managers, and others spouting off their opinions about markets, explains Bob Lang of Explosive Options.
Sometimes they are helpful but most times they are not. In the media, it's often some free advertising for the manager and his/her firm to attract some interest of the viewer (or assets).
But what we often find in these prognostication moments are guesses about how a stock or a market is going to behave. If I had a dollar for every guess that I heard on TV, I'd have millions of dollars. In the main, these guessers claim to have "special" information only they possess. This "knowledge" (they claim) is a lock to win, but there is often no time frame. "Apple is going to rise, we have seen it happen before."
Okay, that's nice information but there is no timeframe to go with it. How do I know if Apple won't go down first? (There is an old economic "saw" that goes like this: give 'em a number or give 'em a date, but don't give 'em both).
The desire to be right with a prediction or guess is strong for those who have little accountability or responsibility. This is more about entertainment than really trying to make you money. And isn't that the goal here? I mean, we can make great calls all day long but if we don't have risk capital working then who really cares?
The best place to start is to turn off the tube and the media and get down to business reading the market. The charts/technicals give you a great view of history. There is nothing wrong with getting an opinion but using it with your own capital at risk should take a more rigorous approach.
As mentioned, the charts/technicals won't lie to you—it's real history. Since behavior rarely changes, we can use the technical tools to identify, which patterns repeat and can potentially make money for us.
Learn more about Bob Lang at ExplosiveOptions.net.
