The Lesson: Avoid Noise and Ride the Trend. Stop Believing in Technical Jargon
I have never understood the phrase: overbought/oversold.
Most useless indicator in the market
— Deepak Singh (@smarket) June 1, 2016
Now let us look at the Nifty Chart -
Wow...You see why I say overbought/oversold is such a useless indicator.
There is nothing called "Overdone" and "Oversold" in stock market. It's a non nonsensical concept.
— Deepak Singh (@smarket) June 24, 2013
This is in Feb this year - I said the same thing when Nifty was at 8900.
— Deepak Singh (@smarket) February 26, 2017
Nifty has rallied another 1000 points
What's the Issue?
Wow...We assume that there is some magic formula that can help me know where the top is. People write algorithms, do some magic with numbers and think they know. They don't realize there is no software that can code human greed. The market is traded by human beings and best way to approach it is think like human being. Watch it for what it is: Focus on what the market is doing right now and not what it should be doing
All the indicators and oscillatores are developed to push people towards doing stupid things...thinking they know in advance what market will be doing which makes no sense.
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers