I think there is a tendency to try to find logical number rules, in various forms. It gives the illusion of control, yet is always followed by a OMO. TA is a tool. Works well mostly. Why? Cause it shows in graph form the psychology of buyers and sellers. But it is actually the psychology of buyers and sellers which moves the price. TA is merely an attempt to read the psychology. I think John is right, as a generalisation, to give his tip. What underlies it is simple. If you thought the market would do x because of abc, and it doesn't do what you expected, get out ASAP. Once you read a lot, and trade a lot, you realise the psychology is key, and that TA helps, but that there is a distance between TA and the psychology. It is in the end a 'feel' for the market. This crops up in many books and websites. Why is Simons' oft read book called 'Trading in the Zone'. Why does he choose that title? WE like to think we are clever, and can make logical calls, but really it is about a 'feel' which is honed, with the help of indicators which, at a distance and very loosely, track the psychology. A last 'tip'. One has to remember it is largely the American psychology which drives things.
