Interpretation of Indicators
I make use of the Overall Conclusion under the Interpretation of Indicators to validate my technical analysis, as a sanity check to ensure consistency, and to watch out for any early market signal of oversold or overbought situation. For example, I would avoid rushing into buying shares which are overbought, as there is a higher probability that I may be the last person holding the ball when the music suddenly ends. Having said that, an oversold counter may continue its bearish trend, as the stock market can remain irrational longer than one can remain solvent. Hence, it is important not to solely rely on the Overall Conclusion and Interpretation of Indicators for our trading decisions, and ignore the performance of other due diligence including fundamental analysis of the companies and their news, as the technical tools are meant to complement rather than substitute our fundamental analysis.
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tallordernakedshorts : thanks dad
Business Investor : You forgot the part about buying low and selling high.