Using only PSY will make you CRY
If you used PSY on these stocks, without considering the macroeconomic factors and fundemental analysis, you would have CRY.
Firstly, I'm not a big fan of technical indicators, because human are creatures that will try to create pattern out of everything. That's just how our brain works, it create mental shortcuts using pattern recognition so as to work less. Yes, that is how amazing our brains are, always trying to be lazy, because using the brain consumes tons of energy.
But since this is a Technical Analysis challenge, I will try to apply what I learnt. I tried it on stocks that I believed it will fail, so that I can learn how not to use PSY. Because learning is not just about how to use the tools, but also about how not to use the tool![]()
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wise words I hope ![]()
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Firstly, I'm not a big fan of technical indicators, because human are creatures that will try to create pattern out of everything. That's just how our brain works, it create mental shortcuts using pattern recognition so as to work less. Yes, that is how amazing our brains are, always trying to be lazy, because using the brain consumes tons of energy.
But since this is a Technical Analysis challenge, I will try to apply what I learnt. I tried it on stocks that I believed it will fail, so that I can learn how not to use PSY. Because learning is not just about how to use the tools, but also about how not to use the tool
I believe that PSY will fail on stocks that have a greater macroeconomic overhang such as China and delisting. I also believe it will fail on overhyped stocks that is greatly overvalued. So I tested on 3 stocks, that I have position in.
firstly, $DiDi Global (Delisted)(DIDI.US$. We all know that it angered the Chinese government, and it is even getting delisted now. Had we used PSY without considering the geopolitical factors, we will have cried. Lesson learnt, don't use PSY without considering the geopolitical factors.
firstly, $DiDi Global (Delisted)(DIDI.US$. We all know that it angered the Chinese government, and it is even getting delisted now. Had we used PSY without considering the geopolitical factors, we will have cried. Lesson learnt, don't use PSY without considering the geopolitical factors.
Next I tested it on a meme stock $ContextLogic(WISH.US$. It had IPO during the greatest bull market ever, accompanied with the meme stock rally. Had we used PSY on it, we would have cried big time. Lesson learnt, don't use PSY on meme stocks.
I bought WISH at $2 and sold tons of covered calls on it, so please don't hate me for calling it a meme stock![]()
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I bought WISH at $2 and sold tons of covered calls on it, so please don't hate me for calling it a meme stock
Lastly it is $Grab Holdings(GRAB.US$, a stock that IPO using a SPAC during the craziest bull market ever. Had we use PSY on it, we will have cried a river. Lesson learnt, avoid using PSY on stocks that is born out of SPAC and have negative earnings.
But I believe in GRAB and find that it is a great bargain price now![]()
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But I believe in GRAB and find that it is a great bargain price now
So will I ever use PSY or TA in my investing journey? Nah I don't think so, I'm good with fundemental analysis and options strategies ![]()
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cheez_lit : Just came across this work. Your teaching and explanations are extraordinary. Thank you!!!!
doctorpot1OP cheez_lit: Glad it helps
I will post more along the way and hope it will help more people 
whqqq : please accept my heartfelt thanks, it really help me a lot.
doctorpot1OP whqqq: glad that it helps you
