Muhammad Alfatih is a professional technical analyst for more than 25 years and uses it as an investor, broker, analyst, and coach. He is VP at PT Samuel Sekuritas Indonesia. He is a co-founder of AATI (Asosiasi Analis Teknikal Indonesia) and his views are also quoted by leading newspapers, radio and televisions stations within Indonesia. He is one of the curriculum team and assessor for technical analyst profession at Capital Market Certification Agency
We all know that technical analysis is NOT about certainty, but about probability. We understand that technical analysis tools sometimes fail. We already accept this failure as part of technical analysis theory. We survive because we recognize probability and we follow good risk management. People try to increase the probability of success by improving and combining technical tools, but they never get to 100% accuracy. Sadly, even if traders enter a trade correctly, they tend to sell for a profit too soon. When a loss occurs there is a tendency not to sell, to allow the loss to grow, to hope. Losses can be significant, or even catastrophic to the trader. Lack of risk management, lack of trade disciple or lack of psychological understanding may be the cause. Sometimes, the blame is levied at technical analysis itself. To solve this problem, the ?Power of Alternation? is proposed. It is used by many traders already but it is not yet formalized or included in the curriculum of Technical Analysis education. This concept, that I call ?The Power of Alternations? uses the failure phenomenon and turns it into our advantage, then increases the probability of success trading. I hope this concept, ?The Power of Alternation?, will teach both practitioners and students of technical analysis a concept and skill that will improve significantly the probability of success and decrease any disappointment in the discipline of technical analysis.