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  • IFTA Speaker
  • AATI Member

Muhammad Alfatih, CSA, CTA, CFTe, is the Senior Technical Portfolio Advisor at PT Samuel Sekuritas Indonesia –
Muhammad has been using technical analysis for more than 20 years as an investor, broker, analyst and instructor. As a professional technical analyst, he has been working in securities companies with significant exposure to retail investors, institutional investors as well as high net-worth investors.
As an instructor, Muhammad has been invited as a guest lecturer in distinguished post-graduate business schools, respected education institutions, pension funds and corporate secretary association as well as investor clubs. His views are also quoted by leading newspapers, and also radio and televisions stations within Indonesia. He the Acting Secretary now and is one of the founders of AATI (Asosiasi Analis Teknikal Indonesia) in 2000.

The Power of Alterations

Posted: 23 October, 2016 Subjects: Psychology
Source: C2016 IFTA Available to: Delegates 2016

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.