Do we want technical analysis questions?

Question

This question just appeared by a newcomer to Money SE (I think he is active in the SE network already though): https://money.stackexchange.com/questions/18966/stock-analysis-which-time-range-to-focus-on

It is problematic as a question because it is

1. very broad in scope
2. asking about day trading and
3. overall, looking for help on so-called technical analysis, based on the tags.

What is the best course of action here i.e. without discouraging a new user, despite what looks to me like a difficult question to rephrase for our site?

Answer 1

There is no reason to disallow questions on technical analysis. It is certainly within scope for an individual, non-professional investor.

Whatever opinions we have on its utility, efficacy or what-have-you have no bearing on this discussion.

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As I recall, we've discussed the basic principle that if an individual investor can do it, they should be able to ask about it here.

I think that they should be able to ask some basic questions about any financial product/topic, regardless of scope. At the very least, asking for a definition shouldn't be an issue. They may very well see enticements for such financial products and wonder if they are appropriate for their goals. If said product is out-of-scope for personal finance, we can close, but keep some of those questions around to answer future questions and to demonstrate why we believe they are off-topic; since answers should have some discussion as to why they are not appropriate for personal finance.

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Regarding this question, its real problem is naïveté.

The question isn't very broad. It's asking for the time ranges involved:

day trading: generally, within 1 day
swing trading: 1-4 days
position trading: 1 week - 1 month

Again, the problems is naïveté. Much more discussion is required to do justice to the topic. However, answering the question asked is a simple matter.

Answer 2

Hmmm, the struggle I have isn't with day trading or advanced techniques, per se, it's my compulsion to want to talk the OP (of that day trading timing question) out of the idea. The resulting comment or answer wouldn't address his question directly, but might save the OP some money long term. I think I'm on the same page as George on this issue.

Answer 3

I am reminded of the fact that a major stock information product used to be carefully advertised as "The Information You Want!". They couldn't legally claim it would do the stock trader any good at all, but since people who bought it by definition wanted it that was legally safe.

While I too think that in most cases the real answer is to talk these folks out of it, I've resigned myself to the fact that this is essentially a matter of faith... and I try to restrain myself to pointing out that not everyone shares those beliefs. If someone else wants to explain why quants are their personal savior (or is that investorior?), I don't think I can object -- among other things, the better we all understand this, the easier it will be to point out the assumptions and why they may not be valid.

Answer 4

I was about to ask a similar question related to this post in the main site here: https://money.stackexchange.com/q/69388/44232, and saw this old Meta Q which could be revived for the same discussion.

I agree with George and Joe that allowing the questions to be asked makes it possible to advise the poster about the dangers of a naive strategy. However, I think the inclination with some of these questions is for answerers to provide (incredibly subjective) opinions which run the risk of being seen as fact by the OP or a passer-by. An answer cannot be deleted for inaccuracy (only downvoted, which is less permanent and can be more easily compensated by upvotes). So perhaps deleting the question for requesting opinionated answers is the more tenable solution?

I simply don't see a way that such questions can be answered in a non-opinionated way, without writing textbooks worth of material. It seems to me that these questions would necessarily be too broad and too opinionated. Maybe a middle ground would be taking a solid answer which outlines the risk of such analysis, and consistently using it as a duplicate to redirect these questions towards?

Answer 5

The OP has gone, but looking at the 3 reasons for rejecting it posted originally.

1. too broad - valid to reject
2. asking about day trading - not valid to reject and
3. overall, looking for help on so-called technical analysis, based on the tags - also not valid to reject

I asked this question on stock market investing splitting from Money SE a while ago receiving a number of fairly robust answers, which suggested to me that day trading and TA are acceptable in Money.SE.

Personally, I'm not a fan of day trading due to the intense time pressure, but have friends who have made a lot of money from it. The technical analysis techniques being reasonable to apply, but the psychology of the mind being the hardest aspect to overcome, which is actually the thing that beats most people in stock market trading (as opposed to passive investing in the stock market)

Answer 6

I think such questions are more apt on quant.se ...