Paul-
<what was specious about my argument? I said, and I will say again, there is not a single statistically significant study demonstrating the efficacy of TA. All of the evidence in favor of TA is anecdotal, and not amenable to any kind of rigorous analysis>
I respectfully refer you to MARKET WIZARDS:Interviews with Top Traders by Jack Schwager. It is not a book on technical analysis, but rather on "greatness" and you may surprisingly find that the TRADERS who are the BEST of the BEST, creme de la creme, frequently rely on technical analysis as an important tool in their trading arsenal. Consequently, your argument is "deceptive" or "specious" because it is well-written, seemingly credible, yet implies that TA is not valid when in fact that is what the best use.
Furthermore, dismissing the impressive results of a great trader (or traders) as "anecdoctal" or "remarkable" is self-serving and logically irrational. If one, only ONE, trader produces year over year results that are statistically superior to the S&P 500 average, and he/she maintains that technical analysis has played a vital role in this achievement, then the technique warrants further attention. However, this is not the case, little developing trader Jason on Silicon Investor is NOT the only ONE producing tremendous returns due to TA. In fact, more thorough research (please read book above -or many others in bookstore) will reveal that most, if not all, outstanding TRADERS rely substantially on forms of technical analysis and their returns speak incontrovertibly to its validity. Furthermore, many of the traders in the MARKET WIZARDS have "systematized" their trading approach with a fair degree of success. It can be done. But 1) not by academicians and 2) not by price \volume data alone. Of course, making money isn't THAT easy. A book that I recommend that will tell one how to become a successful trader is: TRADER VIC - Methods of a Wall Street Master. He shows in the preface on page X his 10 year annualized return record against the S&P. I'll let you guess as to whether he blows it away or not. ( and VIC is just "great", there are better traders out there)
As mentioned previously, it is best to learn from those who have succeeded rather than academicians who do not have the skill to succeed themselves in the field they analyze. If they did, they would NOT have conducted a serious investigation based upon price\volume data alone because they would have known beforehand the futility of the endeavor.
Finally, it is not uncommon for highly intelligent males with scientific and seemingly mentally disciplined propensities to assume unduly skeptical perspectives. This, specifically, is because of a lack of empathy which is relatively common in the male animal. The problem is empathy is essential for openness of mind and the ability to accord reasonable import to others opinions. A manifestation of this shortcoming, for example, would be not paying adequate attention to an singular, undeniable, but seemingly discordant viewpoint among the crowd.
As I said previously, ( and no offense intended) if you are strictly an FA guy, (and haven't read the two books above, at least), then you aren't really in the position to comment on short-term price movements.
Happy Investing!
Jason
P.S. I am NOT an expert on TA, but I will be someday. Even a basic understanding can go a long way in improving the results of a short-term investor, if you have self-control. :-) |
