re: Technicians, Technical Analysis and straight shooting.
When firms with Billions and Billions and Billions of Dollars under RETAIL management like Citi, Prudential and Smith Barney eliminated their entire Technical Departments and fired the likes of Louise Yamada & Ralph Acampora after 15 year stints...it kind of gives you some insight into the real-world day to day, cycle to cycle and year to year longterm efficacy of technical analysis.
TA has to be kept in proper perspective.
On Wall Street it's primary value is in "marketing." Having a unique mechanism to differentiate your methodology from the rest of the street is borne more out of gaining a marketing edge than it is out of real world results.
TA has it's place in any traders toolbag...if only because so many traders are going to try to utilize it.
It's greatest value actually comes when it is used forensically against a socionomic backdrop. What caused the madness of crowds to do what it did, when it did what it did...
-- what really drove the herd?
98% of the time -- "what drove the herd" had nothing to do with where the Fibonacci levels were, or what the Bollinger Bands and Stochastics were reading...
End of subject -- in my book.
I know this is an endless debate...and TA afficianado's are going to dredge up tale of Richard Dennis's "Turtle Traders" and other trend traders who neither lived, or traded in a vacumn. They were also exposed to the endless 24x7 barrage of politics, economics, social trends, geopolitics and news that drove the underlying fundamentals and sentiment of the day.
Hand the same chart to 100 Technicians from the same school of technical thought and you'll get 97 different interpretations.
Hand the same chart to the same technician -- with a different backdrop of news, geopolitics, economics and herd sentiment...and you'll get an "straight shooting" violation every time.
Technicans are human beings first and technicans second. They are no different from the rest of the human condition, as 95% of all technicans are also -- doomed by thier own DNA because it's impossible to trade within a vacumn. Technicans just like everyone else have emotions... they are not immune to the same greed, desires, fears and frustrations as the general population. Less than 5% are capable of being intellectually honest with themselves -- let alone anyone else.
...and that is especially true; when their subscriber base cuts and runs when they don't hear what they want to hear.
Whipsawing and waffling by any other name are still whipsawing and waffling.
Fundamentally, or technically -- here's what I want from a fund manager, newsletter advisor, or technician:
1. Ideas and opportunities that are still under the radar and priced accordingly.
2. Compelling discrepancies between price and risk ... both long and short opportunities.
3. Get me out -- into the major blow off speculative tops -- as oppossed to getting stopped out all the way down on major corrections.
4. Keep me out -- during violent whipsaw corrections.
5. Don't be afraid to tell me when the risk to reward ratio's all point to sitting in CASH.
...because I do believe that sometimes the best trade -- is no trade at all.
6. Don't be afraid to tell me what I need to hear -- and not just what I want to hear.
7. Produce results that significantly outperform the market in both up and down markets...over a long period of time.
Do that consistantly and I'll gladly hand you my business, my money and/or my subscription.
Just my .02c
SOTB |
