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Strategies & Market Trends : Technical Analysis - Beginners
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To: Jim DiFalco who wrote (9130)2/2/1999 4:41:00 PM
From: Richard Estes  Read Replies (1) of 12039
 
Back in the dark days before computers, there was pattern reading. You had to do charts by hand, think the time for keeping just 10-20 current. Think of trying to do the basic formulas on a hand calulator (we didn't have them until after 1970, they cost $300+ for a $5.00 one now) or pencil and paper! Patterns and simple MAs were the tools.

Now the picture is different. Computers allow you to scan 12,000 stocks in a few minutes for formulas that baffle most. Computers don't do that well with patterns, Very hard to define and variation is too great. Patterns are in the eyes of the beholder, very subjective. Do they exist? Yes. Are they accurate? Have never seen any proof.

So, a warning, if you apply yourself and make money with patterns that is all that accounts. But, if you jump into and out of stocks based on Triangles you can see all over the chart, depending on your focus, you might come up short blaming TA for your subjectivity.

What would I say to beginners: Know them but don't trade them. Like candsticks use them for confirmation not decision making. You need objective measures to control emotions. Your eyeball is not a good one.

Find some objective measures and use them. They should be fitted to you. You need to trust them.

I gave away my Edwards and Mcgee long ago.
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