Thanks for your latest response on the MACD issue. Your answer put things nicely into perspective.
I enjoyed both of Schwager's Market Wizards books, and remember the incident you mentioned.
My feeling is that markets almost certainly must have changed over the past few years, with the advent of electronic trading, and tens of thousands of *new* traders now having entered. Thus, I think parameters on various indicators that worked fine in the past context need to be adjusted in the present.
For one thing, since TA is so widely used, signals to buy are going to be perceived by more people, who are going to be acting on those signals, and the price ascent will occur in a far shorter period of time, even in just a day. The initial ascent no longer is going to be spread out over a week. It's almost as if, if you're not in before the rise, it's too late.
So, getting back to the MACD question, my hunch is that 12-26-9 is going to get one in too late. And I agree with you (and Dave, Richard, CatLady, etc.) that studying the charts can fairly conclusively answer the question. But it is interesting to hear what others have to say.
Nicholas |
