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Strategies & Market Trends : Technical Analysis - Beginners
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To: Herc who wrote (10365)5/28/1999 2:50:00 PM
From: CatLady  Read Replies (1) of 12039
 
"T.A. is supposed to help us understand the psychology of the mkt, and I can't comprehend the psychology of M.A.'s."

I had nearly that same response when I first picked up a TA book years ago. It turned me off from TA for years, as it all seemed to be just a bunch of VooDoo nonsense.

I now think of moving averages as a mathematical way of representing the trend of prices over time without the noise of daily up & downs. MA's and other indicators became useful for me when I saw them as just a tool without any mystical meaning, used to help you see the patterns in price movement.

Something like a 40-day MA (just as an example) only becomes useful for me in looking at a chart, when I can look at data and say that when the price moves above that MA level it tends to denote a meaningful trend.

After that, I want to use something like Metastock to test for the relationships that are to subtle for me to see easily by eyeball alone.

Does this rambling make sense to anyone besides myself?
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