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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Teresa Lo who wrote (3888)	9/13/1999 6:57:00 PM
From: J.S.	Read Replies (1) \| Respond to of 18137

Teresa, Thanks for your comment on BIDS. Generally, I agree with you. While I pay attention to technical analysis and use it on many occasions, I remain rather skeptical. For example, I think that stochastics give a useful quantitative summary of candlestick type data. However, I wonder about its usefulness as a predictive over simpler methods. As for using moving averages, this seems to have the same theoretical foundation as numerology. Take the BIDS chart for example and draw successively a 3 day, 4 day, 5 day 6 day... through 30 day EMA. You will find twenty some lines roughly parallel from the high 4's to the about 7. Various systems will pick a few of these lines and anoint them as special and make prognostications based on the future closing price of the stock in relation to these special lines. Now these predictions may seem to work at times. Are these just self fulfilling prophecies or are these measures truly indicative of underlying market psychology? While I understand that, even under the best circumstances, no system can claim to be perfect or even highly reliable, It would be interesting to many to learn why one should believe that some system beats chance (random walk). Thanks, Joe