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Strategies & Market Trends : Trade What You See, Not What You Think -- Ignore unavailable to you. Want to Upgrade?

To: Apakhabar who wrote (498)	4/14/2001 12:04:53 PM
From: Threei	Read Replies (1) \| Respond to of 867

Hi Apakhabar, I totally agree with everything you said about decimalization impact. As much as I hated it during testing stages, I never expected it to turn out as it did. I like the way stocks move now - smooth, readable, with low execution risk. All major principles of reading work like charm. For some reason follow through is much better, although I am not sure whether it's decimalization that caused this or it's improved market conditions. Your suggestion about cycles of life of technical analysis sounds right to me. This kind of cycle stems from major law: market works in a way that makes majority lose and allows handful to win. Pattern fails more and more often as more and more players try to utilize it. There is just one clarification that seems necessary to me. (I am going here into something where TraderAlan probably would be the best person to put it all in words so consider it rather attempt to provoke his intervention :). I think there are different levels of depth of TA. Deepest level of them is based on principles that never fail. Never have, never will. For them to fail, entire human psychology should get changed. That's why major principles of tape reading work in any market. Capitulation, euphoria, foregoing slow movements, trends, ranges etc - this all works. Less deep levels of TA go more into distinctions: exact signs of this or that event coming, fine reading of the moment. This kind is a subject of cycles you described. That's where fuzziness kicks in. Ability to read these changes, to apply intuition, to adjust is what makes the difference between great trader and formal follower. During late drastic changes in the market mood we applied pretty simple method of adjusting. When scanner generated first let's say capitulation alert we watched the stock to see the reaction. Second and consequent alerts we would take as a play accordingly to how first acted. It helped to gauge market mood for particular day about particular type of alert with minimal risk. Vadym