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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: HairBall who wrote (80711)	7/22/2001 1:21:29 PM
From: exeric2	Read Replies (2) \| Respond to of 99985

I tend to be a contrarian not only about market sentiment but also on some rules of TA, and this came from my own hard experiences. Years ago I was trading in copper futures. I had been reading all the books about chart patterns and thought I knew a thing or two. Lo and behold over days and weeks a picture perfect pattern of a head and shoulders began to appear on the copper charts. Knowing I was onto a sure thing if there ever was one I plunged. Needless to say it was a total fake-out and I ended up losing a bundle. That experience was a teacher if ever there was one. Now I take everything with a grain of salt. Actually I am a fast believer in one form of TA: Neural Nets. Don't get excited just yet. What I really mean is use your own brain as a neural net. Learn everything you possibly can about technical analysis, about supply and demand, about price valuation, and about sentiment indicators and stay involved in watching the market over years of time. Sooner or later if you have this commitment your brain will begin to recognize things that you sometimes can't quite put your finger on. You'll just know about which direction the path of least resistance is for the market. It won't be 100% accurate and it won't always be working but there will be periods of time when everything just flows. In those times, which might not last long, you can make a lot of money. This thing I call a neural net will also do something equally valuable: you'll be better able to differentiate between those periods when you have a clue and when you don't. You'll become more aware of when you are trading because you crave action rather than being in tune with the market, and better able to resist the temptation. God, I see a lot of people on SI who just crave the action and then just make up a market belief to justify their actions. If your own neural net is highly tuned you KNOW when you are in tune with the market and when you aren't. Nuff said.

To: HairBall who wrote (80711)	7/22/2001 2:29:01 PM
From: LTK007	Respond to of 99985

LG said<. The vast majority of individual investors will never be well versed enough in technical analysis to make that happen.> i agree with that,but i have been reading how the brokerages are apparently dramatically escalating their trading--that's where the change is i believe,WS and these trading rooms are getting heavily into TA,i get that feeling,at least,but it is anecdotal. One article gave me eye-popping insight to this,it was in a magazine called Active Trader which had a book excerpt from Steve Cohen's book "The Trading Room",and now i must remind myself to get that book,as it appears these mega-trading rooms are proliferating. Cohen's firm is S.A.C. Capital management.This is one quote from the article by a Jack Schwager ""I expected to find Cohen in a window encased office with a glass and steel desk.Instead,the receptionist led me into a huge,windowless room with six long row of desks,seating approximately 60 traders,each trader with an array of six to 12 computer screens" So as you say,the "big boyz" are a huge force armed with heavy weapondry--money and machines and multitudes of traders working FOR them. Anyone out-there who is amongst those traders,speak up.:)PaxMax