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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: TREND1 who wrote (31917)	4/9/1998 11:41:00 AM
From: Wayners	Respond to of 53903

HAL isn't the computer from 2001 and 2010? Anyways, there's no sure thing in the markets obviously. The best we can do is put our dollars on the highest probability plays by making forecasts about the future based on past data. Both FA and TA use the exact same principle, they only use different data. FA tries to take historical earnings, sales and even recent news events to forecast what the future earnings and sales are going to be. TA cuts out the middleman and instead of trying to forecast future prices on past earnings, it simply forecasts future prices on past prices. Now think about the casino and making a graph of how much money you have over time. It should be a dowsloping line to the right with rolls up and down as you win and lose, but the overall trend is down. Think about putting a moving average on that same plot. It will be a dowsloping line to the right. Same thing is true for a stock with a downward sloping moving average. Buying something on a downtrend for a longer term investment is like going to the casino. Over time you will certainly lose unless the trend changes. Its been my experience that the direction of moving averages do not change that rapidly in the stock market. This is a good thing. But when I do see a trend change and its against my postion, I exit immediately. That's the best you can do. I use WoW and if I try to program everything into it, it actually crashes the computer. So what I end up doing is programming in buy and sell signals based on stochastics and then evaluating those signals based on manually looking at the trend, so that sell signals on a downtrend and buy signals on an uptrend are accepted. Because of this kink (I need better software) I can't backtest it. All I can do is look at a lot of charts to get a feel for how well it works. It does work, but a really good system would have to take into account the trend, the volatility and price standard deviation away from the mean.