I would like to introduce myself
to this group.
I am a retired manager of a major
U.S.
corporation. I was educated in the fields of mathematics, electrical engineering
and computer science and I have had an interest in stock market analysis for
nearly 20 years.
I believe my background skills
have given me a unique insight into technical analysis, allowing me to look at
and understand the mathematics behind technical analysis formulas, take an
unbiased common sense approach to the results of these formulas and develop a
system that does not succumb to the short
falls of Technical
Analysis.
I have been studying technical
analysis in the stock market since 1987, testing and analyzing hundreds of
formulas and charts. I began by
using commercial software with built in formulas, then wrote my own formulas and
finally wrote my own software and formulas.
I am now writing a book “An
Analysis of Technical Analysis”, which is far from complete but there is some
very relevant information that I will point you to a little later.
I have also been lurking and
contributing on many forums over the last 10 years or so, and I have made
several observations.
- The
questions are generally the same, form year to year. Some technical question on how to get
a formula or program to work and some general questions on how to make a
system that really works. The
technical questions are usually answered in detail but the system questions
are rarely answered except in the most general terms.
- There
are usually one or two Gurus who expound “I have developed a system that
really works well” but they never give explicit details on how this system
works and they never give actual trades until well after the trades have
happened. This gives way too much
opportunity to “adjust” the figures.
In other words, they never prove themselves.
- After
a period of time, a year or less, these Gurus disappear from the scene. Did they lose all their money, or
can’t they just keep up the BS?
Why is this the case? I will answer this a little later.
First I want to say that I have
created a “commercial” market timing website, but I will not advertise or even
mention the name here so that the moderator of this group won’t ban me. My main concern is to get some very
pertinent market timing information to those of you who are really interested in
trying to time the market.
Let me start out this way. Technical analysis (using mathematical
formulas only) DOES NOT WORK, WILL NOT
WORK, AND YOU WILL JUST LOSE YOUR MONEY!
How can I possibly say such a
thing, especially when I said I own a market timing web site?
I said “Technical analysis (using
mathematical formulas only)”.
Mathematical formulas, no mater how simple or complex, try to match a
recurrence, or pattern, in the market. They simply do not predict anything!
Experts contend that the market
is “random”
and “efficient”. We all know that random events cannot be
predicted and if something is really efficient there are no disparities to capitalize
on. These two factors alone tell you that the market is impossible, or nearly
impossible to predict, using mathematical formulas.
If you would like to learn a
little more about technical analysis, what works and what doesn’t, and what you
REALLY need to look for you can read
more of my upcoming book. The start
is here “An
Analysis of Technical Analysis” or you can get the quick and dirty “summary” here.
It won’t cost you a cent, but it
might save you several!
Thanks for reading.
Larry