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And to add a further thought, there is a fairly strong argument that it is
the patterns created by "fear and greed" that create the natural fractals
that provide some degree of predictability (e.g. Prechter's work on
socionomics).
i.e. fear and greed (herd behavior) create patterns, not randomness.
Andrew
________________________________
From: equismetastock@xxxxxxxxxxxxxxx [mailto:equismetastock@xxxxxxxxxxxxxxx]
On Behalf Of teclogeo
Sent: Wednesday, September 07, 2005 4:34 AM
To: equismetastock@xxxxxxxxxxxxxxx
Subject: RE: [EquisMetaStock Group] Trading ain't gambling, is it?
What I said is as relevant to stocks as it is to anything that is not just
pure speculation.
I'd like to recommend a book if you haven't read it already:
J.M. Hurst "The Profit of Stock Transaction Timing"
It's a classic from 1970.but what he says about cycles, fundamental trends
and randomness has just as much relevance today. If you read that and then
look at a modern stock chart in light of what he says then I would suggest
that it becomes very difficult to argue that there is not a significant
cyclical component present in most markets. Hell, it's obvious anyway, you
don't need to read the book! And once you admit that then it becomes natural
to conclude that those cycles can be modelled - not perfectly of course, but
perhaps at least to a degree that it can benefit your trading.
A very dirty summary, but with a nice picture representation of what a whole
bunch of superimposed cycles actually looks like, can be seen at
http://www.stockmarketcycles.com/technica.htm
That's not all there is to it of course.but if cycles do exist then it can't
be all randomness from "fear and greed driven by emotion" can it?
Andy
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