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A.J.,
Thank you for your response.
> related to an instrument's value. Price action isn't a symptom, it is
> the event itself.
With respect, I disagree. Price action is the the end result of buying
and selling, and therefore by definition must be the effect (the
symptom) rather than the cause. Price is the final expression of an
event, whether you think that event is supply/demand, or rising interest
rates, or whatever.
> Your reasoning assumes that it is a function of
> "fundamental" factors, which in the short term isn't really the case.
Actually, I misstated this to some degree. In fact, I think that both
price based technical analysis and funamental analysis have serious
shortcomings -- and fundamentals even more so short term. Often the
market will just shrug off a bearish economic report, for whatever
reason. It just seems to depend on the "mood" of the market sometimes.
My point was that the only real cause of price movement is buying and
selling -- for whatever reason.
> That's what TA is, though. Anyone who would say that TA is useless
> obviously does not have any kind of understanding of it.
All I am saying is that price based technical indicators, more often
than not, have no predictive value. To use a very simplistic example,
the fact that price closes above a x-day moving average says nothing
about where price will be tomorrow, or the next day, etc. And people
who use moving avergaes (just for example) in this way know this. They
are not trying to predict price, they are trying to catch a trend -- but
choppy markets can make for huge drawdowns. Like I said, this is a very
simplistic example, but I am just trying to illustrate a point.
> Frankly, I wouldn't expect such studies to be of much value in this
> time
> frame, but if you can find something along this line which works, then
> it would be worth looking at, at least as a supplemental indicator.
> It
> is important not to clutter the decision-making process excessively,
> though.
>
After all is said and done, I must concede I have absolutely no
experience day trading, so you could be right and I could be full of
crap. I plan to do some research soon.
Anyhow, thanx again for your comments. I'm not trying to be
cantankerous here, just clarify my original point.
Regards,
Dave
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