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At 11:28 AM 5/15/98 -0500, Steven C. Walker wrote:
>
>A good start is to accept the fact that something like eight of ten stock
charts have
> nothing to say.
Steven,
This is very true for me. I continually strive for trades which offer the
best likelihood of profit, not just any trade. Many times I can't
find a high-probablility trade. You can't make a trade where there is
no trade! Don't trade unless it's a good market. One of a trader's best
assets
is his ability to stay out of the market (paraphrasing), when appropriate.
"Preservation of capital is more important than loss of opportunity." -Quote
from Joe DiNapoli.
This approach is more appropriate for discretionary traders (try to
skip the losing trades and take the winning trades).
Mechanical system traders must train themselves to take every signal as a
trade, for fear of missing the profitable trades amongst the inevitable
losers,
missing the "big one" is a common fear. System traders need to take every
trade if they have backtested and trust the system.
Both mechanical and discretionary are appropriate (though I have my
preference) but the art of waiting for a high-quality trade is
an important part discretionary trading.
-Neal.
>I use Worden Brothers for my end of day data. Usually, there is some
commentary that comes along with it. I thot today's comments were
interesting and I pass a portion along to you.
>
>"It is important to know what technical analysis can and cannot do. A
good start is to accept the fact that something like eight of ten stock
charts have nothing to say. Many technicians go wrong by thinking they can
find the basis for an intelligent technical opinion in any chart if they
are astute enough to ferret it out. Not true. A typical chart is like a
Sphinx - silent and mysterious. It can only show you the results of the
struggle between the bulls and bears. In some cases it offers clues as to
who are the smartest . In most cases it cannot. The trick is to devote
your energy to those charts that are actually betraying something about the
opinions of, for want of a better phrase, somebody in the know."
>
>There is more but this captures what for me is a surprising message.
Comments?
>
>
>
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