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The whole basis of technical analysis is that a chart is a chart. While
futures are more leveraged and may be more volatile, if you do not put
price levels and time frames on a chart, there is no reason to believe
that anybody could tell whether it is a chart of a stock, bond, futures
contract, or any other traded item. If you could, then it would say that
humans are different.
That does not mean that patterns do not develop at a different rate, or
with slightly different amounts of noise. That would make sense since we
are talking about highly leveraged, versus unleveraged money. I am not
sure, but I think margin requirements are much lower in some other
countries, and I would not be surprised to see more volatile trading in
those places. For that matter, with people borrowing against their homes
to buy stox these days, they are quite leveraged too, making it ever
harder to find any reason to believe that a stock chart would be any
different from a futures chart.
Steve Poser
--
Steven W. Poser, President
Poser Global Market Strategies Inc.
http://www.poserglobal.com
Mervin Yeung wrote:
>
> Hi RTs,
>
> It will be interesting to do a test. If a RT post 20 charts without
> labels, I am willing to take the test and guess which one is a stock and
> which one is a commodity. Other RTs should take the test too. Then, we
> will have a survey and we will at least get an idea if technical
> behavior of a stock is different from that of a commodity.
>
> I think it should not be difficult: individual stocks have more base
> building (a base on a base) process than commodities.
>
> All the best!
>
> Mervin
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