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Hi RTs,
On the subject of the difference between stock & commodity, (technical
analysis, let me quote the interview with great traders in the book
"Market
Wizards":
Bruce Kovner: "The stock market has far more short-term countertrends.
After the market has gone up, it always wants to come down. The
commodity markets are driven by supply and demand for physical goods; if
there is a true shortage, prices will tend to keep trending higher. "
Richard Dennis: "My research on individual stocks shows that price
fluctuations are closer to random than they are in commodities.
Demonstrably, commodities are trending and, arguably, stocks are
random. "
Mark Weinstein: "Absolutely. In contrast to the commodity markets, the
stock market very rarely gives you the opportunity to enjoy a meaningful
trend. .... Because when instiutions and specialists sell out, they
don't sell out at one price level, they scale out as the market goes
up. Similarly, when they buy, they scale in as the market goes down.
This leads to choppier price action and is the reason why many good
commodity traders that I know lose every time they go into the stock
market. "
Good trading.
Mervin
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