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My, my, I have been making money all these years on the wrong assumptions.
Guess I will have to junk my system because all those guys say it doesn't
work. Ira
Mervin Yeung wrote:
> 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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