[realtraders] Tech analysis - waste of time? {01}

[RJones2279@xxxxxxx]

Hi RT'ers,

Read an interesting article here in England in the Investors Chroniclebased 
on a paper :"Methodical madness: technical analysis and the irrationality of 
exchange rate forecasts"(Economic Journal - Oct 1999)

Have'nt read the original article but it studied the use of the popular head 
and shoulders pattern as a predictor of currency movements( 6 leading 
cuurencies against the US $ - 1973 - 1994) and found it to be useless.They 
said that where pattern did give good results it may have been because of 
self fulfilling prophecy as so many traders use the technique.

They said that profits could be bettered by using much simpler trading rules 
- MA crossover or when current price is above recent levels are two cited.

Whilst the article studied the H & S pattern specifically the IC intimated 
that a large part of tech analysis is a waste of time. 

Any comments?


Bob Jones