Read any book that contains interviews with big shot traders (market wizards, hedge hunters, inside the house of money) and talk to most risk managers (JDV, my boss), and you will realize how important TA is.
TA doesn’t work and is useless, all the best traders at my firm just trade on catalysts, it takes years to be able to anticipate catalysts tho…and catalysts can only be seen in footnotes and on breaking news…
Interesting thread. I’ve generally found the less experienced or less knowledgable people are, the quicker they are to reject something on the basis of dogma. Timo, maybe TA is useless for what you do, but I doubt it. The primary appeal of TA is that it minds the downside. In FA a value stock just becomes more “valuable” as the client is losing their shirt. I have both charters and I regard both of them as equally valuable for different markets and different reasons. It seems like a waste to have read all the TA books and not get the CMT charter. Reason one: you don’t really know if you understand the material, and reason two: the MTA is filled with people who willingly share their knowledge. A lot of people think they understand TA because they read a few books but they may not be aware of arguments for and against the various indicators. That means they are playing russian roulette with their trading. But even so, I tend to use the most basic principles and stick to very basic assumptions in my day-to-day trading. For the intellectually curious, there’s room for innovation in TA both on the practical and theoretical front.
But Timotimo said it with such authority. Therefore it must be true. I read it on the internet.
nocareer Wrote: ------------------------------------------------------- > I’ve been told a “theory”: Mutual fund industry, > many universities, and brokerage firms bank on > investment EMH populists like “Stocks for the Long > Run” Siegel and “Random Walkers” because > fundamental analysis presents a far better face > for the industry. It’s supposed to be a marketing > shield to help retain some consumer confidence in > the financial services industry during inevitable > economic downturns. Maybe that’s why technical > analysis is extremely minimal in the CFA and > universities don’t teach it? +1