Headline:
Wall Street Snake Oil.
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Price Charts = Exceptionally Beneficial Pictures To Both Investor/Trader…
Reflecting Both Current Expectations + Historical Price Performance.
However…The Hundreds Of Associated/Layered Derivative Technical Indicators Such As =
1. Moving Average +
2. MACD +
3. RSI
Measuring =
1. Momentum +
2. Relative Performance +
3. Thrust
= 100% Waste Of Time…
As No Matter How Infinitely…
1. Configured +
2. Prioritized +
3. Shuffled
Their Ability To Even Moderately Assess/Predict Future Price Performance = At Best = 50/50
…Especially When Reviewed/Tested Over Multi Cycle/Year Periods…
Versus Recency Biased + Truncated Time Frames.
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The Primary “Head-Fake” With Derivative Technicals =
Trending Markets [Higher Highs + Higher Lows + Vice-Versa For Shorts]…
As Derivative Technicals Can Appear To Be Relatively Reliable…Perhaps Even “Black-Boxable”…
However…When Trending Markets Either Break Or Simply Devolve Into Non-Trending Markets = Most Markets Most Of The Time…
Derivative Technical Signals Are Reliably Tardy + Fail To Produce Consistently Acute Execution Triggers.
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A Frequently Under-Appreciated Factor Regarding Derivative Technical Measures = 100% Price + Regression Based.
Thus…A Great Paradox With Derivative Technical Application =
Backward Looking Derivative Technicals Are Applied To Forwardly Discounting Equity Securities =
Which Might Also Explain Why Derivative Technicals = No More Reliable Than A Coin Toss.
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Attempts To Structure Decision Making In Chaotic Financial Markets = No Great Surprise.
And Some Structure Makes Good Sense = Capital/Time Management.
However Markets = Not An If/Then Science…
Rather…More Often…
Markets =
1. Adaptive +
2. Emotional +
3. Exuberant +
4. Vindictive
Not Surprisingly…Like The Humans Programming Liquidity/Trading Models…
And/Or The Portfolio Managers Forever Attempting To Solve The Unsolvable Market Puzzle.
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Furthermore…Markets Are Also Notably Skilled At Sniffing Out + Punishing Crowded Trades…
As Well As Rewarding Those Swimming In Opportunistic Deep Water With No Terra Firma In Sight…
While Not Conforming To Any Compulsory + Static Rules…
Such As Ubiquitous Derivative Technicals…
Which…Are Nothing More Than Imperfect Predictors Of The Past.
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