It's hard for me to understand how you can trade futures other than financial derivitives off of technicals. I would think that commodities would trade off of fundamentals alone. Currencies, grains, metals, oil and natural gas etc. should be controlled by supply and demand, weather , politics, etc. Yet I see lots of traders trading off of chart patterns alone. The only explanation I can come up with is that lots of other traders are doing the same thing thus creating a self-fulfilling scenerio. Perhaps some of you commodity traders can enlighten me.
no no no.... lots of technicals in the market will RUIN the market. That is what's happening in the equity market now. Fundie people create momentum, techie people ride momentum. Therefore a heavily fundie driven market is a techie's heaven.
read this http://www.equis.com/free/taaz/efficmarktheo.html I disagree with the theory, however, I agree prices attempt to discount everything known at any given point. It is only an attempt though. Technical analysis followers believe moves (trends) take time to develop basically. Therefore, it is possible to ride them for profits. I agree with them. This is true for commodities as well as equities. I believe purely fundamental analysis fail because not everyone wants the same thing at the same time. therefore, the same event (factual and fundamental) will be interpreted in different ways by different people. They agree on price but disagree on value. Each fundamental analyst do not know everything. and that's what you don't know which kills you. charts are therefore a more refined view of the complete picture for a specific market. It is not ideal, it might not even be a basis for forecasting (maybe forecasting is impossible). but it is better imho than fundie. most traders making money do not attempt to forecast the market, they only attempt to follow the market. that's not the same, think about it. neo
Dozu.. Thats very interesting. I haven't heard it put quite that way before. May be the reason most pros gravitate toward the futures if they last long enough. That plus the leverage.