Apply of TA

Discussion in 'Technical Analysis' started by lojze, Dec 9, 2002.

  1. lojze

    lojze

    My origin is from computer industry and that the reason, that I got today interresting article about behaviour of computer memory prices compared to moving averages of those prices.

    You can find some graphs and more detailed info in an attachment, but here is the question:

    What are the areas where trading TA can be used, except for trading itself?


    Lojze
     
  2. Wrong question, it's just the way around. TA uses simple concepts of statistical analysis: such as moving averages, standard deviations (Bollinger bands). TA itself has little to offer statistical analysis, probably nothing.
     
  3. I believe the original application of exponetial moving averages was to predict enemy shipping movements in WW II. Warships proceed in a zig zag path to confuse pursuers.

    Another interesting application of related technology is the Fair Isaacs credit model, which I believe uses some sort of artificial intelligence or neural net model to generate a credit rating.

    There are numerous computerized pattern recognition applications, such as fingerprint identification, facial scanning and other biometric uses.
     
  4. In other words, TA is just statistical analysis applied to the financial markets. Of course, you can have objects specific to TA that may not be found in other areas where statistical analysis is applicable, but moving averages are one of the basic concepts of statistical analysis and you can use them anywhere where average changes in time are of interest.