There are some interesting TA articles in the November issue of SFO Magazine. You can find it online too: http://www.sfomag.com
there is a reason, but the reason is only known in hindsight. it is not random as random is commonly understood--however it is random within certain parameters. it all goes back to what a very wise man shared with me---- if a coin flip comes up heads 5 times in a row, is this a heads trend?? surfer
well if you take 1000 samples and do a lag 1 regression and there is a weak autoregression indication, that means the trial is biased
Price cannot be projected forward with any meaningful accuracy. Time when important price level will be established can be projected forward.
Would you care to elaborate on your assertion that "Time when important price level will be established can be projected forward"?
I just love it when analogies are mis-used! But tell me something Hank, is this really analogous? I mean, a coin flip is just that, some bored geezer tossing a coin. If it is a fair coin, and fair tossing method, and we assign a value of +1 for heads, and -1 for tails then the long term expected value is 0, i.e. 50% heads, 50% tails, Price, on the other hand, can move by 0.25pts up or 0.75ps down, then gap up 2 points, etc, etc, and unfotunately, it isn't generated by some geezer tossing a coin, rather it is a consensus amongst a group of people, or computers programmed/operated by people, having different needs, different views, different utility and risk-profiles. And lets add other info, like volume, transactions per unit time, volume per unit time, B-A-spread, etc. "Ahh, yes" you might say, "but the ensemble effect appears to be random - don't we model prices by GBM?". The key words being, "model", "appears". The key questions being, "What is price", "what is random", "how can I profit from this"? Something to think about...
It is if its a two headed coin Actually coin tossing is not an appropriate annalogy to the market because in a coin toss we have advanced knowlege of how the "observations" will be created, by a "fair" coin toss. In the markets, for all we know the "coin" might be slightly unfair, or worse it might fluctuate between fair and unfair (random and non-random). Here's a thought. Insider traders dont believe in the random walk theory. I mean if the markets were truely random then if an insider trader buys a month before an announcement, he/she will be equally liable to suffer a loss as have a win. Does that mean that the market was non-random to the insider trader, but random to the rest of us? No, it means that the markets may be partially, or even mostly random. But events do happen that can be foreseen by somebody.