Technical Analysis provides Significant Reference Points to trade around. Where is the current price in reference to a previous significant point that buyers or sellers took a stand. Is price moving closer to or away from that point? Does TA work? YES. It provides trades with a visual spot that says "I am out here if I am wrong, I am out here if I am right." DTP
System Dynamics was originated by Jay Forrester at MIT in 1961. It seems some similarities can be found with Soros' Reflexivity which, in his book The Alchemy of Finance, "can be depicted as a pair of recursive functions: y=f(x) cognitive function, and x=g(y) participating function, Therefore y=f[g(y)] and x=g[f(x)]". The Theory of Reflexivity http://www.geocities.com/ecocorner/intelarea/gs1.html Beyond chaos and dogma http://www.geocities.com/ecocorner/intelarea/gs9.html
imo, In system dynamics, there are two major factors: Rate (say, the speed of learning a new TA approach from one trader from another, as sometimes the rate can be zero) and Volume (say, how many total traders have adopted the new TA approach, as sometimes the number can be just one), to consider for any (significant) changes in TA.
There are many traders that still continue to use just pivots you know . What do you mean by "complex" TA BTW ? Do you mean for example volatility model like GARCH type models & Granger's ? I can tell you they are not considered as the same family as (traditional) TA but as stochastic model which are FUZZY by conception and they predict almost nothing except that the variance will ... vary hee hee ! Since they don't predict much they are restricted for global risk assessment or arbitrage strategy which is the chicken strategy of those who can use the mountain of money they can get especially when they belong to the Gang affiliated with the fed's bank . Frankly traditional TA has nothing to envy with these complex model. Mine belongs also to such complex model but it is deterministic and above all CAUSAL unlike many adhoc fractal model and it could be used to demonstrate the validity & rationality behind traditional TA which is too often attributed to irrationality of crowd whereas the crowd's behavior is not the origin of TA but only an effect - once again this is confusion between cause & effect which is made by those who affirm that although I admit that they have no mean to know the true origin as long as they don't have access to the true rational model behind it because I can tell you that it is well hidden for the reason that a deterministic chaotic model can well simulate erratic behavior so that it cannot be distinguished from "true" random law (by random I don't mean normal law it can be anything rectangular, triangular, anything see the other thread http://www.elitetrader.com/vb/showthread.php?threadid=25033 ) or even no random law at all (because a system IN GENERAL is not obliged to follow any law : random law => LAW but sometimes there is not even a LAW at all including random - statistically speaking there is no probability universe - whatever its functional form bell curve or not - associated with such system; now it is well known that stock market follows in fact a power law which is more tailed than a normal law).
OK. It's new to me, but if it works for you it works for you. There are many clever people out there who can survive and even prosper in a tough environment; I'm just worried about the future - and not necessarily long-term. The next few months should prove exciting - maybe even defining.
Not sure these links for RSP are relevant: http://www.rwfinancial.com/mutualfunds.html Q Ten RSP Investments Mistakes to Avoid UQ http://www.a-z-free-investment-data.com/stocktrend.shtml Q Interesting Stock Trends Stock trends can be useful, when considering to by or sell. Terms such as summer rally, recession, recession and more. Every action has a reaction. Comparable to leaves falling off the trees in the fall due to the cold. UQ
===== [1]Fortunately TA is lots bigger than ''self-fufilling'' ,bigger than fund managersor & pro daytraders; remember the recent bond deal Land of Lincoln lawyers did recently to invest in stock market??? [2]Unfortunately some think its as accurate as prophesy -dont think TA has ever been prophesy; try word search'' shipwreck charts'' %%%%%%%%%%%%%%%%%%%%%%%%%%%%% [3]Fortunately i would say Don Bright , Harry-Trader are right to question even price data; top 3 mostly accurate chart providers frequently have 3 different # $ on 20 day ema [moving average ]
And how about those Daily Ranges? Intermarket Market trades -Nasdaq 3rd-tier - occur at hi's/lo's far out of Comp ranges every day and still wind up recorded in daily stats.