Well, if their system was any good it should have been a simple matter for the defendant to demonstrate that it did add value.
Why this concept escapes the market efficiency discussions here on ET has always confused me. Market efficiency is all about the current price reflecting "all publicly available information," whether known or anticipated. That is it. Nothing more.
They're currently teaching us in school that stock price movements follow a Markov process -- where the next movement is an independent process free of any movement that was made prior. In some ways, I'd have to agree -- in other ways, I'd have to disagree. As far as second to second movements go, I don't think there could be any indication of what will happen next -- since a big sell order could be coming from NYC at t+10 seconds and an even larger buy order could be coming from Chicago at t+13 seconds. Multiply this chaos by tens of thousands of active traders, and you really have no idea what is in the pipeline.
HAAAHAAAHAAAHAAAHAHAAAAAAH! ROFLBMAO Haven't laughed this hard for a while.... It's like - No, it's PURE COINCIDENCE that even the SPX & COMPQ most of the time follow EXACTLY the regression channels, trendlines, bollinger bands, let's not even mention MA's - Just to name a few simple indicators. Hey folks, I'm talking about the BACKBONE of the WORLD economy here! Even every single institution on earth follows those TI's - Are those clowns mad? I've only ever lost money in the markets by considering fundamentals - They're worth SHIT! I don't even give a damn about them... EVER! CONCLUSION: My whole life I've been living a lie! All the money I made in the market was an illusion! I don't really pay the bills, I don't live in a great place, I don't drive a fast car. In reality I'm broke, because the fundamentalists are the only right ones. ROFL What can you say! F*CKEN JESTERS! Makes me wonder who pays those clowns for making statements like that! Most be some desperate attempt of the reserve to save the dow or something by saying TA's are wrong... HAHA! TA, properly used, is more than 90% precise. Not because it works - But because everybody uses it. Simple as that. Unless EVERYBODY stops using TA, it will ALWAYS work. And I heavily doubt that that'll happen - 'Cause why give up an edge? Why give up your job as a trader? I'm still laughing. Let's hope it fools a few traders and makes them act on fundy's - ~Scientist
The farmer don't eat what he don't know. Thank heaven for the idiots in our government and academia - we don't need any additional competition. No one claims that TA can predict the market, but it would be impossible to digest the reams of data available today. I consider it a mathematical/graphical tool that allows the brain to "see" and digest a vast amount of data in realtime which is impossible without it. It would be like going back to the slide rule and creating graphs by hand from pages and pages of data. I consider this report helpful to the TA community. We are contrarians by nature anyway.
Alot of the debate on efficient market theory is irrelevant to the daytrader, as is whatever intrinsic value of these securities exists (if any). Rather we should stay focused on price movement, which must be predicted to some extent. Not what people think about the value of a security (this more relevant to the longer term investor), but what traders are doing right now in the marketplace. Those teaching that price movements are always independent of each other are certainly not professional traders (maybe failed traders? ) Also, saying that the "market is random" is a generalization about how all stock prices react at all times, and in that sense is certainly not true. The fact that there are people successfully doing this on a regular basis proves that price movements are not completely independent, and price movments can be predicted to some extent. Of course, that huge institutional order that will kill a stock's run cannot be predicted by us, but we can still operate in that environment and have a positive expectancy with our predictions. You could say that the market is random and that some must succeed anyway out of pure luck. I believe that this would be true if one were to never change their system, and that any system will eventually stop working, but since we can adapt and change, we can (hopefully) stay one step ahead in our methods to predict price movements. However, I don't mean to use this argument to defend TA. The vast majority of TA is worse than useless, it's misleading. It is effective only to the extent that others are using it too, and their hands are strong enough (ie Big players) that they can hold prices at their desired levels. I think we generally just stay concerned with - where a trend exists, and can we ride along on these trends.
It is because so many people believe this that "TA" will always work, regardless of whether anybody "uses" it or not.
They must assume that every person trading the market is totally informed, wise in all disciplines, completely devoid of emotion, and supremely intelligent. Looking in the mirror I would have to disagree with them!