STREET DOGS: Tracking backwards
Technical analysis tracks the past; it does not predict the future
The technician believes that anything that can possibly affect the price — fundamentally, politically, psychologically or otherwise — is actually reflected in the price of that market. — John Murphy There are thousands of difficult-to-understand mechanisms that lead the market, which come into play before the news reaches some poor trader sitting at his desk. But the one thing that does hit the market is a huge sale or purchase. Isn’t that the basic rationalisation for technical analysis? Technical analysis, I think, has a great deal that is right and a great deal that is mumbo jumbo. There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future. Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders may say about the future activity of other traders. For me, technical analysis is like a thermometer. Fundamentali...
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