Why Technical Analysis?
Presented by Lou Floyd – AAII Cleveland Chapter Leader
Saturday, March 25
10:00am - 12:30pm
Westlake Porter Public Library
Porter RoomLearn how TA (Technical Analysis) creates a context for viewing and understanding current market behavior, which is most useful for trend-following strategies.
Market prices are not derived from any fundamental attributes, but rather from the opinions of market participants about the future prospects of that security. Forecasts of prices are actually lagging indicators. TA creates a context for viewing and understanding current market behavior, which is most useful for trend-following strategies [aka early detection coupled with fast-following techniques].
Price moves in multiple nested cycles, with longer cycles serving as carrier waves for shorter ones. The single most important issue in trend-following is to sharply minimize the impact of major market tsunamis. Everything else pales by comparison.
Reliability of behavioral patterns increases exponentially as time frame increases. When viewing cyclic time-based data, essential to focus on changes of direction (features), instead of price per se. To insure representative view, need observation time intervals ~20 times the length of the cycle of interest, which corresponds to a feature count of ~20.
You will learn:
- Why all forecasts are actually lagging indicators of market behavior.
- Why context is critical to the understanding and utilization of market data.
- How trend-following, coupled with early detection techniques, can provide a sound strategy for investing.
Disclaimer: This talk should not be construed as investing advice, but rather as an exploration of ideas and techniques that people might consider in making their own decisions. Individuals are at all times solely responsible for their own investing decisions, actions, and results.
American Association of Individual Investors (AAII) is an independent nonprofit corporation formed in 1978 to assist individuals in becoming effective managers of their own assets through programs of education, information and research.
AGE GROUP: | Adults |
EVENT TYPE: | Education/Lifelong Learning | Business and Personal Finance |
Westlake Porter Public Library
Westlake Porter Public Library is an independent public library serving the residents of the city of Westlake, western Cuyahoga County and eastern Lorain County. The library is located at 27333 Center Ridge Road in Westlake, Ohio. Anyone who lives, works, owns property, or goes to school in Ohio can register for a free library card.