Tag Archives: chart patterns
Why do some chartists turn ad hominen when their practice is challenged? The plausible answer is that they are frustrated by continuous failures and are acting under the influence of backfire effect cognitive bias. In essence, there are people who … Continue reading
A recent failure of an island reversal pattern in the chart of the 10-Year Note yield adds to a long list of failed chart patterns in the last few years and reinforces claims that they are random formations. In the … Continue reading
Classical technical analysis has contributed to the largest non-violent wealth-redistribution in the history of mankind. Modern technical analysis is not doing any better.
I am saying the obvious but I know some will deny it: Anyone who makes bets in a game of chance without having a measure of the expectation is a naive gambler. This is what many traders do when they … Continue reading
Bonds, and especially TLT, the popular ETF, have become a junkyard of classical chart patterns, a place where wrecking of such dubious formations is frequent and unforgiving.
Trend-following based on indicators and classical chart patterns are two trading methods that were developed in mid 20th century using data from the equity markets mainly. These methods worked well for an extended period of time in those markets due to the presence of autocorrelation. After … Continue reading