Tag Archives: technical analysis
Managing a hedge fund, or even a managed accounts operation, nowadays is far from trivial given the market timing challenges and regulatory requirements. But there are also some other facts that are not so widely understood.
All actions in the markets based on any method, technical or fundamental, amount to forecasts. Any claims that technical or fundamental analysis are not used to make forecasts but for risk management purposes only are naive and demonstrate ignorance.
This new meme that emerged last week confirms my view that many try to rationalize price action in the context of their expectations and that most of technical analysis is thinking in words.
Yesterday the S&P 500 made an intraday low a little more than 0.8% below the previous day’s close and that got some bears in social media excited. However, it is the relative frequency of these events that counts, not a … Continue reading
Many traders overestimate their technical analysis skills and this mainly involves those using old and outdated methods. However, in some cases technical analysis is used as a cover to promote wishful thinking.
Until now I thought that the main problem of technical analysis is bias of all kinds. A tweet from N. N. Taleb yesterday got me thinking. Maybe there is a more serious problem than bias: thinking in words.