UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: OrmontUS Big gold star, 5000 posts Feste Award Nominee! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 455313  
Subject: Re: Technical Analysis Idea Date: 4/22/2013 9:23 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
Back around a gazillion years ago, in a largely analog world, I was working on creating a multidimensional model which could be displayed in a two dimensional world (a color CRT tube). It's easy to imagine a three dimensional image, but by considering adding shape (say distorting a virtual object between planar and a curve at any given point), color gradient at any given point and appearance of texture at any given point, a visual object could display a large number of simultaneous dimensions (hopefully in a way that would be useful).

While pretty cool, and possibly still useful, this is more of a qualitative technique and depends on our personal evaluation. Yoda brings up a good point that both the frequency and time domains are involved and the first step is to strip each individual waveform out from the mess.

While harmonics are easy to calculate, the fun comes in when we consider how the shape (over time) of each wave affects some of the others. That this affect is non-linear in many cases makes the analysis a bit funky. It is the creation of this model which will determine part of the success of a financial institution's use of the data.

Simple or exponential moving average crossovers are simply anecdotal - except so many people use them that their actions become self-fulfilling prophesies in many cases (and when they don't - there is a shrug and the statement "well it was only statistical). The same is true for many other "rules". So these rules add a preference or bias which should be included in the model (what others think matters in this case).

Charts are useful, but don't get carried away with them unless you make the effort to deconstruct them first. On top of that, while the mechanical guys would roll their eyeballs up in the air - macro and politics matters. People change their strategy based on taxes, political climate, unassociated news, etc. and these very real factors have to be considered in real time (and can sometimes trump charts).

Jeff
(Just some random thoughts)
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Post of the Day:
Macro Economics

The Future, or What's Left of It
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement