First of all I am going to tell you that I am a stock trading idiot and proud of it. I have made millions of dollars trading stocks and I am blessed with the inability to understand the technical analysis of markets.
You should be happy that you are a stock market idiot because this fact may help you in making real money in the stock market.
Some of the smartest people I know are in the stock trading business and many are stock brokers and financial experts. I am going to let you in on a dirty little secret. Of all the forces in the economy that have caused people to lose money in the stock market, none have been greater than the advice of financial experts and brokers. There does in fact seem to exist an inverse relationship between intelligence and effective stock trading. It would seem that the smarter a person is that the more effective they are in finding ways to cause you to lose your money in the stock market.
It has been scientifically proven that the performance of stock brokers in picking profitable stocks could be replicated by having monkeys throw darts at a page of stock listings in the Wall Street Journal. So the first lesson for the wannabe stock trader is to plan to MAKE YOUR STOCK TRADING DECISIONS YOURSELF and stay away from those stock brokers in their pin stripe suits and shiny shoes.
AND STAY AWAY FROM TECHNICAL ANALYSIS, ALSO KNOWN AS WIGGLY LINE THEORY
You should also stay away from technical analysis. Technical analysis of market behavior is pseudo science and frequently promoted by snake oil salesmen disguised as brokers and other financial experts. Other technical analysis proponents include trading system vendors and trading system software companies.
For some brokers and financial wizards technical analysis is a kind of religion promoted to explain what otherwise cannot be explained about markets. It is the opium of stock market losers everywhere. I call it WIGGLY LINE THEORY.
For example, the proponents of technical analysis may tell you to buy XYZ stock when the 15 day moving average crosses the 45 day moving average and then take profits on your positions next year when the stock moves into "overbought" territory provided that the stochastic confirms the sell signal.
Hogwash and financial sophistry I say. Again technical analysis of market behavior is pseudo science and if you are really fascinated by the technical analysis of markets you might also consider the study of cloud formations. Both technical analysis and cloud formations have a kind of imaginative beauty to them and both can appear to have shape and meaning. But then as the market moves and the winds blow those shapes and meaning disappear and are soon forgotten. It is not a good idea to use technical analysis to determine where to put your money.
You may ask, "But all the financial experts use technical analysis and why can I not use this science to make financial decisions regarding stock market investment?"
This is my answer: In the simplest terms technical analysis is pretty useless, not because its math and formulas are flawed, but because the data it attempts to organize and make sense of is predominantly random. Short term stock market movement is predominantly random. It is difficult to make sense of random data no matter how sophisticated are your methods of analysis. It is garbage in and garbage out. The randomness of the markets defeats technical analysis along with the bravest and brightest financial experts and traders.
Be happy you are a stock market idiot. If you cannot understand it you can easily shut out the noise and not become unnecessarily confused.
MARKET MOMENTUM THEORY AND POOL HALLS...
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