thanks for the link, i watched the whole webinar, it was very tempting to skip at times, but i have not.
As i spent 52 minutes of my weekend watching the video, please allow me to be skeptic about it!
The webinar simply proves what Peter Lynch said "charts are great for predicting the past"! Dont you agree that all the talking was about the past? How about the future? When you claim that you predict the future, isnt it reasonable to expect you to talk about the future and allow us to see how valid your claims are??!!
Isnt it reasonable to ask if he could predict the future that accurately, why Bill Gates still the richest in the world? Well he was honest enough when he mentioned in the video that he get it right three out of five times. I know a lot of traders who can do better than that without using T/A at all.
Dont you agree that two analysts might interpret the same chart in two different ways and come up with two completely different predictions? Dont you know that Friedrich Nietzsche said "there are no facts, only interpretations".
He made me laugh when he claimed that fundamentals come out in the charts first.lol, which comes first in your opinion: the chicken or the egg? or have people caused the GFC or got affected by it?
Burton G. Malkiel, an economist professor at Princeton University and writer of A Random Walk Down Wall Street, performed a test where his students were given a hypothetical stock that was initially worth fifty dollars. The closing stock price for each day was determined by a coin flip. If the result was heads, the price would close a half point higher, but if the result was tails, it would close a half point lower. Thus, each time, the price had a fifty-fifty chance of closing higher or lower than the previous day. Cycles or trends were determined from the tests. Malkiel then took the results in a chart and graph form to a chartist, a person who “seeks to predict future movements by seeking to interpret past patterns on the assumption that ‘history tends to repeat itself’”. The chartist told Malkiel that they needed to immediately buy the stock. When Malkiel told him it was based purely on flipping a coin, the chartist was very unhappy. Malkiel argued that this indicates that the market and stocks could be just as random as flipping a coin.
I am surprised that you have not heard about the random walk theory. I am not implying that its the only theory out there, but it has been adopted by a group of reputable and respectable academics. I am not sure if the guy in the video hold a degree!
Finally, i dont take the random walk theory to an extreme, and i believe that charts can help us to identify trading opportuinities.
FKP Price at posting:
62.5¢ Sentiment: Buy Disclosure: Held
