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asked what the man did for a living and my friend told me he made his living "trading commodities." Over the years, this old gentleman has given me countless letters, papers, and handwritten manuscripts (all written from the late 1800s to just about the end of WW II) that he collected from his correspondence with other successful traders that he knew (the equivalent of today's newsgroups on trading, I suppose). He did not like the "new" approach to trading (mathematics-based and/or computer-derived) or the new "fake" commodities being traded (nationalized debt and stock baskets). |
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Every time I read someone making these points that indicators don't work or chart formations are statistically invalid, I shake my head. To the people performing those tests and making those points, they may be useless. But if a trader can use them and use them to make money, does it matter what someone else's statistics say? Remember, the world was thought to be flat for many centuries and that the galaxies revolved around the earth. Are we too "sophisticated" and knowledgeable now to make those errors in "truth?" Perhaps acupuncture is just mumbo jumbo that has been used for well over 2000 years in China. Or perhaps it produces its effects by manipulating something that we don't yet understand, as a recent set of studies by several physicists in the U.S. reported. |
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I'll end this long post by revealing that I don't use indicators in my trading. I haven't found any that I "trust." That doesn't mean I don't look at them as others show me how they use them. Nor does it mean I doubt that others make money using indicators. I keep refining my own techniques, adding a bit here and there. One man's random walk may be another man's indicator. They are only tools, and if you gave a wrench to a caveman, I doubt he would use it as you do now. |
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Best, |
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Tim Morge |
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