Why Technical Analysis?

When:  Mar 25, 2023 from 10:00 to 12:30 (ET)
Associated with  AAII Cleveland Chapter

Market prices are not derived from any fundamental attributes, but rather from the opinions of market participants about the future prospects of that security.  Forecasts of prices are actually lagging indicators.  TA creates a context for viewing and understanding current market behavior, which is most useful for trend-following strategies [aka early detection coupled with fast-following techniques].  

Price moves in multiple nested cycles, with longer cycles serving as carrier waves for shorter ones.  The single most important issue in trend-following is to sharply minimize the impact of major market tsunamis.  Everything else pales by comparison. 

Reliability of behavioral patterns increases exponentially as time frame increases.  When viewing cyclic time-based data, essential to focus on changes of direction (features), instead of price per se.  To insure representative view, need observation time intervals ~20 times the length of the cycle of interest, which corresponds to a feature count of ~20.    


You will learn:

  • Why all forecasts are actually lagging indicators of market behavior.
  • Why context is critical to the understanding and utilization of market data
  • How trend-following, coupled with early detection techniques, can provide a sound strategy for investing.


Disclaimer:  This talk should not be construed as investing advice, but rather as an exploration of ideas and techniques that people might consider in making their own decisions.  Individuals are all times solely responsible for their own investing decisions, actions, and results. 


Westlake Porter Public Library
27333 Center Ridge Rd
Westlake, OH 44145
Online Instructions:
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Dennis Lewis