No prediction, just technical probabilities. The very experienced technician Louise Yamada follows what experienced technicians Ralph Alcampora and Bert Doeman interpretating a sustain US market bull, Treasury yields rising and how gold can turn.
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http://finance.yahoo.com/blogs/breakout/buyer-beware-weekly-sell-signals-threaten-rally-says-133058130.html
Eh? She just came out with a ‘mixed, or even downright bearish’ outlook in May 2013. Bull-bear flip in just 3 months??
You have to understand it is a prediction of probabilities. What she indicate was right on. She came up with some very fundamental directions that it could take and what check marks that we can look to for indication.
Its like value investing. you use historical checkmarks. If tomorrow there is a fraud and then you sell, are you flip flopping?
No! you are basing on how much knowledge you can secure. And at times your risk management is limited.
The perspective of the 10 -20 year chart 3 months ago and now are very different.It is an important inflexion point.
but of course the deep value investors will say they are flip flopping their arcane art.
But the problem comes with the odds of that prediction happening. If these indicators have probabilities of very close to 50%, or less than that, then there’s really no use – aka, it’s random luck.
I don’t know the exact statistics on the odds of the predictions coming true though.
50% no use? hmm… 50% is really a good odds. That is what technicians based on. Talk to some of them. 50% is really good odds.
Hmm.. but 50% is a coin flip. I.e, you’ll just as likely win as to lose on any given trade and any given day.
If chart reading does not give the technician any better odds of picking a bull or a bear than a coin-flip, he could just flip a coin??
Are we on the same page regarding probabilities?
haha… Smart guy like you should be able to figure out how a 50% can end up being so profitable.
almost all the top traders usually work on a 40-45% success in each trade.
http://www.learntotradethemarket.com/forex-articles/why-winning-percentages-are-irrelevant-in-trading