exp system

[exp]

The case against technical analysis:
http://www.supertraderalmanac.com/censorship/technical_analysis_deemed_fraud_.htm

According to the government, "[R]espected scholars are virtually unified in their recognition that even the most legitimate technical systems (with their hypothetical and retroactive foundations) are incapable of providing the trader with any significant market advantage."

"The efficient market capital model emphatically contests the notion that financial markets are so inefficient that speculators can exploit these markets' inability to adjust to all types of information. Although the limits of the efficient capital market model, and its implications for regulatory policy, are a dependable source for endless debate, few dispute the model's general predictive powers. In fact many important regulatory policies are predicated on the model's accuracy.

"Virtually the entire economic community is in agreement, however, that the efficiency of the market is sufficiently strong so that all publicly available information is rapidly disseminated and is then almost instantaneously reflected in the price for any widely traded investment contract. As a consequence, investor analysis of specific investment contracts will not lead to superior gains, since it will require an analyst to predict value better than the market as a whole. Thus, while some traders will profit while others will lose,
the outcome of speculative investment is unlikely to significantly outperform chance. See Dennis, Materiality And The Efficient Capital Market Model: A Recipe For The Total Mix, 25 Wm. & Mary L. Rev. 373 (1984); Posner, Economic Analysis of Law, Ch. 15 (4th ed. 1992); Comment, The Efficient Capital Market Hypothesis, Economic Theory and the Regulation of the Securities Industry, 29 Stan. L. Rev. 1031 (1977); Fischel, Use of Modern Finance Theory in Securities Fraud Cases Involving Actively Traded Securities, 38 Bus. Law. 1 (1982); Lorie & Hamilton, The Stock Market: Theories and Evidence (1973); Fama
(1970)."

"Technical analysts . . . first make a deterministic (one might say spiritual) leap of faith that non-random price patterns exist. They then illogically posit that these patterns, once revealed to the few (or indeed -- through marketing -- to the many), may be successfully exploited in trading. To accomplish this, of course, the 'pattern' must remain undetected by others (otherwise the increased market activity defeats the 'pattern' by driving the price to a point where speculation is no longer profitable). See Marshall (1989) at 263-264. Public policy presumes that markets are not so witless. 'The presumption is [] supported by common sense and probability [as] recent empirical studies have tended to confirm Congress' premise that the market price of shares traded on well-developed markets reflects all publicly available information . . . '

The author of this text:
http://www.supertraderalmanac.com/censorship/technical_analysis_deemed_fraud_.htm
is Frank Taucher (First Place Winner of "The $40 Million Investment Challenge" for having produced the highest verifiable investment return, 1980 - 1993, as reported in "Forbes" magazine and "The Wall Street Journal"):
http://www.supertraderalmanac.com/