FinancialAdvisor's College Class (FACC)

[nlightn]

ilovedastock - i agree with you,... and there are some very deep wallets out there that in fact assist in creating the estimates. case in point,...

a well known technical analyst who uses point and line, after a string of bad investments, was told to go back to the bacics and get a handle on what is going wrong. see,...this analyst just found out that even though he can analyze the markets he was not a good trader. so he put his resume out there and got hired by a large brokerage house.

one day he had the fortune of sitting with a semi-retired of the board/master trader of the firm. this man didn't know much about technical analysis because he never needed it to make money on the floor. but he no longer traded on the floor and found the transition from floor to computer screen a little challanging. so he asked the firms newly acquired star technical analyst to sit with him during the trading day and teach him technical trading. the new hire jumped at the opportunity to show off his abilities to such a experienced and successful trader.


the technical analyst began showing the the trader the major support and resistance points of the soybean market, that they were watching, and the market happened to be trading between these two points. as the technical analyst explained to the chairman the signifigance of these two points, he stated in a very emphatic, almost absolute term that if the market goes up to resistance, it will stop and reverse; and if the market goes down to support; it will also stop and reverse. then he explained that if the market went down to the price level he calculated as support, his calculations indicated that would be the low of the day.

as they sat there, the soybean market was slowly trending down to the price the analyst said would be suppoort, or low, of the day. when it finally got there, the chairman looked at the analyst and said, "this is where the market is susposed to stop and go higher, right ?" the analyst said, " absolutely, this is the low of the day. " the chairman said, " thats bullshit !"

the chairman then said "watch this." the chairman picked up the phone and said, "sell two million beans at the market." within thirty seconds after he placed the order, the soybean market dropped .10 per bushel.

the chairman turned and looked at the shocked expression on the analyst face. he then calmy said,..." now, where did you say the market was going to stop ? if i can do that, anyone can. any one person can change the direction of the movement and if enough agree on that movement you have a movement in strength that will move past any analysis you can provide."



-----------------

so it doesn't matter what we think,...and if we are so sure that what we think is right,... well the market will educate us quickly. its called being on the wrong side of the trade which equals you lost your investment.