Stock Bond

These, then, are some of the objections to technical analysis. On the positive side, however, technical analysis attains its strength from the fact that it is a form of disciplined and essentially mechan-

ical application of trading rules. In its ideal form, technical analysis leaves little or no room for interpretations of trading signals. In this way, it permits discipline to regulate trading. Naturally, these are ideal concepts and their application is most certainly dependent on the individual. Some advantages of the purely technical approach are these:

•  Objectivity: The technical approach, in ideal form, is objective
and specific. It is akin to scientific methodology. Objectivity
minimizes the possibility of trader error prompted by emotional
decisions.

•  Specificity: The technical approach looks for specific indica
tions from the data and then acts upon them. Hence, there
should be little or no room for interpretation in a purely tech­
nical method. Decisions are objective and therefore reflect a
quasi-scientific methodology.

•  Mechanical: Many technical analysts claim their approach is
totally mechanical. In other words, no extraneous information
goes into buying/selling decisions. The system makes all the
judgments and the trader follows them mechanically (if the
system is implemented in its ideal form).

•  Testable and verifiable: All results and indicators can be tested
and verified historically. This makes the approach more scien­
tific and lends credence to its use and value.

•  Consistency and reliability: The technical approach should
yield similar results regardless of who is using the system, pro­
vided their rules are the same.

•  Ease of implementation: By virtue of the above, technical sys­
tems are claimed to be easier to implement than are funda­
mentally based systems.

•  Computer application: Recently, the advent of lower-priced
personal computer systems has made technical systems even
less difficult to test and employ. Most of the truly mechanical
systems can be programmed into computers, which will gener­
ate all buy and sell signals accurately. Computers can be pro­
grammed to send the signals to a broker for execution.

Much can be said in favor of technical analysis. However, with the growing ability of computer systems to develop and implement com­plex econometric models, fundamentally based computer models will most likely have a more pronounced impact on futures trading, particularly on SSFs. The result could very well be a hybrid approach that yields better performance than each method alone. This, however, is not yet the case. Whether technical, fundamental, or technofunda- mental, the ultimate action taken by the speculator will determine the success or failure of any trading system in SSFs, regardless of how promising computer tests of the system may be. Ideal situations are subject to the limitations of the weakest link. The trader is that link.

I What's Best for You

I've observed that individuals who adhere strictly to one approach or another can do well in their trading. However, individuals who constantly shift from one technical approach to another, from one fundamental approach to another, or from an essentially fundamental point of view to a technical point of view will probably not do well because they don't allow sufficient time for their trading approach to reach fruition. My advice is to find one system or method and to stay with it.

The answer to the question, What's best for you? is not a simple one. After years of analysis and study, I can tell you that virtually any systematic approach to futures trading can be successful, provided that it contains the following three essential elements:

free stock trade ~ stocks
bond stock ~ forex investing
trade stock online ~ futures brokers
bond stock ~ microsoft money