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Old 01-29-2011, 01:57 PM   #3
alnorth alnorth is offline
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Join Date: Dec 2002
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Technical analysis, charts, etc do not work. At least not in a vaccuum applied to all stocks where you are not really knowledgable about the companies and are just trying to mechanically follow rules.

Hundreds of trading systems have been academically studied and they do not perform better than what could be expected through random chance.

In the unlikely event that some magic trading rule were discovered that did work, he sure as hell would not tell anyone. As soon as a rule is widely known, it immediately stops working because there would obviously no longer be a market inefficiency to take advantage of. So, anyone purporting to sell such a rule or trading system designed to make money is either ignorant, or a fraud trying to take your money.

You either need to spend far more time than its likely worth each week studying companies, analysis, and financial statements to figure out an active trading move, or you should broadly diversify into hundreds of stocks (probably through ETF's or mutual funds) and rebalance every once in a while.
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