Friday, May 1, 2009

Technical Analysis

I keep asking @kevinfrey what he thinks of my ideas. I appreciate his input, but one of the ideas I mentioned keeps coming back up (in my head). Is there a market for technical analysis automation? Kevin thinks that everyone has the same setup, and there would be no need for a custom setup for each person (hence no need for automation). When I review the definition of support, for example, on wikipedia I get no time frame of reference from which to draw the upper and lower bounds. And that's my point. I have the hunch that everyone, no matter if they are short or long term traders, use different reference markers at different points in time for the same trade.

An example of this would be if someone looks at SPY would they choose the low to be at March 9th, or March 20th. Answer is that it depends on how far back they look. Having historical patterns to allow one to see, save, and adjust could allow them to perfect their technical analysis skills.

It would seem that this 'difference' in location of technical analysis indicators might account for the edge that others have. I envision storing all the past indicators, and the person could scroll backwards in time to see their past indicators allowing them to refine their skills. I guess this could be done now by writing down and drawing the indicators on notebook paper for lookup later. I also see people, maybe those who are more successful, trading patterns with their friends in a social platform. For example, I might not use but would like to see the technical analysis patterns used by @nickfenton, and he could share (or sell) them with me if we were friends (similar to the facebook status of friends).


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