Quote from Specul8r:
Reading Vic, you would think you can't make money using a chart as your primary medium though, which imo is ridiculous. Implying that charts are somehow useless is parallel to implying that markets are not moved by crowd psychology and supply/demand.
Yes Vic, charts are laced and embedded with deceit, but so is the market; for if it were anyother way, she would not eat up 90% of the participants that engage in action. the best speculators have learned to deceive the deceivers...
If it was only Vic it wouldn't be a debate, the problem is that "modern" quants (especially Fama & so like of Chicago Business School) which dominate today the schools of economics since 30 years think so but this was not always the case see below so as posted in another thread
A summary of EMH by economists
http://cepa.newschool.edu/het/schools/finance.htm
homepage of the "HISTORY OF ECONOMIC THOUGHT"
http://cepa.newschool.edu/het/schools/aea.htm
http://www.elitetrader.com/vb/showthread.php?s=&threadid=25863
"The Working-Cowles-Kendall empirical findings were greeted with horror and disbelief by economists. If prices are determined by the "forces of supply and demand", then price changes should move in particular direction towards market clearing and not randomly. Not everyone was displeased with these results, however. Many viewed them as proof that the "fundamentalist" theory was incorrect, i.e. that financial markets really were wild casinos and that finance was thus not a legitimate object of economic concern. Yet others crowed that it proved the failure of traditional "statistical" methods to illuminate much of anything. High-powered time series methods were used by Clive Granger and Oskar Morgenstern (1963) and Eugene F. Fama (1965, 1970), but they came up with the same randomness result."
So whoever doesn't agree with this school of thought at least without heavy arguments would be easily dismissed (I don't agree with them and have such heavy arguments but it requires much subtilities to understand) and I remind you that CFTC even used the quants arguments to say that TA is FRAUDULENT
!
http://www.elitetrader.com/vb/showthread.php?s=&threadid=18551&highlight=CFTC
"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 . . . ' Basic, 485 U.S. at 246."
(note 75, page 41)"
"[A]ny marketer's claim of increased profitability or reduced risk
through the use of these systems is likely to be fraudulent". (note
75, page 41)
.