Yafit

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Tue Jan 8th 02:24 AM | Rating: 0 0
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Why Technical Analysis is Nonsense

I was a sell-side fundamental analyst (tier-1 clients), and a portfolio manager before that. To summarize your logic, it is basically:
1. hedge funds provide amazing returns
2. hedge funds don't use TA.

My summarized answer:
1. hedge funds use extensive leverage so when the markets rise (and they have done so year after year in the last few years) then the hedge funds have multiple return as the market.
2. tier1 hedge funds are extremely large, and can't use TA to manage such portfolios even if they wanted.
3. pointing to the successful hedge-funds and saying "see, they don't use TA" is exactly like pointing to the most successful traders and saying "see, they don't use fundamental".
4. smaller hedge funds do intra-day trading and they DO use variations of TA (in addition to statistics etc), but certainly NO fundamentals.

my 2cents.

p.s. see gstock.com - you might be surprised.
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