| As a first year Finance MBA student, you almost | | | | time limited and worked only for a certain period |
| automatically learn to adopt an academic point of | | | | of time. At the end of this time the technique |
| view regarding technical analysis tools. Technical | | | | stopped working and stopped generating profit. |
| analysis has never been proven as an accurate | | | | The academic explanation for that was that when |
| trading system that generates continuous success | | | | the knowledge of such successful technical |
| percentages over time. As a matter of fact, no | | | | analysis method has been widely spread at the |
| other trading system had been reported as one. | | | | markets, the currencies prices had to reflect the |
| The controversy between the academy world | | | | method forecast in a matter of seconds, because |
| and the traders' world come down to the | | | | all the traders acted the same way as soon as |
| following: the academy claims that no evidence | | | | they got the signal. That is the main explanation |
| had been found to support the fact that technical | | | | of why some methods worked only for a limited |
| analysis can provide high percentage success | | | | period of time in the past. |
| signals in order to provide profits over a long | | | | That approach still does not answer one of the |
| period of time. The traders claim is: how come so | | | | basic questions we have: |
| many people and the whole industry are circling | | | | - How come there are some firms (well known in |
| around technical analysis for no reason. | | | | the industry), that hire a full employee stuff in |
| I'd like to shad some light in order to explain | | | | order to trade (many of them are daily traders) |
| better that the difference between the | | | | with their own portfolio. It will be safe to assume |
| approaches is not as it looks like from first glance. | | | | that these companies' existence is solely depends |
| What most academic researches don't really | | | | on their ability to provide profitable trading over |
| emphasize is that there are numerous academic | | | | time. |
| thesis studies that had proved statistically that | | | | - It is unknown if there are companies that are |
| there are cases of proven success of few | | | | able to adjust a different trading strategy on the |
| technical analysis techniques that provide profit | | | | different time periods. |
| over a certain period of time. The success was | | | | |