by ANTHONY WARREN PH.D.
In this initial article the author will describe his viewpoint on technical analysis and the value of
computer based algorithms for enhancing one's chances of success in stock or commodity trading. We
will also outline a planned series of articles covering topics such as Fourier Analysis for Fun and Profit,
Data Filtering for the Masses, Do Trend Channels Really Exist?, and The Threefold Path to Forecasting.
(Titles are Fictitious)
The main problem of trading is in developing systematic rules for managing the unpredictability of the
marketplace. Since price fluctuations invariably contain a random component, there is no analytic method
or system which will guarantee success on any single, individual trade. Rather, one must be content with
trading methods that optimize one's chances for success on the average. Thus, security trading is very
similar to that of playing a game of chance. An experienced bridge player, for example, will always bid a
given hand in the same way, even though a bid may succeed one time and fail another, due to the
distribution of the remaining cards.