Chapter 20

Ten Ways the Market Has Changed

In This Chapter

Realizing that human nature doesn’t change — but markets do

Overcoming fear of the math monsters

Nearly all the basic observations about technical analysis in this book could as easily have been made a hundred years ago as today, except for references to personal computers and software. Pioneers such as W. D. Gann, Richard Wyckoff, Richard Schabacker, and Charles Dow, all from the early 1900s, would have recognized just about everything I mention here.

And yet . . . the markets have changed in the last five to ten years. They changed in ways that traders could pretty much foresee, but still struggle to understand and adapt to them. Much of the change arises from technological advances and from the new prominence of math whizzes who are able to harness technology in ways mere mortals like myself can barely grasp. But fear not — these changes do not wipe out the opportunity for regular folks who are not math whizzes to trade profitably by using technical analysis. In this chapter, I not only point out what changes are occurring, but also give some advice for navigating these advances in the market.

Technical Analysis Is Universally Accepted

In 1980, traders viewed technical analysis largely as an oddball or even crackpot backwater of investment theory. The explosion of interest in technical analysis since then can be attributed to numerous forces, including

The failure of fundamental-based advisors and managers to deliver ...

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