History’s Hiccups
Seasonal patterns are like navigational systems in cars. They provide a general sense of direction, but sometimes, they tell you to turn left and drive off a cliff. The same is true of technical analysis. Everyone looks at charts to see what happened in the past so they can better understand the present and future. But no one bets it all on technical analysis trading signals. Why? The past can be an unreliable market indicator. There is a colorful saying among traders that all ships at the bottom of the sea are filled with charts. It is also true that lots of ships without charts sank because they ran into stuff they didn’t see. The important fact to remember about patterns and seasons is that they are tools investors should use—but not be used by.
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