New Techniques  |  JUN 1999

Pseudo Securities For Technical Analysis by Charles E. Miller

Pseudo Securities For Technical Analysts As you develop your analytical skills, you probably pick a favorite market to study. So depending on the market, you could come to different conclusions about the value of different techniques of analysis. With that in mind, what if you used artificial data with distinct properties as a basis for learning the attributes of technical methods? In this, the first of a threepart series, we explore the notion of using pseudo securities. The objective of technical analysis is to locate securities with the necessary volatility to make potentially profitable round turns, and to predict, based on available historical data, suitable entry and exit points. Although the chart of the fictitious Omniscient, Inc. [OICT], shown in Figure 1 suggests it is a reasonable candidate, each technician will have his or her own approach to predicting price movements. Support lines, channels, indicators — which would be the correct tool?

by Charles E. Miller