Page 91 - THE MARKET WHISPERER

THE MARKET WHISPERER 89

money in. The dream of money working for you is not realistic, and in
best-case scenarios, works solely during occasional periods that can be
pinpointed only in retrospect.

In short: no one is prepared to work on your behalf! If you want to earn
profits, you need to press those buttons yourself. Learning is the key to
success. This book is just one part of the process.

Science or Art?

There are four ways to reach a decision on transacting in stocks:
• Technical analysis, which is how traders operate
• Fundamental economic analysis, the method for long-term investors
• Random walk, the mode of operation for those who claim there is no

method
• Gambling, the method used by the public which thinks it’s found “the

formula” for turning a profit
Stock trading is not an exact science. If it were, it would be handled by
accountants. No method is complete in and of itself. Even if you learn a 300-
page manual on technical analysis by heart, I can assure you that you’ll still
lose money. The winning recipe is a combination of winning components.
The question then becomes: how do I proportion the components? That
differs from one execution to another, from one stock to another, from one
set of market conditions to the next. Getting the proportions right is, in
fact, the art of trading. Stock trading is midway between an exact science
and art.

Who’s Afraid of Technical Analysis?

Sometimes the very title of a specific field causes people to fear it and feel
alienated from it without even knowing that field’s content. Too often this
is the case with the phrase “technical analysis.”

SMART Technical analysis is based on observing past behavior for
MONEY the sake of predicting the future. Technical analysis is based
on outcomes and not on reasons.

The word “analysis” indicates a review process that closely studies the
details, and often conjures up someone deeply engrossed in meticulously
examining mounds of books, articles and papers. The word “technical”
generally indicates a practical, mechanical sphere, conjuring up images
of engineers in white lab coats bent over blueprints or a complex piece