gadee333 said:
The wonderful way of simple answers to simple and complex questions Traderji, via this Q & A.
Why most of the analysts fails to predict the downtrend/fall ?
Thats probably because most analyst are not professional traders and are unable to decipher the disinformation of the markets.
I could not find disinformation in my dictionary, but it is a term coined in the intelligence community and now in broad use. In intelligence parlance it means false information designed to mislead and confuse the adversary.
I am not suggesting that the markets have any volition or that there is a conspiracy among insiders to fool the rest of us. This is something that just happens because of the nature of markets.
William Eckhardt is one of "wizards" Jack Schwager interviewed for his book, The New Market Wizards. Eckhardt was the partner of mega-millionaire Richard Dennis. It was his bet with Dennis about whether trading skill could be taught that led to the formation of the famous "turtles." Eckhardt put it this way. "The market behaves much like an opponent who is trying to teach you to trade poorly."
A common formulation of this phenomenon is the concept of random reinforcement. Traders are not rewarded with a profitable trade every time they do something right, nor are they penalized with a loss every time they do something wrong.This makes it exceptionally difficult to figure out what is right and what is wrong. Compare this to an electric fence. Every time you walk by and don't touch it, you feel fine. Every time you touch it, you receive a painful shock. It doesn't take a man or animal long to learn how to relate to an electric fence.
Think how much easier learning to trade would be if you automatically took a loss every time you failed to follow correct decision-making procedures. At the same time, what if you were always rewarded with a profit when you traded correctly? You would be able to learn the correct trading rules much more easily.
