Do Not Perform Brain Surgery With a Plastic Fork
I mean it when I say that. While plastic silverware is fine for picnics and parties, it is totally inappropriate in a surgeon's hand with an open brain in front of him. Not only are plastic forks built incorrectly to perform delicate surgery, their cheap construction may actually cause further injury to the patient. I don't know about you, but I sure wouldn't want someone prodding around inside my head with one of those things!
Ok, I'm joking. The truth of the matter is that you already knew that plastic forks were not meant to be used for brain surgery. It was obvious. In fact, it was so obvious that it seemed silly when I told it to you.
You might have even laughed.
But what if I told you that - right now - you are doing almost the exact same thing as a surgeon operating with a plastic fork? Something just as inappropriate and just as harmful from a financial point of view. I'm not joking any more. Let me tell you what I mean.
Your current charting software probably has a bunch of technical indicators built into it. Moving averages, RSI, Stochastics. There are hundreds of them. Thousands of traders rely on these tools every day to help them make investment decisions. (And thousands of traders blow out their accounts each day, too.) What these traders probably don't realize is that if those tools were people, they would be dead by now.
Yes, those indicators are old. In fact they're dinosaurs. They were invented in the days before computers even existed. Even before calculators were around! They were designed to be calculated by hand, using simple formulas and daily closing prices. Add some numbers up and divide by something else. Any elementary school student can easily calculate any of those indicators in only a few short minutes. We're talking kindergarten math here.
Modern Technology
With today's trading computers running at Gigahertz speeds, don't you think that it's time traders started using some more advanced formulas in their trading? There's no reason to keep things so simple anymore. We've got the speed and the power to calculate anything we could possibly ever want to, so why are all these charting programs stuck with the caveman tools?
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