An excerpt from an email from Hayden to the LinnSoft Yahoo Group on 03/26/02

Toby,

Had to sleep on your last post to see the originality of your question.  Do statistics and TI's lie? I'm going to narrow the field to the TI's in IRT, and take the contrarian's view, they don't lie, they cannot lie because they are based on the data.  They are certainly incomplete when we most need them, when we want to peek around the time corner and be assured that the trend will continue, but that is insufficient data, not a lie. They can also give false signals - trend looks like it is going to continue and it doesn't, but that is our fault for projecting and assuming. The data is not lying.

And we may have not refined the parameters of the TI enough to fit our needs. The periods we are using may be overshooting or undershooting, too many spikes or not enough, too broad or too specific. Using a 200 and 50 MA for day trading is like using binoculars to read the fine print. The converse being equally true, too fine a reading ignores the larger picture.

For what it's worth: as a day trader I ignore what a stock has done the day before because it doesn't tell me enough to make a call. Other day traders select their candidates the night before.

Here's some fresh stuff to kick around:
Technical indicators should corroborate each other, a trend in one should be a trend in another, just presented in a different manner. Is that incorrect? I haven't explored enough to say. One vital qualification, the parameters need to be similar for a fair comparison. Reminds me that there are even a couple of TI's that use other TI's as a basis.

Graphic reading skills, seeing signals faster and more precisely - that's what I would like to practice. As a painter one of the big lessons to learn is when is the painting is finished. It takes a long time to recognize that moment. Now it is second nature for me, although someone standing next to me could well wonder how I know (hope this doesn't sound like boasting, it's just to make the point of one specialized skill).  Women can look through hundreds of dresses and spot the one for them, even though they could not define exactly what they were looking for until they saw it. Is that sexist? I don't know.  I have to be dragged into shopping for new clothes.

Regards,
Hayden