Technical Analysis not working
"You cannot just read one book and some articles on Technical Analysis and some indicators and expect to be an expert and everything to just start falling into place and give you signals that will tell you when to buy and sell with precision and massive profits all the time.  It is like someone reading a book on how to drive a car and then expecting to drive flawlessly the first time they sit in the driver's seat, or someone reading a book on brain surgery and expecting to be able to operate on a live patient the next day. It looks like you are using 3 or 4 indicators to get daily buy and sell signals on a daily chart for an EFT you're looking to hold for decades. So firstly you are using short term indicators for a long term outlook. You need to decide what timeframe you plan to hold your investments for and use chart periods and indicators that suit that timeframe.  Secondly, each indicator can be used in a number of ways and the settings you use for each indicator can determine whether you get earlier or later signals. Also, you need to work out which indicators work well together and are complementary, compared to those that don't work well together and give conflicting signals. All this information will come together for you the more you read about and practice the art of Technical Analysis. If your timeframe is very long-term (decades) I would be using mainly a weekly chart, with a longer period MA, the ROC indicator and possibly some trend lines. Keep it simple. The price itself is very important too. You can determine when a trend is starting or has ended purely using the price. The definition of an uptrend is higher highs and higher lows, so on the weekly chart if there is a lower high followed by a lower low - this could be the end of the uptrend. If we get a lower low followed by a lower high - this again could be the end of the uptrend. These could be a good time to start getting cautious and maybe looking to sell. If you are using stop losses (which I recommend) this may be a good time to tighten your stops. Similarly, a downtrend is defined as lower lows and lower highs. If we get a higher low followed by a higher high it could be the end of the downtrend and maybe the start of an uptrend. This could be a good time to start getting ready to buy. You need to learn about how and where to set your buy and sell orders (including stops) and whether you wait for confirmation when you get a signal. All this takes some time, but the more you read, the more you attend live events and the more you practice the more they will become second nature. In order to get the best out of Technical Analysis you will need to learn, plan, practice and execute. A good book to help you prepare your trading plan is ""Smart Trading Plans"" by Justine Pollard. One of my favourite books is ""The Complete Trading Course - Price Patterns, Strategies, Setups, and Execution Tactics"" by Corey Rosenbloom. And another good book is ""Trade your Way to Financial Freedom"" by Van Tharp." I would echo @Victor's comments. One book and 1000 web pages doesnt make you a good investor/trader. There are some basic things you should be aware of and read up on There are a few books that I would recommend I have been trading for over 10 years, my dad for over 30 years and we are both continually learning new things. Don't read one book and assume you know it all. Bear in mind that there are always new indicators being thought up and new ways of using and interpreting the same information, so keep reading and educating yourself.
It depends on whether you want a career as a fund manager/ analyst or if you want to be an investor/ trader. A fund manager will have many constraints that a private investor doesn’t have, as they are managing other people’s money.  If they do invest their own money as well they usually would invest it differently from how they invest the fund's money. Many would just get someone else to invest their money for them, just as a surgeon would get another surgeon to operate on a family member. My suggestion to you is to find a job you like doing and build up your savings. Whilst you are building up your savings read some books. You said you don’t know much about the financial markets, then learn about them. Get yourself a working knowledge about both fundamental and technical analysis. Work out which method of analysis (if not both) suits you best and you would like to know more about. As you read you will get a better idea if you prefer to be a long term investor or a short term trader or somewhere in-between or a combination of various methods. Now you will start to get an idea of what type of books and areas of analysis you would like to concentrate on. Once you have a better idea of what you would like to do and have gained some knowledge, then you can develop your investment/trading plan and start paper trading. Once you are happy with you plan and your paper trading you can start trading with a small account balance (not more than $10,000 and preferably under $5,000). No matter how well you did with paper trading you will always do worse with real money at first due to your emotions being in it now. So always start off small. If you want to become good at something it takes time and a lot of hard work. You can’t go from knowing nothing to making a million dollars per year without putting in the hard yards first. "I think this gets at why some of us are becoming concerned about the volume (or more importantly the portion) of HFT in capital markets these days. You have algos trading based on ""technical trends"" which are increasingly just the behavior of other algos. Rinse and repeat. At a certain point it just becomes a feedback loop.  Now, I agree that there's no reason to be scared of HFT simply because its new or fast, which is what I think threatens a lot of people. But the problem is that the economic and social utility of markets arises from their being information aggregation engines. If it gets to the point where most of the price action is driven by algos which are trading solely based on a few minutes of technical data, no new information is being contributed to the price discovery process.   Now, it may be that a certain amount of ""meta-information"" can be discovered from pattern analysis of short term technical history. But it seems to me this information is more limited in both quality and quantity compared to the information inputs of thoughtful humans acting on a reasoned analysis of economic and other world events." "If you're a good candidate in terms of all the usual metrics then it will really come down to selling yourself to any potential advisers. Remember that in PhD admissions individual professors are really making the admissions decisions.   Also, as you said you're from an econ background.... Unsurprisingly, mathematical finance is going to be pretty ""mathy."" If you haven't had courses in real analysis, differential equations, Fourier analysis, and statistics you may want to brush up on those subjects. I say this because I am doing a PhD minor operations research (coming from a mechanical engineering background) and I have been overwhelmed at times by the level of technical rigor that they take in these courses relative to my ""normal"" engineering math courses. I would have been well served studying some real analysis before taking stochastic calculus, for instance." I recall the name Martin Pring. As my fundamental analysis book from grad school was the work of Graham and Dodd titled Security Analysis, Pring was the author of the books I read on technical analysis. If you've not read his work, your education has a ways to go before you hit the tools. Trading error at Citi "No one is quite sure what happened (yet).  Speculation includes: The interesting thing is that Procter & Gamble stock got hammered, as did Accenture.  Both of which are fairly stable companies, that didn't make any major announcements, and aren't really connected to the current financial instability in Greece.  So, there is no reason for there stock prices to have gone crazy like that.  This points to some kind of screw up, and not a regular market force. Apparently, the trades involved in this event are going to be canceled. Edit #1: One thing that can contribute to an event like this is automatic selling triggered by stop loss orders.  Say someone at Citi makes a mistake and sells too much of a stock.  That drives the stock price below a certain threshold.  Computers that were pre-programmed to sell at that point start doing their job.  Now the price goes even lower.  More stop-loss orders get triggered.  Things start to snowball.  Since it's all done by computer these days something like this can happen in seconds.  All the humans are left scratching their heads. (No idea if that's what actually happened.) Edit #2: IEEE Spectrum has a pretty concise article on the topic.  It also includes some links to follow. Edit #3 (05/14/2010): Reuters is now reporting that a trader at Waddell & Reed triggered all of this, but not through any wrongdoing. Edit #4 (05/18/2010): Waddell & Reed claims they didn't do it.  The House Financial Services Subcommittee investigated, but they couldn't find a ""smoking gun"".  I think at this point, people have pretty much given up trying to figure out what happened. Edit #5 (07/14/2010): The SEC still has no idea.  I'm giving up. :-)" From my 15 years of experience, no technical indicator actually ever works. Those teaching technical indicators are either mostly brokers or broker promoted so called technical analysts. And what you really lose in disciplined trading over longer period is the taxes and brokerages. That is why you will see that teachers involved in this field are mostly technical analysts because they can never make money in real markets and believe that they did not adhere to rules or it was an exception case and they are not ready to accept facts. The graph given above for coin flip is really very interesting and proves that every trade you enter has 50% probability of win and lose. Now when you remove the brokerage and taxes from win side of your game, you will always lose. That is why the Warren Buffets of the world are never technical analysts. In fact, they buy when all technical analysts fails. Holding a stock may give pain over longer period but still that is only way to really earn. Diversification is a good friend of all bulls. Another friend of bull is the fact that you can lose 100% but gain any much as 1000%. So if one can work in his limits and keep investing, he can surely make money. So, if you have to invest 100 grand in 10 stocks, but 10 grand in each and then one of the stocks will multiply 10 times in long term to take out cost and others will give profit too... 1-2 stocks will fail totally, 2-3 will remain there where they were, 2-3 will double and 2-3 will multiply 3-4 times. Investor can get approx 15% CAGR earning from stock markets... Cheers !!! You may refer to project http://jstock.sourceforge.net. It is open source and released under GPL. It is fetching data from Yahoo! Finance, include delayed current price and historical price.