My trading journal

I'm maintainig a journal of my trading activity, and so my writing time and energies have been going into that instead of my blog. Here's a sample:

Before I get back to discussing the buyers and sellers in the future markets, I should review this Fibonacci number thing. Fibonacci was a Pisan whose father worked as a customs oficial in Algiers. The young man observed that mathematics was a lot easier using Arabic numbers than using Roman numerals. When he returned to Europe he promoted the use of the Arabic system. He was also a mathematical theoritician and in a book published in 1302, one of the problems he posed was a question about how many pairs of rabbits would be bred over a period of time starting with one pair of rabbits. The formula he devised [F(n) = F(n-1) + F(n-2) for n = 3, 4, 5, ..]produced the series of values, "1, 1, 2, 3, 5, 8, 13, 21, 34, 55, ...," The Fibonacci series reportedly has been observed in a lot of natural phenomena so mathemeticians continued to tinker with it. One tinkerer observed that if you divide one number in the series by the previous number in the series you get 1.618034. This becomes observable when you get out to the seventh and eight number of the series, but then this number continues to be the answer for every such calculation. As I said Fibonacci series are found in botany, biology, architecure, and music, so eventually someone tried to apply it to market activity. It appears that .618, its inverse .382, .236 (the difference between .618 and .382), .764, thw additive inverse of ,236 and .500 are levels within the range of a market high and low where retracements occur. I don't believe the Fibonacci "Golden Number" has any occult powers. But the retracement pattern seems to work so I refer to them.

Even more esoteric are the Gann squares, which I'm not ready to tackle yet, but which we will discuss soon.

I guess in this connection I should also reiterate that I dont think technical analysis has predictive powers. What I think is that in the fog of battle it tells you who's winning at the moment. Last night before I went to bed with gold rising over 674 it appeared that the bulls were winning, but the technical anlysis said we should be in retreat, and today as the price fell by $12 I appreciate the negative messages the charts were providing. (My apologies to Harry Roberts, my statistics professor at the U of C whose analysis of market activity repudiated teschnical analysis, and gave rise to the "random walk" theory.)