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A vast population of technical traders, using a multitude of technical systems and methods, have had a real impact on the way many markets trade today. Technical methods are "discovered", used, over-used, and discarded, only to be reborn at a later time. The validity of any single technical method is dependent upon its position in that cycle. Widespread use of a method will often by itself cause that method to work for awhile. Once it becomes over-used the markets seem to adjust, and the formula loses validity: its effectiveness approaches 50%.
No single technical formula works all the time. Often, however, multiple technical points will converge in a given area, giving this area greater technical validity than any individual point.
Also, with the advent of easily available computing power, all of these formulas can be easily and continuously tested for current validity and weighted against other methods, thus giving a higher probability signal than any individual technical formula might provide. By calculating and displaying a multitude of commonly used technical points on a price line, one is able to see clearly and quickly any areas of congregation of likely technical activity. Also, by letting the computer test all the signals for near term validity, determine the appropriate weighting factor for each, and display those significant areas on the same price line, one should be able to define, with good probability, areas where the market should or should not trade on a near term basis.
Once these areas have been defined, one is able to trade with more well-defined and higher probability risk parameters than would be available with any individual technical system.
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