Seeking to take emotion out of investing, stock analysts have invented many systems of technical analysis. Technical analysts look only at numbers.

Most believe a thorough study of stock price and volume patterns alone should allow the prediction of future prices. Some technical analysts study more factors than price and volume. All build elaborate charts and read them for clues to the future. Often, extensive computer modeling and game playing systems are employed. Economic factors, stockbroker pressure, the brother-in-law’s inside information, the CEO’s cold, and other factors are ignored.

Technical analysis is great for number people. You can play with endless formulas to analyze past trends hoping to predict the future. However, technical analysis is best employed on other people’s money. Then you can remain objective and emotionless. All the studies of technical analysis show that it is ineffective. Used on your own money, you are likely to have strong feelings as losses mount.