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Yahoo Finance has the closing price of SPY on Oct 24th as 141.02. Is that a fact? Well that's how Yahoo Finance observed it, but Google Finance saw it to be 141.05. So why the difference, who was right, and why are we talking about this?

Well, let me diverge a little to particle physics. You probably have heard about Heisenberg's Uncertainty Principle at some point in your life. It basically states that you cannot know the location and momentum of a point particle like an electron simultaneously. The commonly perceived model that we have of an electron neatly spinning around a nucleus like the Earth around the Sun is completely myth. The shells that you learned in chemistry class, are volumes of probability densities, not actual flight paths. As you can see in the picture above, each red dot is an observation point and can lie in the shell or out of the shell and has literally any possibility, but limited probabilities. The electron is bounced around between the attractive and repulsive forces between the nucleus and the electron itself creating a violent unpredictable path inside this field. I will post more on this later, but for now we leave it at this.

Aggregate market prices for equities behave a lot like this electron. Market prices really only exist in our head alone. There is no true or absolute price for anything, let alone a non tangible product like an equity. Like a point particle, a singularly stated price is really just a point of reference and several sales above and below the sale are occurring, for our practical purposes simultaneously. It is only an individual point of observation that makes it singular. Additionally, It is the fact that price and momentum cannot be known together that the market functions and exists and has value. 

I think this is key to understanding the value of technical analysis. Technical analysis offers no absolute buy or sell signals, because neither price nor momentum are absolute nor perfectly orbital/cyclical. It offers us statistical probability for a particular price or a certain momentum in a generally calculable amount of time. 

Probability leads the successful trader to profit. For example, I could offer out 100 shares of SPY at $500 / share. There is a remote possibility that someone will buy it at that price for some highly random, highly unlikely scenario. But being so unlikely, I would not concentrate my time on such an offer. I concentrate on the probable, not the possible.

I love Bollinger Bands for this reason. It is a self-adjusting, moving probability field with pricing generally bouncing between the upper and lower bands, offering a statistical probability of the prices ranges that will occur within a short time frame. Oscillators quantify the equity price's kinetic energy as the oscillator value passes through its signal reference. They simultaneously show the equity price's potential energy by the oscillator value's distance from the center. Fibonacci lines act as external resistance similar to a semi-permeable wall that can only be crossed with significant force, but that once passed then become a semi-permeable floor that will support a price unless too much downward force is applied. Elliot Wave theory can be compared to a map of where these floors and walls tend to exist.

It is NOT in using these techniques separately that any value is achieved, but in the use of all of them that we can narrow down the probability of future prices for an equity. Individual indicators like MACD, STO, RSI, Williams, candlesticks, Bollinger bands,  and moving averages, etc. can and will fail from time to time, but in using them together, a bigger picture is painted and probable outcomes are formed. 

 
I will be sharing general trading principles and basics behind technical analysis. It will include information from Masters and from myself. I am working on how to present the information, as it is all there, but needs to be coherently laid out. It will take many weeks to cover all the topics, but this section will include (not necessarily in order):

Investing Principles of Warren Buffet - Not so much a look a value investing, but more about the wisdom behind his choices
Growth Principles of William O'Neil - a look at the CAN SLIM concept and finding breakouts. To me, his information is even more useful producing ROI than Warren Buffet.
Fibonacci Lines - How to draw them, and how to determine whether it is support or resistance.
Bollinger Bands - What they mean, how they help determine a relative sense of what is happening. These are a staple to my technical analysis.
Candlesticks and Patterns - Which candles to expect at the beginning and end of bear and bull runs, and which commonly seen patterns suggest which type of market.
Elliot Wave Theory - I am not as experienced at this as I wish I was in this field, but I have found it useful in timing many of my own trades and will share what I can. 
Oscillators - There are many good ones (MACD, RSI, STO, Williams, even Bollinger Bands to a degree), and I would like to share the calculations behind them, what they mean and more importantly how to use them.
Algorithms - On my own, I have made literally hundreds of algorithms, most of which did not beat the market, but  I have a handful that did. Similar to mining for gold, a small percent make up for the rest. I suppose just like a magician, no one should share his best secrets. I may cover a few basic ones that work, or at bare minimum explain how to create and test a hypothesis and then take your best and combine them into a complex algorithm. Then comes the hardest part.... applying and sticking with it. Algorithm trading can cause some awful short term pain, but has killer long term gain. Depends on your intestinal fortitude and willpower.
Physics and Trading - Physics offers a lot of insights into trading. This includes Einstein's theory of relativity,  Heisenberg's uncertainty principle and the particle shell, a ball in flight as a reference to price momentum, and influences that cause misdirection.
Statistics and Risk - Hey, let's face it, you are not gonna retire next year and whatever trading plan you have better make it for 20-30 years. Money is in shorter supply than opportunities. 
Ratios and Arbitrage - Ratios with static signal points are cool because they occur in real-time, while oscillators lag in response a little. Ratios can offer insight into the psychology of the market and we will find ways to make it range bound so that we can make an actionable trade against it.
Miscellaneous - Other random musings that I have found that worked.