Editing 2101: Technical Analysis
Warning: You are not logged in. Your IP address will be publicly visible if you make any edits. If you log in or create an account, your edits will be attributed to your username, along with other benefits.
The edit can be undone.
Please check the comparison below to verify that this is what you want to do, and then save the changes below to finish undoing the edit.
Latest revision | Your text | ||
Line 8: | Line 8: | ||
==Explanation== | ==Explanation== | ||
− | + | {{incomplete| Comic is still undergoing TECHNICAL ANALYSIS (this is just the prologue). Do NOT delete this tag too soon.}} | |
− | + | {{w|Technical analysis}} is a field which attempts to study stock markets, cryptocurrency markets, etc. statistically (without regard to the fundamental value of the assets), seeking to profit off the patterns that are found there. | |
− | |||
− | + | The theoretical value of a stock is the sum of all its future earnings, with earnings in the future discounted appropriately to account for the {{w|time value of money}}. Because these earnings are never fully predictable, traders may have different ideas about the true value of a stock, and buy the stock if they believe the currently offered prices are particularly low, or sell it when the prices are high. | |
− | |||
− | The theoretical value of a stock | ||
Technical analysis, however, does not even attempt to understand the earnings of the stock, instead focusing on the shapes and patterns that result from traders making their moves. While there is a human behavioral component to stock trading, it is not clear that one can extract much information from the shapes of stock charts. To the extent it does work, a substantial part of its success may be simply an artifact of the herd behavior of traders who engage in technical analysis, a zero-sum game. | Technical analysis, however, does not even attempt to understand the earnings of the stock, instead focusing on the shapes and patterns that result from traders making their moves. While there is a human behavioral component to stock trading, it is not clear that one can extract much information from the shapes of stock charts. To the extent it does work, a substantial part of its success may be simply an artifact of the herd behavior of traders who engage in technical analysis, a zero-sum game. | ||
− | The comic displays a {{w|Candlestick chart|stock price chart}}, annotated with labels which purport to be technical analysis. These labels are nonsense from the perspective of technical analysis, but do accurately describe the graph itself: "{{w|allegro}}" (a musical term used to set the tempo at the beginning of a score), "{{w|prologue}}" (an introductory section of a play, book, or similar), "{{w|lumbar}} support" (the thing in a chair shaped to better support your back), "bathtub" (possibly a reference to the so-called "{{w|Bathtub curve}}"), "{{w|uptalk}}" (a speech pattern). One label celebrates that "these two points define a line! Promising signal." (In geometry, any two points define a line.) | + | The comic displays a {{w|Candlestick chart|stock price chart}}, annotated with labels which purport to be technical analysis. These labels are nonsense from the perspective of technical analysis, but do accurately describe the graph itself: "{{w|allegro}}" (a musical term used to set the tempo at the beginning of a score), "{{w|prologue}}" (an introductory section of a play, book, or similar), "{{w|lumbar}} support" (the thing in a chair shaped to better support your back), "bathtub" (possibly a reference to the so-called "{{w|Bathtub curve}}"), "{{w|uptalk}}" (a speech pattern). One label celebrates that "these two points define a line! Promising signal." (In Euclidian geometry, any two points define a line.) |
− | |||
− | |||
{| class="wikitable" | {| class="wikitable" | ||
Line 27: | Line 22: | ||
|- | |- | ||
|{{w|Allegro_(music)|Allegro}} | |{{w|Allegro_(music)|Allegro}} | ||
− | |Tempo notation in music: played quickly and brightly | + | |Tempo notation in music: played quickly and brightly - a series of very small changes in this region of the graph might suggest notes played quickly |
|- | |- | ||
|Prologue | |Prologue | ||
Line 39: | Line 34: | ||
|- | |- | ||
|Spline | |Spline | ||
− | |A {{w | + | |A {{w|spline}} is a mathematical means of generating a smooth curve, referring to the smoothed curve shown here |
|- | |- | ||
|{{w|Lumbar}} Support | |{{w|Lumbar}} Support | ||
− | |A cushion or other device that provides support to the lower part of the ''spine'', a play on the preceding ''spline'' | + | |A cushion or other device that provides support to the lower part of the ''spine'', a play on the preceding ''spline'' |
|- | |- | ||
|Renewal | |Renewal | ||
Line 54: | Line 49: | ||
|- | |- | ||
|Declination | |Declination | ||
− | | | + | |Another term for a downward trend |
|- | |- | ||
|Inflection | |Inflection | ||
− | |A point at which the slope of a graph changes | + | |A point at which the slope of a graph changes |
|- | |- | ||
|Uptalk | |Uptalk | ||
Line 63: | Line 58: | ||
|- | |- | ||
|Bathtub | |Bathtub | ||
− | |possibly a reference to the so-called "{{w|Bathtub curve}}" | + | |possibly a reference to the so-called "{{w|Bathtub curve}}" |
|- | |- | ||
|These two points define a line! Promising signal. | |These two points define a line! Promising signal. | ||
− | |In geometry, any two points define a line; also looks somewhat like a communication line between two towers. It is tempting when looking at market charts to draw imaginary lines that connect the extrema and hope it means something about the future. The drawn line in this case also just so happens to ignore the many periods of decline marked under "Declination" -- in this case it did eventually recover, but later labels (such as "likely to continue forever" at the end) suggest that this is more likely a case where blind optimism just so happens to have been right for those two particular points (as opposed to the many more possible pairs of points where the line wouldn't be so positive). | + | |In Euclidian geometry, any two points define a line; also looks somewhat like a communication line between two towers. It is tempting when looking at market charts to draw imaginary lines that connect the extrema and hope it means something about the future. The drawn line in this case also just so happens to ignore the many periods of decline marked under "Declination" -- in this case it did eventually recover, but later labels (such as "likely to continue forever" at the end) suggest that this is more likely a case where blind optimism just so happens to have been right for those two particular points (as opposed to the many more possible pairs of points where the line wouldn't be so positive). |
|- | |- | ||
|Yikes | |Yikes | ||
− | | | + | | |
|- | |- | ||
|Wrong! | |Wrong! | ||
|The circled pair of bars are the only pair in the whole graph where two red bars (negative growth) that large are next to each other -- larger red bars exist, but not next to another one of similar magnitude. Labeling it "wrong" suggests the analyst is choosing to ignore reality by throwing out actual past data rather than revise the theory being held. | |The circled pair of bars are the only pair in the whole graph where two red bars (negative growth) that large are next to each other -- larger red bars exist, but not next to another one of similar magnitude. Labeling it "wrong" suggests the analyst is choosing to ignore reality by throwing out actual past data rather than revise the theory being held. | ||
|- | |- | ||
− | | | + | |Slope |
− | | | + | |The {{w|slope}} of a graph is the ratio of the "vertical change" to the "horizontal change". This could also be a play on a second meaning of slope, meaning a rising or falling surface in general. |
− | |||
− | |||
|- | |- | ||
− | + | |Could be an omen | |
− | + | | | |
− | |||
− | |Could be an omen | ||
− | | | ||
|- | |- | ||
|Red + Green = Christmas | |Red + Green = Christmas | ||
− | |Red and green are traditional colors for the {{w|Christmas}} holiday in the U.S | + | |Red and green are traditional colors for the {{w|Christmas}} holiday in the U.S. |
|- | |- | ||
|Likely to continue forever | |Likely to continue forever | ||
− | |This is | + | |This is the opinion held by everyone who buys at an all time high. It's been rising so much, surely it's the best time to buy! We could make millions! Such times are generally followed by a sharp downturn resulting in significant losses, as can be seen historically farther back on the chart. Cryptocurrency communities have significant members who call themselves "hodlers" -- these people always trust that the price will eventually go up even higher, because it has recovered so many times in the past. |
|} | |} | ||
Line 97: | Line 87: | ||
==Transcript== | ==Transcript== | ||
+ | {{incomplete transcript|Do NOT delete this tag too soon.}} | ||
+ | |||
:[A series of red and green box-and-whisker plots form a line that starts in the bottom left corner of the image and wiggles up to the top right corner, with a series of peaks and troughs that resemble a typical stock market diagram. The diagram is annotated with lines, arrows and text.] | :[A series of red and green box-and-whisker plots form a line that starts in the bottom left corner of the image and wiggles up to the top right corner, with a series of peaks and troughs that resemble a typical stock market diagram. The diagram is annotated with lines, arrows and text.] | ||
Line 172: | Line 164: | ||
[[Category:Music]] <!-- “allego” and “prologue” --> | [[Category:Music]] <!-- “allego” and “prologue” --> | ||
[[Category:Comics featuring real people]] <!-- Title text: James Tobin--> | [[Category:Comics featuring real people]] <!-- Title text: James Tobin--> | ||
− |