A great reminder from technical analyst John Murphy:

“The statement ‘market action discounts everything’ forms what is probably the cornerstone of technical analysis. […] The technician believes that anything that can possibly affect the price–fundamentally, politically, psychologically, or otherwise–is actually reflected in the price of that market.”

Alfred Cowles adds:

“This evidence of structure in stock prices suggests alluring possibilities in the way of forecasting. In fact, many professional speculators, including in particular exponents of the so-called Dow Theory widely publicized by popular financial journals, have adopted systems based in the main on the principle that it is advantageous to swim with the tide.”

William Dunnigan adds:

“We think that forecasting should be thought of in the light of measuring the direction of todays trend and then turning to the Law of Inertia (momentum) for assurance that probabilities favor the continuation of that trend for an unknown period of time into the future. This is trend following, and it does not require us to don the garment of the mystic and look into the crystal balls of the future.”

Richard Donchian adds:

“When I first got into commodities, no one was interested in a diversified approach. There were cocoa men, cotton men, grain men they were worlds apart. I was almost the first one who decided to look at all commodities together. Nobody before had looked at the whole picture and had taken a diversified position with the idea of cutting losses short and going with a trend.”

William Dunnigan adds:

“Let us believe that it is possible to profit through economic changes by following today’s trend, as it is revealed statistically day-by-day, week-by-week, or month-by-month. In doing this we should entertain no preconceived notions as to whether business is going to boom or bust, or whether the Dow-Jones Industrial Average is going to 500 or 50. We will merely chart our course and steer our ship in the direction of the prevailing wind. When the economic weather changes, we will change our course with it and will not try to forecast the future time or place at which the wind will change.”

Ed Seykota adds:

“All trends are historical, none are in the present. There is no way to determine the current trend, or even define what current trend might mean; we can only determine historical trends. The only way to measure a now-trend (one entirely in the moment of now) would be to take two points, both in the now and compute their difference. Motion, velocity and trend do not exist in the now. They do not appear in snapshots. Trend does not exist in the now and the phrase, “the trend” has no inherent meaning…There is no such thing as a current trend. When we speak of trends we are necessarily projecting our own definitions. With that in mind, we can proceed to examine ways to define, compute and use trends.”

Samuel Clemens:

“Figures don’t lie, but liars figure.”