Paul Tudor Jones on the Importance of Technical Analysis

Paul Tudor Jones on the Importance of Technical Analysis

Paul Tudor Jones highlighting the importance of trusting the price action despite having incomplete information:

I see the younger generation hampered by the need to understand and rationalize why something should go up or down. Usually by the time that becomes self-evident, the move is already over. When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart. Why work when Mr. Market can do it for you?

These days there are many more intellectuals in the business, and that, coupled with the explosion of information on the internet, creates the illusion that there is an explanation for everything and that the primary task is simply to find the explanation. As a result, technical analysis is at the bottom of the study list for many of the younger generation, particularly since the skill often requires them to close their eyes and trust the price action. The pain of gain is just too overwhelming for all of us to bear.

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