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Simplicity-is-solved-complexity

13-Dec-06

These are the words of the famous Romanian sculptor, Brancusi. The essence of his words, boils down to the same thing. Whether life, technology, relationships, markets will become more complex tomorrow or simple? If you extrapolate, yes, everything should be a bit more complex. But if you think and reason, simplicity might be more sought after tomorrow.

We at OR-PHE-US agree that market success and forecasting will work more on simple logic than on complex models. For a contrarian its not tough to see a mania, if he wants to stand alone. And for a technician it's not tough to see a moving average, if it says ‘Buy’ or ‘Sell’.

Moving average are simple in their use and very easy to interpret. Rather they are one of the simplest tools known to traders and technicians. The reason market participants believers drop these tools and use other forecasting tools and techniques is because markets can not be that simple. We believe in simple things of life. Our tools are simple. And we are convinced that it is the simple that is better. Simplicity is not only beautiful but also effective.

In the report, we have illustrated the SIF2 and SIF5 (Top Romanian Financial blue chips) 50 period (dily) moving averages. They are a sell for both SIF2 and SIF5. Every buyer should give prices a chance to move back up above the blue line, before he buys. This is the simple message. A solved complexity of noise you receive regarding your investment decisions.


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