“In short term, there are no fundamentals”As a day trader, I always try to close my trades a couple of hours before market close. Later session trading is always harder for me, I guess one of the reasons is that market participants tend to be less emotional than earlier, having less “animal spirits”, as they process and digest data and information further and further, and therefore market tends to be more “efficient” as it goes into close, creating less opportunities for day traders. Thanks to -j4’s post, I read two articles about “Random Walk Process” and “Efficient Capital Market Hypothesis-ECMH”, and feel I had better understanding by reading in Chinese. Both theories emphasize that, data and information and their processing by market participants, play the most important roles in determining prices in financial market.I always think that if today’s academics could learn from Keynes and actually participate in financial market, not only as an investor but also as a trader, they could probably understand market a lot of better.Being an active investor and trader himself, Keynes emphasizes the importance of “expectation”/”anticipation” in stock market. “Expectation”/“anticipation” and their formation are a lot of more subjective and emotionally driven than data and information themselves, which are basically objective. I am not sure whether Keynes talked about “animal spirits” in stock market, “animal spirits” being greed and fear, although more of the former. “Animal spirits” is very often more emotional than rational.TA studies and measures “animal spirits” in financial market, based on two assumptions:1. Human market participants always have “greed and fear”;2. “Greed and fear” work in certain behavioral patterns.TA, although never achieved similar academic fame as “Random Walk Process” and “Efficient Capital Market Hypothesis-ECMH”did, actually is one of trader’s best tools, probably more important than the more famed “Random Walk Process” and “Efficient Capital Market Hypothesis-ECMH”. “In short term, there are no fundamentals”, is my short explanation of TA, although I really mean that in short-term, such as one day session, input from fundamentals or FA is approximately a fixed amount of information. This assumption is of course itself an “approximation”. With this approximation, traders resort to TA to formulate a trading plan for the day. Marketreflections.com