Tuesday, May 14, 2013

The study of economics is not a science

The study of economics is not a science. Note that I did not write “exact science”. It is not a science at all. It is a set of beliefs that are held by individual practitioners and invoked under any and all conditions. Economists are Keynesians, Monetarists or follow the Austrian School in the same way as the devout adhere unquestionably to Mohammed or Christ or L. Ron Hubbard. Economists cannot agree among themselves on the right course of action under any given set of circumstances and they most certainly cannot predict what will happen in the future.  

This should be of concern to those who subscribe to fundamental analysis of stocks, bonds and other investments, including Forex. Those who rely on technical analysis are likely to be somewhat more focussed, but the state-of-the-art here is also one of flux. Up front and centre at present is the place that computers have to play in developments. Automation is now a requirement for price action research, for learning, for trade entry and management, and for back-testing.  

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