Predictive technical analysis is chart/pattern reading. Trend following, on the other hand, is reactive technical analysis – a diversified portfolio perspective of markets using momentum indicators. You never know what will happen in one market so you use diversification to hedge your bets. Predictive technical analysis has no evidence of success. Reactive technical analysis has decades of proof behind it. How do you find this proof? Seek out the track records of traders using trend following. You can see trend followers making and losing money over long periods of time.
Michael reads a review from a critic who is a fan of predictive technical analysis. Michael uses this review to further make his point – there is no chart that can be studied long enough that will tell you which way a market will move. Trading in this way is a recipe for failure. As Ed Seykota famously said, “Everyone gets what they want out of the markets.” When you trade as though you can predict the future, you will most certainly get what you want from the markets – failure.