10 Investment Guidelines: Part 1

2. Most stock market indicators have never actually been tested. Most don't work.

This is a very broad and general statement. My interpretation of this guideline is that technical analysis does not work. Many technicians use market indicators in various forms, including charts, ratios and volume, as the basis for trades. Many market indicators are derived through data-mining and form-fitting.

Developing trading rules or models requires formulating and testing a hypothesis through a great deal of careful data collection, observation and back-testing. Very few trading strategies can make money, and even fewer can consistently beat market averages over long periods of time. Again, it comes back to performance.