ABSTRACT
If you have ever watched your children (or yourself) row a small boat, you know how for most people the boat follows a zigzag pattern towards its goal as the rower constantly turns to look over his shoulder to see how his path relates to his goal. This is called hunting, and the process by which the boat is realigned is called negative feedback. Negative feedback usually results in over-compensation-resulting in the zigzag pattern we see the rower take. Constant adjustment, of course, may keep the boat on a straighter course, but at a greater cost in energy. This analogy serves to describe the behavior of markets as they zigzag back and forth searching for the fair market price. Hunting and negative feedback will occur and the trader must choose between many short-term adjustments or a longer-term approach that may expose him to greater profits and losses.
