Following a recession we barely had, and a market recovery so quick that one wonders if the lessons taught will actually be heeded, there is a good chance that a raft of novice investors will enter the market in the next year.

Brokers charge a fee for each trade (as does the Australian Securities Exchange), so encouraging more trades is a good strategy for them.

For the investor, the per-trade fees make it harder, not easier, to beat the market.

Similarly, sharemarket tip sheets and newsletters need to keep their advice flowing in order for subscribers to have something to read. This has led most, but not all, to provide a constant outpouring of buy and sell recommendations in each edition. Often, accountability is low and, almost invariably, newsletter performance returns are quoted on a misleading, "before brokerage and subscription" basis. Software providers are typically the most evolved when it comes to marketing a product of little value at an exorbitant price.

After the free introductory seminar in which slick salesmen wow the audience with technical analysis mumbo jumbo and carefully worded promises of profitability, comes the hard sell to extract thousands of dollars from investors. There are some reputable software providers that avoid such high-pressure marketing. However, they are few and far between. Ongoing training is costly, too, as are the daily data downloads and other services of questionable quality or utility.

The result is that, even should a profitable system be found, upfront, ongoing and transaction costs would be likely to either cancel out the gains or make it not worth one's while.

Another worrying aspect relating to the promotion of constant trading is the pressure on novice investors to dive into high-risk derivative and Contract for Difference (CFD) trading. CFDs are promoted to novice investors because they tend not to grasp the risk/return dynamic. More experienced investors with a better understanding of the attendant risks tend to stay away from CFDs, or at the very least have no-one else to blame for their actions.

The field that best accommodates a strategy of high-volume trading, mechanical intelligence and dubious "services" is technical analysis.

The world of technical analysis appears to be overly laden with a dizzying array of jargon, with statistical concepts thrown in from time to time to provide an academic flavour, or simply to make it sound intelligent.

However, most concepts, the assumptions upon which they are based and the explanations of why they ought to result in outperformance, are thin at best.

There may be a number of technical analysts who have developed workable formulas for success. However, after fees, technical analysts as a group are likely to have the highest costs, and greatest underperformance.

Yet marketing, almost exclusively directed at retail investors, is substantial.

This article by Stuart Wilson, Chief Executive Officer of the Australian Shareholders' Association featured in his weekly Shareholder Opinion column in The Australian on Thursday, 5 November 2009.