95% of traders fail???
- Thread starter oddiduro
- Start date
please ! tudor jones uses esoteric technical analysis--- what in the world are you talking about ??
Quote from OddTrader:
7. Perhaps an integrated approach (as suggested by Callum Henderson in Currency Strategy - The Practitioner's Guide to Currency Investing, Hedging and Forecasting) combining all analyses would provide a better solution.
According to the book (Published 2002), Callum Henderson is a head of Emerging EMEA Strategy for a leading US investment bank based in Londen, ... Prior to his current position, Mr Henderson was part of the Citibank FX Strategy team ...
Q
Looking at a slightly longer time frame, can a corporate Treasurer or an investor use technical analysis as part of their currency risk decision? The answer in this case is also, yes they can.
While the primary focus of technical analysis is short term, it is fully capable of predicting multi-month of (or) even multi-year moves.
As an example, at the end of 1999, when the dollar-rand exchange rate was trading at around 6, the CitiFX Technicals team put up a buy signal, based on a combination of Elliot Wave Theory and the "golden cross" between the 55- and 200-day moving averages, with a multi-year target of 9. (Martin Armitage-Smith/ Tom Fitzpatrick, CitiFX Technical Bullitin) The exchange rate hit 9.00 on September 27, 2001.
Again, the sceptical may see this as coincidence. However the fact is that skilful application of technical analysis principles correctly forecasts a move in the exchange rate that no interpretation of the "fundamentals" would have provided.
--- Page 102
UQ
bbmat makes some valid points, but he is confusing fundamental analysis with quant finance--- binominal trees are quant tools not FA tools. not sure if we are dealing with a lanquage issue or if he is truly confused. in addition, his time frame issue with TA is nonsensical-- the time frame used in TA is directly related to the timeframe of the trade. a three minute chart would be used on a shorter time frame trade than an hourly chart---so what is he talking about ?
best,
surfer
best,
surfer
bbmat - are you claiming that not a single successful (e.g. multi-millions made in trading profits or performance fees) CTA or hedge-fund manager trades technically? Even if you are right about JWH converting to fundamental trading (news to me), Dunn and others are still going the technical route.
Pabst - Soros was well known for "testing the water" before he put on a full position. Often he would actually take a position contrary to his view, to see how the markets would react to some meaningful size being thrown the other way. If the market reacted like a scalded cat, then he would not put on his intended position, as it would be vulnerable to immediate losses should any serious orders come in the other direction. That is pure technical trading, nothing to do with fundamentals at all.
And I bet you that *all* the big bank traders pay at least some attention to market price action. If past price behaviour were not relevant at all, then why would anyone ever look at a chart?
Pabst - Soros was well known for "testing the water" before he put on a full position. Often he would actually take a position contrary to his view, to see how the markets would react to some meaningful size being thrown the other way. If the market reacted like a scalded cat, then he would not put on his intended position, as it would be vulnerable to immediate losses should any serious orders come in the other direction. That is pure technical trading, nothing to do with fundamentals at all.
And I bet you that *all* the big bank traders pay at least some attention to market price action. If past price behaviour were not relevant at all, then why would anyone ever look at a chart?
First of all "looking at a chart" is not analogous to trading technically. Soros and Buffet are discretionary traders. Period.
Secondly, bank traders are not speculators. They're scalpers, market makers, middlemen, parasites. Do you really think the FX desk at JPM needs a chart to tell them that selling 18's to a customer is the right trade when the interbank market is 17 sellers? Thats how I-Banks and moneycenter banks make their $.
When you see billions in flow each day you don't need to BET on direction. This discussion is testimony to why the name of this thread is flawed. It should be, Why Do 95% of Speculators Lose Money? A banks trading desk, a specialist, a local in the S&P pit are not speculating, they're scalping. They're taking advantage of a transactional edge that is dependent on non competitive trade with other market participants.
Surfer,
you seem to be very fast when its up to criticize others. How about slowing down and checking your sources once more. You might need to get an update, or maybe your literature is contradicting (recommend not reading too much on TA ;-)
Here the quote taken out of WALL STREET 100 : .... A rarity among futures traders, Jonesâwho manages $1.5 billion of pooled assetsâlargely shuns computer-driven technical trading models in favor of a fundamental approach, trusting his insights into the strengths and weaknesses of a host of securities and commodities markets.
So, before judging me of making up stories you might need to double check your sources!
BTW, as I argued before: There might be a few (very few) guys who have made it long-term through TA, but its the minoritiy of highly successful traders. Compare it to looking for a small needle in a 10 ton stack of shix: When you let enough people look for that needle you will have one for sure who will find that needle. Probability-wise you will always have someone (even long-term) who made it in trading even utilizing star constellations. Also, if you flip a coin enough times there will be a series of 100 consecutive tails. So what? Do you now consider this proof of non-randomness? However you argue, but please exclude Tudor Jones from your TA HF list ;-)
A good 2004 to you!!!
you seem to be very fast when its up to criticize others. How about slowing down and checking your sources once more. You might need to get an update, or maybe your literature is contradicting (recommend not reading too much on TA ;-)
Here the quote taken out of WALL STREET 100 : .... A rarity among futures traders, Jonesâwho manages $1.5 billion of pooled assetsâlargely shuns computer-driven technical trading models in favor of a fundamental approach, trusting his insights into the strengths and weaknesses of a host of securities and commodities markets.
So, before judging me of making up stories you might need to double check your sources!
BTW, as I argued before: There might be a few (very few) guys who have made it long-term through TA, but its the minoritiy of highly successful traders. Compare it to looking for a small needle in a 10 ton stack of shix: When you let enough people look for that needle you will have one for sure who will find that needle. Probability-wise you will always have someone (even long-term) who made it in trading even utilizing star constellations. Also, if you flip a coin enough times there will be a series of 100 consecutive tails. So what? Do you now consider this proof of non-randomness? However you argue, but please exclude Tudor Jones from your TA HF list ;-)
A good 2004 to you!!!
Quote from marketsurfer:
please ! tudor jones uses esoteric technical analysis--- what in the world are you talking about ??
unfortunately, your information on tudor jones is in error. peter borish, who is currently head of one chicago ssf exchange, was tudor jones chief TECHNICAL guy, tudor jones describes in detail on "trader" a video--- how he uses various esoteric technical indicators. now, this was in 1990 so things may have changed but at that point jones credited cyclical technical techniques for his success.
best,
surfer
best,
surfer