After using this trading simulator I'm convinced technical analysis simply doesn't work

[K-Pia]

Even if it works 20% of the time.
You can be a winner in this game.
And the reverse is true too (LTCM).

The problem is that you don't want to win.
You want a holy grail. That's an other game.

First know the rules & First do no harm.
There is far more to trading than accuracy.
That's one of the misconceptions to breach,
If you want to make it as a trader, speculator.

First do no harm. First don't be fooled.
The only certainty in trading is that there are suckers.
And suckers don't make it in the long run. So don't be a sucker.

And your thread is just one anecdotal "evidence" among many other.
Since there exist automated strategies that make money with TA,
They just prove you wrong. Maybe you're a human, too human.

Ps : I do not use TA in my trading.

 

[Sergio77]

if I explained it, I would be giving it away. The change in price at the bid-ask level is a fractal of the larger timeframes extrapolated out.

TA is for suckers. Here it is best described as a method for pros to get suckers' money. Also reas Taleb's Fooled By Randomness for more improved thinking.

 

[DDR]

TA is for suckers. Here it is best described as a method for pros to get suckers' money. Also reas Taleb's Fooled By Randomness for more improved thinking.

Once again ! Another hypocrite, the site you linked to, "uses" MA's trend lines and S and R to assess and make decisions upon, if that's not T/A then I don't know what is !
By hypocrite I mean you use T/A, yes you as you follow this site.

FOR the record everyone uses T/A in one form or another, even if it's viewing charts and as stated it is only one part of what's required to trade.
T/A, Fundamentals , Macro events, and Market tone ... all these are used in some form or another to trade professionally.
Not one more than the other but in combination, denying this is plain stupid.

Traders that are considered to not use T/A are pure DOM traders / scalpers unless that's you then divulge it if you are.

 

[nxt7]

Even if it works 20% of the time.
You can be a winner in this game.
And the reverse is true too (LTCM).

The problem is that you don't want to win.
You want a holy grail. That's an other game.

First know the rules & First do no harm.
There is far more to trading than accuracy.
That's one of the misconceptions to breach,
If you want to make it as a trader, speculator.

First do no harm. First don't be fooled.
The only certainty in trading is that there are suckers.
And suckers don't make it in the long run. So don't be a sucker.

And your thread is just one anecdotal "evidence" among many other.
Since there exist automated strategies that make money with TA,
They just prove you wrong. Maybe you're a human, too human.

Ps : I do not use TA in my trading.

Yes I'm aware of LTCM... I don't belong to the EMH crowd.

I'm not looking for some holy grail to trading where I just sit back, press the trade button and watch all the profits roll in lol...

I guess I'm just seeking validity that TA really works or not before I spent considerable time on it.

 

[nxt7]

imo you have not taken onboard the true competition nature of trading. TA is a set of tools. You seem to have applied the tools in the 'mainstream' way and found they dont work. This is exactly the result you should expect.

Then how do I learn the "non-mainstream" way to use TA if most books/online resources on TA are mainstream?

Look, I realise that there is no silver bullet to trading. But if I'm trying to climb a tree on land if I'm a fish underwater, then I'll just forever be a fool.

 

[userque]

Then how do I learn the "non-mainstream" way to use TA if most books/online resources on TA are mainstream?

Look, I realise that there is no silver bullet to trading. But if I'm trying to climb a tree on land if I'm a fish underwater, then I'll just forever be a fool.

Imo, learning mainstream t/a is essential; just as crawling before walking is essential. Learn it until you have no more questions about it; until the mystery is gone.

Eventually, you may develop your own, custom indicators etc., but mainstream t/a provides the necessary foundation upon which to build, learn, and grow.

 

[K-Pia]

Yes I'm aware of LTCM... I don't belong to the EMH crowd.

I'm not looking for some holy grail to trading where I just sit back, press the trade button and watch all the profits roll in lol...

I guess I'm just seeking validity that TA really works or not before I spent considerable time on it.

To do not support the Efficient Market Model,
Whatever the declination you think about,
Is already a good step toward survival.

However no one will ever tell you what works.
You have to walk the walk, make your own jugement.
And avoid that binary mindset, between either 0 or 1.
Because you will never find such a thing that's perfectly working.
The devil is in the details. If you ever want to master it. In addition,
You say it doesn't work ... But everything's so relative ...
I don't know what it means that it doesn't work.
It's like an engine that won't start ?

Would you throw away a nice car because it's engine doesn't work ?
(Ok you'll say it's a bullshit car because it's a broken car)
No ... You'll find out why it fails ! May you just need oil ?
Or fix littles things ? Don't know.

You want a car that works fine ... Ok.
But you'll have to work this out.

So reverse your point of view.
Don't seek proof for potential to jump in.
But jump in and make it work. Whatever it takes.
First, Skin in the game. Tinker, improve from conjectures.
Start simple. Then fix, throw away, build something else. Test.

But understand the game. It's more important than TA.
FYI, I'd use TA to filter. Not to generate Buy and Sell Signals.
And what if you combine trend lines, S&R and 2 time frames ?
When you buy only 15m breakout from 1h upward trend lines ?
... You've got stuff, play with it. Make combinations, pick anything.

 

[Stockmarketmap]

Good revelation NXT7. There is a perception that a backtesting package can provide an "answer", when it basically is a database machine that can produce correlative results through "trading rules" performed on data that has occurred in the past. Kensho is famous for this.
An informative podcast that touches on this subject that one can listen to is Michael Covel interviewing Robert Carver http://www.stitcher.com/podcast/michael-covel-trend-following-manifesto/trend-following/e/ep-417-robert-carver-interview-with-michael-covel-on-trend-42199573 http://www.stitcher.com/podcast/michael-covel-trend-following-manifesto/trend-following/e/ep-417-robert-carver-interview-with-michael-covel-on-trend-42199573

Most of the "non leveraged" "non concentrated macro bet" success stories in the financial markets, involve the "investment" in the equity markets, with the U.S. being the favored market because of it's stability and long term growth persistence .

 

[Xela]

I don't mean to cause any offence to those who frequently use it here

How about those who've been making their full-time livings from it, some of them for decades: did you mean to cause any offence to them?

things I've learnt after having a play with this for several hours

Did it not occur to you that perhaps what you learned from that context is limited to that context?

- Short/long term crossovers don't work unless you just use it to buy/hold for the long run. Even then, plenty of whiplashes undo your gains....

I agree with that one.

- Support/Resistance works sometimes but not most of the time..

1. "Most" is very subjective.

2. You don't need it to work that often for it to give you an edge.

3. You're failing (as people so often do, when using these terms) to distinguish clearly in your own mind between "previous support and resistance" and "future support and resistance" and looking at it in some vague, assumptive, barely even conceptualized sense, as "something that's somehow, magically, supposed to predict the future" and then criticizing it for not doing so according to your own deficient understanding of it; that's not a recipe for success or even for clear understanding.

- Chart patterns rarely work...

Bullshit. Sorry, but it is: expressed like that, it really takes the biscuit (or cookie, or cake, depending on which side of the pond you are) for "meaningless sweeping generalization".

- MACD, RSI and ADX just gives too many false signals...

I agree, but "indicators" aren't the same thing as "technical analysis" - they're only part of it. There's loads of TA that has nothing at all to do with indicators.

I suspect you're not even clearly distinguishing between the two, are you?

Now I still want to believe TA works

Then I respectfully advise you to start off with a clearer perception of what TA is, and how to use it, than the one you seem to have at the moment.

Sorry if I sound jaded by "these threads": one does, eventually, get pretty tired of people who have absolutely no idea what they're talking about announcing that "technical analysis doesn't work" when what they really mean is "I tested some simulated toy; it's about stocks only; it has little to do with real trading, it rests on invalid assumptions, and by the way I'm not actually even bothering to define clearly what TA is, either."

 

[eganon69]

...


I guess I'm just seeking validity that TA really works or not before I spent considerable time on it.

This attitude and thought proves to me that you will forever fail at trading. There is no one way to make money in the market. What is a holy grail system for you is different than what is a holy grail system for everyone else. You need to study and come up with one on your own. The problem is you want proof it works and someone to tell you "buy when this indicator says X" and it's not going to happen. You also have multiple people telling you it works in varying forms.

Your comments are like a kid saying I want proof I will be an NBA Allstar before I ever learn basic fundamentals of Basketball because you don't want to "spend considerable time on it" if it's not going to workout.

Some people have a talent for things and some do not. But hard work takes over where talent stops. So if you don't want to do the work. Move on to something else.