Do large banks and institutions use TA to profit?

[galvinlee888]

Quantitative is widely used in bank and institutions, some of the traders will use TA for cross check but TA definitely not the decision point to make a trade.

Are this means Quant folks are more profitable than seasonal trader? No, most good traders only take the advice from Quant as reference but using their instinct to make the trading decision.

I never see any profitable TA trader in my life, not in bank/institution /conference, nor in any of the retails traders. I wish someone can proof I am wrong.

 

[londonkid]

well Surf should be awake now, hopefully he will share his wisdom.

 

[galvinlee888]

Absoultely not!! lol
They have access to information that gives an edge which can't be seen in price charts

Lol, the "wall" in banks are not that thick but neither that thin as you cliamed.

No one (except those out of their mind) will trade any insider information, the "risk/reward" is not worth of it, you don't want to risk to spend 20 years in jail just for a few hundred thousand $ bonus.

 

[candles]

Lol, you are talking nonsense.

lol. Good luck out there. You'll need it!!

 

[globalarbtrader]

Ahah are you serious?
I work in a large bank, as lot of colleagues and friends. Of course we don't have access to "special" information. Some hedge funds yes but banks and institutions no way.
For example, do you think banks and institutions knew about Volkswagen ? Nope. Only insiders. Or about Greek crisis ? Or any crisis? Nope.

Nowadays, TA is still not admitted as "enough serious" for banks and institutionals even if everyone uses TA tools and expressions. Quant tools are more popular, even if their accuracy and efficiency are close to zero.
Of course TA works ! But too many people don't want to work to understand its basis.

CM

Banks see liquidity and order flow in OTC markets. They know about large customer orders before they are hedged in the market. That's worth something.

GAT
(Used to work in a bank)

 

[wrbtrader]

I almost forgot, many top Universities have trading rooms and trading programs sponsored by top firms worldwide.

Amongst many things being taught in the trading rooms, TA is usually one of the topics but usually not taught by the professor. Instead, they often use technical analysts from the firm that sponsored the University trading room to give lectures on TA.

Awhile back here at ET I gave a list of many top universities in the U.S., Canada, England and other locations in the world that have state of the art trading rooms (donated from top firms) and classes in trading/markets.

Several years back, I've actually had to opportunity to visit the trading rooms at three particular universities (Hofstra, Penn State and MIT). Their trading rooms are very impressive,. Yeah, almost all those in the rooms at the time I visited them...they were using charts and they are learning TA too but it ain't the only thing they're learning nor is TA the most important thing they're learning.

Note: I also had a chance to talk to future quant folks at the Universities...they had big goals and saw big dollars.

Simply, don't believe anyone that says TA is not being used at banks or institutions or in academics at the University level. It is being used but not by everyone. The pros just have access to info that most typical retail trader does not have access.

Unfortunately, most of us retail traders that uses charts (TA) believe that TA somehow gives us some sort'uv level (fair) play in the game of trading. TA does not give us retail traders equal play with the professional firms...TA is a tool that should not be used alone.

Pros understand the role of TA...that it shouldn't be used alone but retail folks keeps attempting to use TA as if no other info matters.

TA is useful, just not by itself.

 

[Chris Mac]

Banks see liquidity and order flow in OTC markets.

Ok, I am not an expert but more and more people (retail) are trading with order books, and their information are closed to the one available in banks.
So even this "edge" is not a real one any more.

CM

 

[galvinlee888]

Banks see liquidity and order flow in OTC markets. They know about large customer orders before they are hedged in the market. That's worth something.

GAT
(Used to work in a bank)

I will keep my mouth shut about this if I am (was) working in any bank/institution /brokage firm.

 

[marketsurfer]

This issue was resolved awhile ago...not sure why it keeps continuing.

Some banks/institutions use TA while others do not. Yet, those that do use TA, they are not using it the way the typical retail traders use it and they are using it with other resources that the typical retail trader does not have access too. Simply, banks/institutions are not using TA as the sole reason for a trade decision whereas most retail traders that use TA are using it as the sole reason for a trade decision.

How do I know for sure ? I have several close friends and two relatives working in the industry. Some firms use it and others do not use it. An example of a firm that uses TA is Credit Suisse.

Surf is aware of this via a prior conversation with him in which I specifically gave the name of someone at Credit Suisse that has the job title "Strategist Technical Analyst" and Credit Suisse has won TA awards for their technical analysis.

The latter above isn't really important. The important issue to walk away with is that those professional firms that use TA are not using it the same way as most retail traders use it nor do they rely on TA the same way as most retail traders relies on it.

False and misleading.

TA at banks purpose is to market their products. They don't make decisions from TA. It is also used to be explain market movements to the press and staff. Nothing to do with trading or position choosing.

Why haven't computers rendered trading charts completely irrelevant for even retail traders?

Traders use computers to draw charts then interpret them? Computers don't read charts-- so why use them at all? U can get exact pattern recognition programs for near free , so why introduce the flawed chart into the mix?

There is only one reason and i call it the slotmachine attraction. You like looking at the pretty colors and shapes. Just like the old ladies at slot machines. Ridiculous!

 

[Visaria]

I never see any profitable TA trader in my life, not in bank/institution /conference, nor in any of the retails traders. I wish someone can proof I am wrong.

there are loads of them. you just need to take a look.

Here are 2:

Marty Schwartz, qualifies as a retail trader (a rather big one)

Peter Brandt, qualifies more institutional since he manages money.