Do large banks and institutions use TA to profit?

[wrbtrader]

Now the question is this...

Does chart analysis fall under the umbrella of technical analysis ?

Simply, I know lots of traders that do "chart analysis" but do not believe its "technical analysis".

Not debating but maybe its the other way around in that technical analysis falls under the umbrella of chart analysis. Therefore, someone that uses chart analysis for trade decisions will believe they are not using technical analysis.

 

[romik]

Ok, so T is an FX scalper, don't 100% of folks that get involved in FX scalping eventually wipe their accounts?

 

[Turveyd]

Ok, so T is an FX scalper, don't 100% of folks that get involved in FX scalping eventually wipe their accounts?

Wouldn't say Scalper, Scalper is after 3 pips profit and out, I like to risk 10 and make 30+ when possible if not 200.

I haven't added money, other than transfering back from the reserve fund or when I've borrowed off the account in 3 or 4 years, I'm up from start about 1500% literally, but been stuck around 6K for 12months, think I've spend 4K of it, barely get time to trade

 

[i960]

WRONG AGAIN, I trade off what is currently happening, ie going up, but with ZERO Forecaste or Prediction, it could stop immediately after I get in ( often ), or 50pips/pts later ( enough ).

Turning, everyone into a TA trader, is just moronic, I am not a TA trader, TA traders SUCK!!

End of Story!!

This is insane - if you're trading off of what is "currently happening" you're trading off of what you JUST saw. That's past data and you're making an educated guess or prediction on where you think price will go - otherwise why the hell would you even put a position on?

I'm up from start about 1500% literally, but been stuck around 6K for 12months, think I've spend 4K of it, barely get time to trade

6k account and you're telling people that "TA traders SUCK!!" Get real.

 

[Turveyd]

This is insane - if you're trading off of what is "currently happening" you're trading off of what you JUST saw. That's past data and you're making an educated guess or prediction on where you think price will go - otherwise why the hell would you even put a position on?



6k account and you're telling people that "TA traders SUCK!!" Get real.

Correct, what you just saw will likely continue, KISS to the max, no BS predictions of timing bottoms / tops, just join and let it run. Have no idea where it will go to, that's predicting, and not logical.


6K errr not rich, better than 95% on here which are demo and 99% which are losing

Started with way less, like $600, spent 4K remember!

 

[londonkid]

Anecdotal I know but I was in the offices of a prop firm last week. I saw mainly DOMs on screens but I also saw market profiles and bollinger band overviews.

 

[romik]

I don't know why this is being discussed, Bloomberg terminals are everybloodywhere, used by pro traders. End of discussion.

 

[motif]

Systematic CTA's, managing up to $30bn - so large, use trend following models (moving average crossovers and the like). In general they don't use pattern recognition, elliot waves, fibonnaci, point and figure analysis, resistance, support, candlesticks or any of that stuff.

Please go into a little detail about the CTAs you mentioned, who are they, which companies they work for, what specific methods etc; Kind of a large statement to make without facts

 

[Ken Busch]

Some things I know, and some things I'm pretty sure about..

Dodd/Frank has largely destroyed any "prop" trading at the major banks. Notice I said "largely". There may be some that are punting around their hedging responsibilities, but far less than what was going on before Lehman. Before Lehman, there were many bank prop traders and they most certainly used technical analysis.

The prop guys were, in theory, separate from the market makers. The market makers certainly have a huge edge in that they not only see order flow, but know it in advance. Much of this has changed with electronic trading. Before electronic trading, an institution would call the salesman at the bank and would say he wanted to buy 100M of US ten years for example. The salesman would squawk to the bank market maker "offer me 100M tens" for PIMCO (or whoever). It was unbelievable to me. No two way market. The market maker knew which way the customer was going, who the customer was, and for what size. Now the customer may be doing more away, but that info was gold in itself. The prop guys were not supposed to know what was going on at the market maker desk. Of course to say they didn't would be quite naive.

It used to really piss me off when bank prop traders would complain about the locals in the eurodollar or treasury pit. There were some scumbags for sure, but most were not. They didn't have a big banks money behind them, and saw only a small fraction of the info the banks saw.

Other institutions are varied for sure. I'm sure some CTA's rely a lot on TA. Obviously the trend over the last decade or longer has been to hire quants and create a system that probably isn't dependent on traditional TA.

 

[EPrado]

Some things I know, and some things I'm pretty sure about..

Dodd/Frank has largely destroyed any "prop" trading at the major banks. Notice I said "largely". There may be some that are punting around their hedging responsibilities, but far less than what was going on before Lehman. Before Lehman, there were many bank prop traders and they most certainly used technical analysis.

The prop guys were, in theory, separate from the market makers. The market makers certainly have a huge edge in that they not only see order flow, but know it in advance. Much of this has changed with electronic trading. Before electronic trading, an institution would call the salesman at the bank and would say he wanted to buy 100M of US ten years for example. The salesman would squawk to the bank market maker "offer me 100M tens" for PIMCO (or whoever). It was unbelievable to me. No two way market. The market maker knew which way the customer was going, who the customer was, and for what size. Now the customer may be doing more away, but that info was gold in itself. The prop guys were not supposed to know what was going on at the market maker desk. Of course to say they didn't would be quite naive.

It used to really piss me off when bank prop traders would complain about the locals in the eurodollar or treasury pit. There were some scumbags for sure, but most were not. They didn't have a big banks money behind them, and saw only a small fraction of the info the banks saw.

Other institutions are varied for sure. I'm sure some CTA's rely a lot on TA. Obviously the trend over the last decade or longer has been to hire quants and create a system that probably isn't dependent on traditional TA.

One of my first trading jobs back in 1993 was working on an institutional desk that covered about 10 very large bank prop traders. These guys traded 500-1000 lots in the 30 yr futures at a clip. 3 of them were cool guys, but the others were vicious bastards at times (I was 24 so at that age you ate a lot of shit starting in the biz). They would call and scream "BUY 1000 with a tick"). So I had to decide to either work the bid or lift the offer. If you lifted the offer and it never was completely taken out and went down they would absolutely crucify you. Even if the market was 25/26 and I bought 980 lots at 25, 20 lots at 26 and it went 26 bid , some of them would bitch they had to pay 26 for 20 lots. Either I was a complete moron, or the locals were screwing them. Heard about it every day......after a month or so you get used to it. Most of the vicious ones though would ease up on the personal attacks after a bit. As far as them having access to giant order flow from their salesman/market flow? well...their timing was certainly very good most of the time. Let's leave it at that.

As far as if some used TA. I got to know a few of them outside the job. Part of my job as well was to go drinking with them once in a while. A few did rely heavily on price action....support resistance levels. A few would trade off of past TA patterns. A few used primarily fundamental info only. And of course some "might" have traded off of order flow.