Do large banks and institutions use TA to profit?
- Thread starter londonkid
- Start date
I've heard from my Dad who used to trade at Salomon consistently talk about EW. I just haven't dedicated the time yet to get all the books on EW, backtest, and suck it in with an empty open mind.
I have my own rules. TA is only a toolbox for me...there is a wide range of various tools you can use, but I keep mine very simple. The rest is managing my emotions/trade management.
The hardest part about being a believer in TA however, is most of the professors in my finance classes would laugh about it. Trying to get your Mom to reduce her exposure to the stock market/biotech based on charts vs her belief in SeekingAlpha/News and what the financial advisor recommends. (who believes the market will continue to go up forever/look at Japan/core holdings in financials which has been the weakest sector). Last but not least wanting to pursue the CMT certification, but knowing that it's seen as a joke.
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I've heard from my Dad who used to trade at Salomon consistently talk about EW. I just haven't dedicated the time yet to get all the books on EW, backtest, and suck it in with an empty open mind.
I have my own rules. TA is only a toolbox for me...there is a wide range of various tools you can use, but I keep mine very simple. The rest is managing my emotions/trade management.
The hardest part about being a believer in TA however, is most of the professors in my finance classes would laugh about it. Trying to get your Mom to reduce her exposure to the stock market/biotech based on charts vs her belief in SeekingAlpha/News and what the financial advisor recommends. (who believes the market will continue to go up forever/look at Japan/core holdings in financials which has been the weakest sector). Last but not least wanting to pursue the CMT certification, but knowing that it's seen as a joke.
EW is a scam, it's 1 of those, obvious after deals but live and at the time, no way in hell your just guessing, but that makes it sellable infinitily as you'll never crack it, but it looks easy after like everything does.
Mind is open, keep an open mind to maybe I'm right!
Like I said, I haven't taken the time to fully read everything on EW and make my own valid judgement. My current opinion on it is similar to yours....I don't believe in it and is not something I use in my analysis.
However I know that PTJ and my dad who traded for Salomon use EW, hence I'm even giving the time to read up on it in the future.
This ought to settle it, read all replies:
https://www.quora.com/Do-large-trad...nks-and-or-hedge-funds-use-technical-analysis
https://www.quora.com/Do-large-trad...nks-and-or-hedge-funds-use-technical-analysis
Did you not read the rest of replies?
Been in the business for 2 decades, i can say YES some institutions do us TA and others do not. During my days in the dealing room, the traders were only interested in key Support and Resistance levels. In other firms they wanted price targets and weekly trends. The asset management firms are mostly interested in Relative Performance and top down approach. As a TA and a CMT after 20 years work, i started trading, and let me tell you this, TA is NOT the main thing. It CAN be very helpful and CAN fine tune your trading but it's contribution in successful trading is usually overstated by retail and understated by institutions. Being an analyst is one thing, and being a trader is something else. Concepts like money management, strategy, tactics, asset allocation play a very crucial role in the performance of banks and institutions. TA can contribute in tactics and strategies. Trend following for swing trading, Supports and Resistance for mean reversion, it plays no role for IPO's, and a minor role in dollar cost averaging (long term non-leveraged investment).
Do you feel as if your CMT certification has helped improve your trading or at least helped you explore and test all the tools that TA has to offer?