Following or Predicting

[ProfLogic]

Now back on topic . . . following. Predicting isn't consistent or accurate.

 

[Lucrum]

Quote from ProfLogic:

Now back on topic . . . following. Predicting isn't consistent or accurate.

Ditto for me too.

 

[horribilicus]

Lots of people say that the act of taking a directional position (shorting a stock, going long a futures contract, buying a currency forward contract, etc.) is identical to making a prediction. If long you are predicting there will soon occur an exploitable upmove. If short you are predicting there will soon occur an exploitable downmove. Directional trading is nothing more and nothing less than making predictions and betting they will come true.

Even if you are going long after observing a steady 3 month uptrend, so you are "following the trend," nevertheless the act of going long is idetical to predicting, "In the future, this will go up (some more)."

 

[OddTrader]

Quote from ProfLogic:

Timing of what?

?

 

[illiquid]

Quote from whitster:

"I have seen people come up with some crazy ideas and call them TA. LIke saying everytime there are 4 neg bars the 5th should be positive and crazy stuff like that which I dont even think you can call TA."

any study of price qua price (and price repeated = volume) is TA.

it may be dumb ta, or good ta, or whatever, but if you are studying price, price movements, etc. you are using TA.

I would define TA as any methodology whose profitability depends almost entirely upon "static repetition".

 

[whitster]

you can define it any way you want.

but what it means is analysis of financial instruments based on price/volume action, or any derivative of same (indicators, trend lines, TRIN, tick, etc.)

iow, TA is the study of price. volume is just price repeated, so to speak.

the easiest way to think about it is, if it is not TA, then it is usually fundamental analysis. so, ask yourself - am i looking at price or a derivative of same, or am i looking at factors affecting price

if i am looking at management, earnings, if i am asking store managers how the product is moving off the shelves, if i am stopping by headquarters to see if the company employs a cute receptionist (buy the stock if they have a cute receptionist theory), that is obviously not TA.

if you are looking at price action - it's ta.

many don't want to admit what they do is TA, so they make up some special definition like the last poster.

 

[OddTrader]

Quote from whitster:

you can define it any way you want.

but what it means is analysis of financial instruments based on price/volume action, or any derivative of same (indicators, trend lines, TRIN, tick, etc.)

iow, TA is the study of price. volume is just price repeated, so to speak.

the easiest way to think about it is, if it is not TA, then it is usually fundamental analysis. so, ask yourself - am i looking at price or a derivative of same, or am i looking at factors affecting price

if i am looking at management, earnings, if i am asking store managers how the product is moving off the shelves, if i am stopping by headquarters to see if the company employs a cute receptionist (buy the stock if they have a cute receptionist theory), that is obviously not TA.

if you are looking at price action - it's ta.

many don't want to admit what they do is TA, so they make up some special definition like the last poster.

How about QA?

 

[whitster]

if it's based on price (i am assuming you are referring to Quantitative Analysis), it's TA.

give me an example of a QA setup that you are in doubt of whether it is TA or not TA.

TA and QA are not mutually exclusive, of course.

 

[OddTrader]

Quote from whitster:

if it's based on price (i am assuming you are referring to Quantitative Analysis), it's TA.

give me an example of a QA setup that you are in doubt of whether it is TA or not TA.

TA and QA are not mutually exclusive, of course.

imo, QA can incorporate various statistics (even FA data) that TA doesn't use whatsoever.

 

[illiquid]

Quote from whitster:

many don't want to admit what they do is TA, so they make up some special definition like the last poster.

Shrug, just semantics. In my mind it's not what you use, but how you use it.

If my main purpose was to avoid being labelled a technical trader, I could just claim I use FA, since you've claimed everything else to be TA. But I'll let you win the semantics argument, I really don't care -- the FA/TA polarity is awfully misleading in any case.

The basis for technical analysis is the simple premise that what has happened in the past will happen again, and continue to happen in the same way. My view on how I profit from the markets does not require the above premise to be true -- not in the same "textbook" way at least. So call it what you want, not a big deal for me.