The game does not change. Only the players.
Hedge funds famous for technical trading?
- Thread starter kmgilroy89
- Start date
The game does not change. Only the players.
everything is in the price... is the definition of the efficient market hypothesis. not t/a.
I gave a definition of t/a. t/a analyzes past data.
It seems surf was mixing up chart divination (my term) with t/a.
chart reading is not necessarily chart divination.
when I was first started trading, trading in front of announcements was easier. (insiders had more edge as companies held onto material info longer) so I looked for insider buying... I looked for bids stepping up on the NYSE I looked for double prints and I looked for smooth buying trends starting up to about 10 days before on particular tech stocks.
we most definitely did not think everything was in the price.
I remember a big selloff in the nasdaq back then in which millions of shares of microsoft were hitting the bid day after day.
Goldman was there for about a week buying everything. It was breathtaking.
stats, tape reading charts... r/s... every type of analysis would have pointed to microsoft. It just held strong on a big selloff.
no doubt Microsoft was out of line...
the only questions were buy or sell and when.
The thread is on HF who are famous for technical trading. HF do use scintists who are under the dircetion of business people.
The record is clear on HF performance; it happens in several ranges but none do very well.
Back to the OT palaver.
Most posters here are talking about what they do not do.
As I write for publication my chapter 8 is entitled: "The Lowdown on Learning to Learn". it id the last chapter of Part I where I introduce four main foundational topics for being able to read and use the rest of the book.
I continually examine ET'ers to find out what went wroong for them. In learning about anything, a person has to find out when he is doing something wrong. Then he has to figure out what he is doing wrong. The same applies if you are observing others via their communications.
This thread went astray when it was discovered that HF's do not do very well and/or it ws caimed they do not use Technical trading. Stats are technical but they do not serve well the record shows.
I recommend that people take a moment occasionally to find out how their learning process is going. I doumented my learning process in chapter 7 So there was a context for what I recommend for learning how markets work.
The market is like a jigsaw puzzle. I poured the pieces out of the box onto the card table. Some were upside down.
Regression to the mean is not a pice of the market puzzle until you recognize the nead for the tool. It is a tool that could be like all the clouds in a pastoral scene. It is 1/3 of the picture and you can learn to use it as a part of a money making segment. Or you could sit on the sidelines and trade 1/3 of trends as a contrarian.
We all know how to combine Bollinger Bands iwth little shadows to begin and end a trend. But what about the rest of the pieces of the puzzle inbetween these two points and what about it when bollinger bands are not working?
You do have to know how to learn to learn before you take on learning about a body of skills and knowledge. Fortunately, you have had successful learning experiences. BUT have you used these to assure that you are learning as well as you can?
One of the telltales of not being able to learn something is that the pieces are not fitting together.
Take two more boxes of puzzles and pour them on the table.
Let them simulate the three parts of a trend.
There are 56 pieces on the table. One box has 11 pieces another box has 10 pieces and the third box has 35 pieces.
Your mommy has caught you. She tells you just what to do.
She says turn the pieces upside down and put them back in their boxes. You are learning how to learn as you read this post.
If you have three things, the only way to put each thing in the correct box is to know how to sort. then you can work one putting one box together correctly. reversion to the mean is only one box. The name on the box is "RETRACE". It is made by the non dominant puzzle company.
The record is clear on HF performance; it happens in several ranges but none do very well.
Back to the OT palaver.
Most posters here are talking about what they do not do.
As I write for publication my chapter 8 is entitled: "The Lowdown on Learning to Learn". it id the last chapter of Part I where I introduce four main foundational topics for being able to read and use the rest of the book.
I continually examine ET'ers to find out what went wroong for them. In learning about anything, a person has to find out when he is doing something wrong. Then he has to figure out what he is doing wrong. The same applies if you are observing others via their communications.
This thread went astray when it was discovered that HF's do not do very well and/or it ws caimed they do not use Technical trading. Stats are technical but they do not serve well the record shows.
I recommend that people take a moment occasionally to find out how their learning process is going. I doumented my learning process in chapter 7 So there was a context for what I recommend for learning how markets work.
The market is like a jigsaw puzzle. I poured the pieces out of the box onto the card table. Some were upside down.
Regression to the mean is not a pice of the market puzzle until you recognize the nead for the tool. It is a tool that could be like all the clouds in a pastoral scene. It is 1/3 of the picture and you can learn to use it as a part of a money making segment. Or you could sit on the sidelines and trade 1/3 of trends as a contrarian.
We all know how to combine Bollinger Bands iwth little shadows to begin and end a trend. But what about the rest of the pieces of the puzzle inbetween these two points and what about it when bollinger bands are not working?
You do have to know how to learn to learn before you take on learning about a body of skills and knowledge. Fortunately, you have had successful learning experiences. BUT have you used these to assure that you are learning as well as you can?
One of the telltales of not being able to learn something is that the pieces are not fitting together.
Take two more boxes of puzzles and pour them on the table.
Let them simulate the three parts of a trend.
There are 56 pieces on the table. One box has 11 pieces another box has 10 pieces and the third box has 35 pieces.
Your mommy has caught you. She tells you just what to do.
She says turn the pieces upside down and put them back in their boxes. You are learning how to learn as you read this post.
If you have three things, the only way to put each thing in the correct box is to know how to sort. then you can work one putting one box together correctly. reversion to the mean is only one box. The name on the box is "RETRACE". It is made by the non dominant puzzle company.
All you can do it try. some folks will never "get it".
i give up on this thread
surf
i give up on this thread
surf
in any case that was not the definition of t/a.
http://en.wikipedia.org/wiki/Efficient-market_hypothesis
In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient". In consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.
There are three major versions of the hypothesis: "weak", "semi-strong", and "strong". The weak-form EMH claims that prices on traded assets (e.g., stocks, bonds, or property) already reflect all past publicly available information. The semi-strong-form EMH claims both that prices reflect all publicly available information and that prices instantly change to reflect new public information. The strong-form EMH additionally claims that prices instantly reflect even hidden or "insider" information. Critics have blamed the belief in rational markets for much of the late-2000s financial crisis.[1][2][3] In response, proponents of the hypothesis have stated that market efficiency does not mean having no uncertainty about the future, that market efficiency is a simplification of the world which may not always hold true, and that the market is practically efficient for investment purposes for most individuals.[4]
http://en.wikipedia.org/wiki/Efficient-market_hypothesis
In finance, the efficient-market hypothesis (EMH) asserts that financial markets are "informationally efficient". In consequence of this, one cannot consistently achieve returns in excess of average market returns on a risk-adjusted basis, given the information available at the time the investment is made.
There are three major versions of the hypothesis: "weak", "semi-strong", and "strong". The weak-form EMH claims that prices on traded assets (e.g., stocks, bonds, or property) already reflect all past publicly available information. The semi-strong-form EMH claims both that prices reflect all publicly available information and that prices instantly change to reflect new public information. The strong-form EMH additionally claims that prices instantly reflect even hidden or "insider" information. Critics have blamed the belief in rational markets for much of the late-2000s financial crisis.[1][2][3] In response, proponents of the hypothesis have stated that market efficiency does not mean having no uncertainty about the future, that market efficiency is a simplification of the world which may not always hold true, and that the market is practically efficient for investment purposes for most individuals.[4]
Quote from Soon2Bgreat:
Seems like most threads end up in a 'does TA work?' debate, kinda funny.
Surf, as of late, you've been pretty adamant about your position on on the efficacy of TA. While I don't generally disagree with you in that I don't believe TA provides an edge in and of itself, I will disagree that it hasn't been/can't be examined. Andrew Lo did some research on chart patterns as long ago as 2000 (and he even found that TA was useful - WHAT!?).
IMO, TA is about as useful (in terms of providing an edge) as most fundamental analysis, which is to say, not generally that useful. What it does do is provide a framework for risk management and allows people to enter trades. Gotta go on something, I personally like my magic 8 ball.
Yes, Lo was very funny.
Have you ever seen a turd in a punch bowl?
Here is a PhD who does something.
where did he get the list he used?
He went down a riding trail with a scoop and a bucket.
Then he came back to a computer and looked for all the turds he could find and made some tables.
Reading this poop he turns out is a real test of how crappy the NSF and the finacial community sponsored research can really get.
Look at his footnotes.
a Fed Reserve board paper confirming t/a.
clearly using stats.
http://www.ny.frb.org/research/epr/00v06n2/0007osle.pdf
Conclusion
This article has examined the predictive power of support and
resistance levels for intraday exchange rates, using technical
signals published by six active market participants from
January 1996 through March 1998. The statistical tests, which
use the bootstrap technique (Efron 1979, 1982), cover support
and resistance levels for three currency pairs: dollar-mark,
dollar-yen, and dollar-pound.
The results indicate that intraday exchange rate trends
were interrupted at published support and resistance levels
substantially more often than would have occurred had the
levels been arbitrarily chosen. This finding is consistent across
all three exchange rates and across all six firms studied. The
predictive power of published support and resistance levels
varies considerably across firms and across exchange rates.
It lasts at least one week. The strength estimates published
with the levels are not meaningful. These results are highly
statistically significant and are robust to alternative
parameterizations.
The predictive power of support and resistance levels has
many possible sources, some of which are discussed in Osler
(2000). Central bank intervention has been cited as a possible
source of the predictive power of other technical trading
strategies (Szakmary and Mathur 1997; LeBaron 1999).
However, central bank intervention seems unlikely to be an
important source of the predictive power of support and
resistance levels since there was no reported intervention for
the mark and the pound during the sample period. Other
possible explanations include clustered order flow, which
receives support in Osler (2000), and self-fulfilling
prophecies.
clearly using stats.
http://www.ny.frb.org/research/epr/00v06n2/0007osle.pdf
Conclusion
This article has examined the predictive power of support and
resistance levels for intraday exchange rates, using technical
signals published by six active market participants from
January 1996 through March 1998. The statistical tests, which
use the bootstrap technique (Efron 1979, 1982), cover support
and resistance levels for three currency pairs: dollar-mark,
dollar-yen, and dollar-pound.
The results indicate that intraday exchange rate trends
were interrupted at published support and resistance levels
substantially more often than would have occurred had the
levels been arbitrarily chosen. This finding is consistent across
all three exchange rates and across all six firms studied. The
predictive power of published support and resistance levels
varies considerably across firms and across exchange rates.
It lasts at least one week. The strength estimates published
with the levels are not meaningful. These results are highly
statistically significant and are robust to alternative
parameterizations.
The predictive power of support and resistance levels has
many possible sources, some of which are discussed in Osler
(2000). Central bank intervention has been cited as a possible
source of the predictive power of other technical trading
strategies (Szakmary and Mathur 1997; LeBaron 1999).
However, central bank intervention seems unlikely to be an
important source of the predictive power of support and
resistance levels since there was no reported intervention for
the mark and the pound during the sample period. Other
possible explanations include clustered order flow, which
receives support in Osler (2000), and self-fulfilling
prophecies.
...and the final word in Smurf's anti-TA coffin is:
"Everett Capital Management Launching Technical Analysis Fund"
March 28th, 2012 EST
"Everett Capital Management, a California-based alternative asset manager specialising in technical trend-following investment strategies, will roll out its maiden offering to global high-net-worth individuals (HNWIs) after it launched initially in December 2006, HFMWeek has learned.
A source familiar with the plans said Everett Capital Partners, LP, which debuted with internal capital as well as money from friends and family, is targeting a $500m capacity and looking for a marketer to help grow the firmâs assets. Additional details were not availableâ¦"
http://www.hfobserver.com/news/everett-capital-management-launching-technical-analysis-fund/
Ladies and gentlemen of the jury, we rest our case.....
---------------------------------
For the extra credit:
Describe Everett Capital Management.
Hurlbut: We're a hedge fund/alternative asset manager. The firm is registered as an investment adviser in the state of California. It is also registered as a commodity pool operator (CPO) with the NFA. I began the firm in December 2006 with capital raised from family members and former clients from Smith Barney. Recently, I added one new client -- a proprietary trading firm -- and I also advise another long-only portfolio. We currently have roughly $20 million in assets under management.
How would you describe your investment style?
Hurlbut: I focus on technical-trend-following investment strategies in global markets across individual stocks, commodities, futures and FX. It's a pretty simplistic trend-following strategy -- you're looking to capture price trends across these different asset classes, using relative strength, volatility breakouts and pattern recognition.We achieved 31.54 percent returns for the past 12 trailing months, through September 2011.
http://www.advancedtrading.com/managingthedesk/everett-capital-managements-todd-hurlbut/231901523
"Everett Capital Management Launching Technical Analysis Fund"
March 28th, 2012 EST
"Everett Capital Management, a California-based alternative asset manager specialising in technical trend-following investment strategies, will roll out its maiden offering to global high-net-worth individuals (HNWIs) after it launched initially in December 2006, HFMWeek has learned.
A source familiar with the plans said Everett Capital Partners, LP, which debuted with internal capital as well as money from friends and family, is targeting a $500m capacity and looking for a marketer to help grow the firmâs assets. Additional details were not availableâ¦"
http://www.hfobserver.com/news/everett-capital-management-launching-technical-analysis-fund/
Ladies and gentlemen of the jury, we rest our case.....
---------------------------------
For the extra credit:
Describe Everett Capital Management.
Hurlbut: We're a hedge fund/alternative asset manager. The firm is registered as an investment adviser in the state of California. It is also registered as a commodity pool operator (CPO) with the NFA. I began the firm in December 2006 with capital raised from family members and former clients from Smith Barney. Recently, I added one new client -- a proprietary trading firm -- and I also advise another long-only portfolio. We currently have roughly $20 million in assets under management.
How would you describe your investment style?
Hurlbut: I focus on technical-trend-following investment strategies in global markets across individual stocks, commodities, futures and FX. It's a pretty simplistic trend-following strategy -- you're looking to capture price trends across these different asset classes, using relative strength, volatility breakouts and pattern recognition.We achieved 31.54 percent returns for the past 12 trailing months, through September 2011.
http://www.advancedtrading.com/managingthedesk/everett-capital-managements-todd-hurlbut/231901523