How do technical traders fit into the greater scheme of things?

[viktor_k67]

I dont mean this to sound like a traditional "which is best technical analysis or fundamental". My question is to those of you more experienced economists, has their been a negative impact on fundamental trading since the rise of technical traders? Or in your opinion do they compliment each other? If in your opinion they dont compliment each other where does this leave the world of economics if more and more people make financial decisions not based on sound reason but computerised algorithms?

You have to understand that most of stocks' fundamentals data are updated once a
quarter - you may consider it as 3-month delay. Many market data are updated once a month - still a month delay.

Also, you have to remember that most of the fundamental analysts are analyzing the market and or stocks for a long-term trends. Nobody uses fundamentals in intraday trading. Technicians on the other hand are playing in shorter-terms. For long-term trends technicians still have to take a look at fundamentals.

The fact that in many cases fundamental and technical analysis are not aligned because analysts are referring to the different trend's time-frames. The biggest misunderstanding in comparison fundamental and technical traders is that these groups are trading in different by time-frame trends.

Still the best analysts on my opinion those who combines elements of fundamental and technical analysis.

 

[Xela]

I believe markets are there to meet the needs of fundmental decisions.

I don't even know what this means. What kind of "needs" do fundamental decisions have that are met by markets?

Fundamentals are already included in the market effects of technicals: prices change as a result of imbalances between buying and selling pressure, and fundamentals are part of the causes of those imbalances.

I'd appreciate the insights of somebody clever enough to see the markets from an economic standpoint

That's not me. I see economics more from a market standpoint.

Fortunately the article is not about Elliott Waves. Of course I'll concede his reason to reject them as "too gaudy" shows a fundamental misunderstanding for why they should be rejected.

I agree: I think they should be rejected because they're mystical, subjective and interpretative (and typically only with hindsight, too) - by the time you allow for the "extensions", "alterations", "truncations" and the interpretation of all of these, that their adherents habitually create and debate, to try to continue to justify and defend them, there isn't a single chart in the world that an Elliott Wave enthusiast can't fit in with his existing preconceptions. But are they making any money from it, apart from by trying to teach it to other people?

 

[Frederick Foresight]

HFT is built upon the random walk hypothesis

Really? So you know for a fact that all of the proprietary algorithms out there being run by all of the HFT outfits across the globe are uniformly and singularly premised on random walk? Fascinating.

 

[marketsurfer]

Really? So you know for a fact that all of the proprietary algorithms out there being run by all of the HFT outfits across the globe are uniformly and singularly premised on random walk? Fascinating.

Yes, HFT is based on the Random Walk as its base premise.

surf

 

[Frederick Foresight]

Yes, HFT is based on the Random Walk as its base premise.

surf

Without any supporting evidence, I guess we'll just have to accept it on your say-so.

 

[marketsurfer]

Without any supporting evidence, I guess we'll just have to accept it on your say-so.

As much as the TA parrots and monkeys wish it was so, HFT has nothing to do with TA. Why they care so much, is the only unknown.

One cubicle cowboy joker has even gone as far as to change words in posts in an effort to "kill" the messenger who destroyed his/her god. We find this quite entertaining. However, the effort to educate is becoming trying when confronted with such arrogance from the anonymous --

surf

 

[Frederick Foresight]

As much as the TA parrots and monkeys wish it was so, HFT has nothing to do with TA. Why they care so much, is the only unknown.

One cubicle cowboy joker has even gone as far as to change words in posts in an effort to "kill" the messenger who destroyed his/her god. We find this quite entertaining.

surf

I didn't say anything about HFT and TA. You did. Although, to the extent that TA means using prices to trade prices, I find it hard to discount TA, in its most basic form, as a constituent in most HFT algos. That's an assumption on my part. Meanwhile, you assert with certainty, and no evidence, to the contrary.

 

[Frederick Foresight]

Why they care so much, is the only unknown.

Apart from your own, personal and unfortunate experience with it, perhaps the same could be said about you...

 

[marketsurfer]

I didn't say anything about HFT and TA. You did. Although, to the extent that TA means using prices to trade prices, I find it hard to discount TA, in its most basic form, as a constituent in most HFT algos. That's an assumption on my part. Meanwhile, you assert with certainty, and no evidence, to the contrary.

Well, my initial premise was very destructive to the core beliefs of TA, therefore they have attacked my character and everything else with abandon. let me reexplain to show how TA fits into theme

The premise is the following-- 1. HFT is the most succesful trading method ever devised

2. The wide majority of volume is from HFT firms

3. HFT is built upon the random walk theory

4. Random walk is antithetical to TA

5. With the main volume provider being built on random walk, TA and its repeatable pattern/order nonsense becomes even more archaic since order does not come from randomness.

 

[marketsurfer]

Apart from your own, personal and unfortunate experience with it, perhaps the same could be said about you...

No, i make $$ coming up with new ideas-- elite is sometimes a good source of such. why else would I engage in such a fashion?