Is technical analysis getting the recognition it deserves in university studies?

Quote from optioncoach:

I chart the trends and price channels and look for breakouts of support and resistance. I am not predicting if it will rise or fall, I play the odds that a breakout of resistance is more likely than not to continue higher and break down through support is more likely to continue lower and trade off of that. Trading is about probabilities.
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Support/Resistance and Trends have value. I don't really consider that TA - that is chart reading to me. The problem with TA is the Fibber McGees, the McGanns, the Ellioticians, the Pitchforks, the Astros (and Jetsons? :). the Candlestick Pattern makers, the Stochastics, the Head & Shoulders and other TA sets. In spite of withering evidence that it really does not work, the believers hoot and howl.

Teach it in universities? Maybe in Fiction class...

A good indication? Go to the commodoties section of Freecharts.com. If you dig into the contracts, you will find that each has up to 2 years of daily results from about 10-12 classic TA indicators. Basically, it comes up to practically ZERO over all futures. I know - I painstakingly added them all up.
 
Chart reading is technical analysis. No one said it is just using moving average crossovers.

John Murphy degines TA as the study of market action primarily through the use of charts (price and volume) to forecast or predict market trends. More specifically I would say to analyze price action to make a determination of where future price is more likely than not going to move to and trading off of that whether it is in 1-minute time frames or daily or weekly.

TA is reading the charts and past price action to analyze and decide future actions (long, short, etc..).

Bollinger, Stochastics, MACD, etc... are just different tools to analyze the price action. Anyone who uses just one in isolation is going to lose money more often than not.
 
Quote from rcanfiel:

Support/Resistance and Trends have value. I don't really consider that TA - that is chart reading to me. The problem with TA is the Fibber McGees, the McGanns, the Ellioticians, the Pitchforks, the Astros (and Jetsons? :). the Candlestick Pattern makers, the Stochastics, the Head & Shoulders and other TA sets. In spite of withering evidence that it really does not work, the believers hoot and howl.

Teach it in universities? Maybe in Fiction class...

A good indication? Go to the commodoties section of Freecharts.com. If you dig into the contracts, you will find that each has up to 2 years of daily results from about 10-12 classic TA indicators. Basically, it comes up to practically ZERO over all futures. I know - I painstakingly added them all up.
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:D

Some TA indicators sound like drinks at Starbucks.
 
Just to be clear, I dont demand or expect people to use TA or that it must be taught to all traders/investors. I teach it so students are aware of another means of analyzing and trading stocks so when they leave the school they are well rounded when they go to work in the field. I am not there to advocate one style or time frame over another just like I dont push stock traders to trade options.

But I do use it and find it has merit as an analytical tool. But I have no desire to convince others who dont see it cause all that matters is making money, not how you make it.
 
I'd like to take a poke at distinguishing the difference between a "trend" of heads on coin flips and a trend in the ta world for my first post here...

A coin has no behavioral response to prior performance as we are talking about completely independent events. The probability of one toss = the probability of the next toss, etc. I'm sure I don't need to explain this...

The probability of a trend contiuing itself because it has done so in the past in regards to a chart comes down to the fundamentals of a stock, herd mentality, and other human perceptions of why a stock is moving.

Therefore, a stock that has gone up and continues to hit new highs has a higher probability of going up than one that has been hitting new lows because it is supported by the company's underlying structure (financials) which continue to outdue the company that is tanking and that many people will see as a "bargain" when the real bargain is the stock that continues to go up. This has nothing to do with the psychological aspect of the market, but as someone said previously, t.a. is no better indicator of future performance than fundamental analysis; however, when there are good fundamentals, the chances increase that technicals will be good as well and vice versa.

Then there's the psychological aspect which I am not as good with, but you yourself can fill in the scenarios. The higher a stock goes, the more shorts pile on hoping to call a top. Then it goes higher, shorts start getting scared and covering. Stock continues higher as no prior overhead price history means path of least resistance. Traveling in waves, the crowd will buy at tops and get shaken out right at the bottom when the people in the know give the stock support just in time to make it continue its trend. My thoughts on this are rather fragmented and I know this, but my general point was that a chart with a superb past price performance "looks" and "feels" safer and will of course draw further people in.

I am not going to claim to be a great trader... im pretty young at 19. Started trading on my birthday when I was 18 years old and have taken a numerous amount of hits and have numerous amounts of windfalls following both TA and FA methods and trying to integrate the two into a system of my own.

Just a little of my thoughts, though.
 
Quote from marketsurfer:

thats awesome, very very cool gesture by TOS. i no issue with TA being used intuitively as an artform( i look at charts) however, i have never seen a TA system that worked with profitable results over any reasonable amount of time. its soooo subjective rendering it far from a science.

best, surf
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Hi marketsurfer,

First of all, as stated several times in this thread...

Technical Analysis is a big area.

I have seen several TA systems that are profitable for at least since year 2000 used by a few Montreal traders.

There's no subjectivty.

Yes, there are some TA that can be subjective and there are some TA that's not subjective.

Simply, I use a method that has no subjectivity and I use another method that has a lot of subjectivity...

Both are profitable for many years.

Yet, I will say that because you can design just about anything...

That in itself is subjective.

Thus, just because you haven't seen a profitable method doesn't imply it doesn't exist.

I've seen such and that puts me outside the box in comparison to you (not a personal attack).

With that said and getting back on topic...

I think TA is starting to get recognition in the university studies as proof via the links I posted.

Is it at a level I would like to see...

No.

However, as soon as we get some college professor that has a proven profitable verifiable trading record...

That uses TA regardless if its primary or secondary methodology along with teaching accredited classes...

I think that's when things will start to pick up momentum for more recognition and further research.

Maybe it will lead to college degrees for the field of Technical Analysis in 10 - 20 years.

Teaching TA as accredited class and setting up trading rooms can be argue that its going in the right direction of getting more recognition.

Mark
 
Mark, your point gets right at the heart of the matter, and the earlier remarks I made.

How do you teach anything, let alone TA, at the university level, if it can't be standardized and taught in a way that it allows for a large group of people to look at the same data/metric, derive the same conclusion, and obtain the same results trading from it (by their independent, and not collective, efforts)?
 
Is that the measure you hold for all matters taught in university?

Cant you teach students what support and resistance are, what chart patterns are, what moving averages are, what oscillators are, what Dow Theory is, what are market cycles, etc...

Why teach options if you cant teach the students what specific strategies you need to use to make money and exactly how to use them to make money?

Why teach fundamental analysis if you cannot teach students how to EXACTLY price a security and derive a value for a stock?

I think you have a mindset against TA and see no value in its teaching unless someone can quantify it for you and show you exactly how it works 100% or the time. Is that what you were taught in college?

There are those who think futures are a zero sum game and no one can make money trading them. Should a professor specifically prove how you can make money with futures and show what methods you would use to disprove the theory one way or the other?
 
Quote from ByLoSellHi:

Mark, your point gets right at the heart of the matter, and the earlier remarks I made.

How do you teach anything, let alone TA, at the university level, if it can't be standardized and taught in a way that it allows for a large group of people to look at the same data/metric, derive the same conclusion, and obtain the same results trading from it (by their independent, and not collective, efforts)?
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Good question...I sent pm because it contains private info.

Quote from annaland:

What are its applications?
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I'm not trying to be sarcastic but if you don't know...

Why are you at this discussion forum?

Mark
 
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