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

[marketsurfer]

Quote from Bernoulli:

The reason that TA as described here is not taught is that there is really no body of knowledge -- just conjecture, hope, what have you.

It doesn't mean that there won't be, however. Over the past fifteen plus years there has been a lot of statistical work done with high-frequency price data, looking at issues such as price formation, market microstructure and volatility. There have been conferences at places like Princeton and Chicago that have looked at some of the results. The statistical tools are not easy to master, but there are statistics courses where they are taught and where they work with financial data.

did not the prediction company travel this road? my contention is once this point is reached should it ever happen..... markets would cease to exist in their present form.... as randomness and the unknown are the only prime drivers.
best regards
surf

 

[ByLoSellHi]

Quote from marketsurfer:

did not the prediction company travel this road? my contention is once this point is reached should it ever happen..... markets would cease to exist in their present form.... as randomness and the unknown are the only prime drivers.
best regards
surf

I remarked on this, as well, Surf.

If one assumes that TA can truly be adapted so that it predicts future movements with a level of accuracy that even roughly approximates other areas of science, medicine, engineering, etc., than it will become so widely dispersed and digested by market participants that it won't bestow any competitive advantage on those who adopt it.

Of course, some intelligent people believe that TA has already morphed into an accurate forecasting tool. Even if this were true, how much time will pass before it no longer bestows a competitive advantage on those who have already adopted it and who claim to be using it successfully?

 

[kidPWRtrader]

Quote from ByLoSellHi:

I remarked on this, as well, Surf.

If one assumes that TA can truly be adapted so that it predicts future movements with a level of accuracy that even roughly approximates other areas of science, medicine, engineering, etc., than it will become so widely dispersed and digested by market participants that it won't bestow any competitive advantage on those who adopt it.

Of course, some intelligent people believe that TA has already morphed into an accurate forecasting tool. Even if this were true, how much time will pass before it no longer bestows a competitive advantage on those who have already adopted it and who claim to be using it successfully?

What you are saying happens all the time. Look back to the old TA books like Magees for instance when head and shoulders patterns, double bottoms, double tops, and any other easily recognizable patterns wernt well known. Look at how well those predicted price before and now look at how the same patterns will whip so many traders either faking them out, or going just so far as to trigger stops and take out the traders with the tight stops and others with a weak gut before resuming the pattern.

You cant rely on basic setups anymore. Finding your own setups seems to be key... getting in unconventional areas most people dont notice maybe and exploiting that strategy until your entry is known and then its absolete and you are back to square one.

Professionals KNOW the well known patterns better than your average joe that just started reading about this stuff a year ago and will go after these guys.

 

[Bernoulli]

Quote from marketsurfer:

did not the prediction company travel this road? my contention is once this point is reached should it ever happen..... markets would cease to exist in their present form.... as randomness and the unknown are the only prime drivers.
surf

Prediction Co. did, but I don't know how well they did (except that they sold themselves so I guess they did OK), but I do know that Doyne Farmer is still working with HF data (at least as of a couple years ago).

As to the second point, you certainly would be supported in that view by neoclassical economics but I'm not sure it reflects reality. Case in point, the FX market, highly liquid, 24 hour market, but the traditional pricing models -- PPP, interest rate parity, etc. -- do a poor job of forecasting rates, which are dominated by short-term flows.

If capital were infinite all opportunity might be traded away resulting in randomness as you suggest, but it is finite so as it adjusts to new opportunities the adjustment process will lead to new opportunities.

Also if the market were in your random state, market participants would leave for other, better opportunities, thus creating more trading opportunities.

Lastly, even with the unknown as the only driver, any shock to the system sets off an adjustment process, which usually includes overshooting, and there is trading opportunity in that process.

 

[Bernoulli]

Quote from kidPWRtrader:

What you are saying happens all the time. Look back to the old TA books like Magees for instance when head and shoulders patterns, double bottoms, double tops, and any other easily recognizable patterns wernt well known. Look at how well those predicted price before and now look at how the same patterns will whip so many traders either faking them out, or going just so far as to trigger stops and take out the traders with the tight stops and others with a weak gut before resuming the pattern.

You cant rely on basic setups anymore. Finding your own setups seems to be key... getting in unconventional areas most people dont notice maybe and exploiting that strategy until your entry is known and then its absolete and you are back to square one.

Professionals KNOW the well known patterns better than your average joe that just started reading about this stuff a year ago and will go after these guys.

You can see this process practically daily in the markets, in which traders are conditioned to respond to price change in some way ("buy the dips") to the point where everybody is doing it -- and then the market "inexplicably" falls apart. I love it when everybody's thinking the same thing . . . .

 

[talontrading]

furthermore --does 10 heads in a row in a coin flip indicate a "heads trend"? if it doesn't, why does 10 levels of increased stock price, indicate an uptrend?? [/B]

Surf, don't be an idiot. Prices are not coin flips. 5 minutes with Excel (if that's all you got) would show you there is serial dependency on some timeframes. Add that to some fairly predictable elements of volatility and you're close to having something interesting.

This can be quantified and tested. I've done it.

 

[NihabaAshi]

Quote from marketsurfer:

very weak. I was hoping for an answer since the answer would answer the university question. apparently there isn't one.

surf

Are you asking me to say something that optioncoach has already said but in a way that's different?

What he said is much better than what I could say.

However, since you seem to be asking something a little different...

Rephrase the question and ask it again.

I'll try to give a reply that hasn't already been said in this thread.

Yet, be aware I'm not here to prove a point to you especially in light that you seem to not believe there were any accredited classes in TA when you could have done your own research instead of requesting proof (asking for a link).

Therefore, if you don't dig my opinion...that's alright by me and we agree to disagree.

Once again, please rephrase your question and I'll reply.

Mark

 

[LeonPhelps]

Quote from optioncoach:

George Washington University

Sorry if the pic distorts the page..

Ahhh...GW.

/The Movie "Big"

 

[El OchoCinco]

lol

 

[jasonk1]

Going back to this forum topic, I do think TA is getting a lot of criticisms from academics, for reasons stated by other ET memebers above.

I do think TA should get taught a bit more in uni, and a good academics should not be biased towards any discpline, they should only expose the students to the area of TA, then let the kids to decide where to go from there.

Then again, the current college system is more about showing the kids the path taken by majority of people, not about teaching them how to be entreprenial or taking risk.

So unless some renowned professor starts appraising TA worldwide (for using TA as one of the arsenals, not the only one arsenal), or a complete change of teaching mentality in college, otherwise its goin to take a long time for TA to get the recongition it deserves in most uni.

cheers

jason