My only edge is technical analysis

[Laissez Faire]

I hear what you’re saying and agree with you. My point of contention is in that a manual review of time series data is inferior to a quantitative analysis of it. If your trading process is to look at a chart and then make a trading decision, you do not have an analytical edge over your competitors (phds conducting serious analysis on time-series across multiple dimensions). You in fact may be completely unaware of your competition, which is a very dangerous and unsuccessful way to trade.

To clarify: I’m not saying that looking at chart can’t be helpful. I’m saying it’s not a source of edge. Pick any “old school” trader here who has been reading charts for 10 years+. I guarantee that they will not have an analytical edge over a quant with the same years of experience. In fact the difference between the two will be quite substantial.

That's possible. I like to keep an open mind. From what I've picked up there's been many quantitative funds and players who have not done very well, too. So, I don't see any proof that quants by default would be better.

Personally, I use a hybrid approach and I guess it would be correct to say that I don't look much at time series per se. But I'm not sure that adds anything to this discussion. Also, from my own amateur quantitative work, I know it's a complex area and there's always a ton of variables to account for. I can see where a human could excel and how there is stuff that's simply hard to code.

Anyway, what are your thoughts on equities moving forward? Is the correction over by now or will the selling continue...?

You should join us retail amateurs on the ES Journal. Even poopy is becoming a regular now.

 

[Sergio123]

How? Is the market now efficiently priced? What's the benefit of using TA in this scenario?

By grabbing it in real time.
There can be temporary imbalances in longer timeframes too plus there is a positive drift on the S&P.

People need to put their retirement savings somewhere.

 

[longandshort]

Okay, and?

https://seekingalpha.com/article/70805-when-quants-fail

He's talking about a few quants (e.g. LTCM). What you should take away from his post is that by the mid-90s, "TA" and chart analysis was already outdated. There's no silver bullet and for every smart quant, there's a team of smart quants going after them. In real life, the markets are extremely competitive and market participants must constantly improve their strategies to succeed.

 

[longandshort]

That's possible. I like to keep an open mind. From what I've picked up there's been many quantitative funds and players who have not done very well, too. So, I don't see any proof that quants by default would be better.

Personally, I use a hybrid approach and I guess it would be correct to say that I don't look much at time series per se. But I'm not sure that adds anything to this discussion. Also, from my own amateur quantitative work, I know it's a complex area and there's always a ton of variables to account for. I can see where a human could excel and how there is stuff that's simply hard to code.

Anyway, what are your thoughts on equities moving forward? Is the correction over by now or will the selling continue...?

You should join us retail amateurs on the ES Journal. Even poopy is becoming a regular now.

Here's a snippet from my investor letter (June):

 

[poopy]

Here's a snippet from my investor letter (June):

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I got this letter early.

 

[Laissez Faire]

Here's a snippet from my investor letter (June):

Interesting read. Thanks.

 

[schizo]

Less than a month.
Yes.

she also has crabs

why would a double bottom mean anything.

Oh crap, you better pass if she has crabs.

It ain't the double bottom that's important. It's this human foible that makes one return back to the crime scene only to get caught. Same principle applies in the market. Ya see, price action ain't just about price. It must also utilize market psychology, which can be seen in certain patterns like double bottoms.

 

[Steve777]

Am I in trouble?
What other edges should I look for

Technical analysis is nothing but idiots applying random low-pass filters to their data and thinking it means something. It's like when people did voodoo and religion instead of science

 

[Frederick Foresight]

He's talking about a few quants (e.g. LTCM). What you should take away from his post is that by the mid-90s, "TA" and chart analysis was already outdated. There's no silver bullet and for every smart quant, there's a team of smart quants going after them. In real life, the markets are extremely competitive and market participants must constantly improve their strategies to succeed.

And despite all that, the majority of managed mutual funds underperform the market. Same goes for hedge funds:

https://www.linkedin.com/pulse/hedge-funds-vs-sp-500-truth-investment-returns-amr-elharony-hmysf

And I’m guessing most of them use some fairly sophisticated analytical tools, too.

Even guys like John Paulson, who made a pant load of money in 2008 had some less than stellar performance in the following years. Should we be automatically dismissive? Broken clock?

In his book, The Little Book of Common Sense Investing, John Bogle shows that even well-performing funds mostly don’t perform well consistently. On balance, there is little reason to be confident that a fund that performed well in the last few years will do so in the next few. Broken clock?

 

[Laissez Faire]

Here's a snippet from my investor letter (June):

The stuff on positioning is interesting. Ever heard of Jason Shapiro? His entire approach is from what I understand based on positioning, i.e., when one side gets crowded.

I like to watch his free videos. Not up to date on this week, but last I checked he said he was not shorting equities yet based on his data.