Rcanfiel: What Doesn't Work on Wall Street
- Thread starter Duref Mudgins
- Start date
Thank you for the kind invitation to comment here, mr. mudgins.
i believe its time to clarify my views on TA as they appear to be greatly misunderstood by many on elite trader.
i was a TA true believer for many years as is evidenced by my writings and "master interview" published in 2003/4. my style and market philosophy has evolved since this time primarily due to fortunately becoming associated with several big money hedge fund managers who took the time to explain to me what works/does not work in the markets combined with intensive self-study.
TA is descriptive not predictive, and as a descriptive discipline its quite effective. However, i do believe that TA combined with intuition has value in trading, its the systematic TA, such as the type pushed on elite, that fail when tested objectively. some of these traders actually threaten legal action when questioned about why they don't submit their systems to objective testing services.
intuitive style TA can not be tested objective as it relies on multiple ( often unknown ) inputs/data from ones mind combined with watching price action. however one MUST ALWAYS keep in mind that TA by definition is the past, as is volume.
i just scratched the surface here, and im happy to field any questions one may have on these ideas.
Best wishes,
surf
Quote from austinp:
This will be my last reply to you, because first you reinterpret much of what I said and then ask why I didn't give replies that made you happy.
I didn't offer a valid book suggestion on teaching someone the inner workings, guts & bolts of trading successfully because there isn't one. In other words, none exist. The only books in print teach (at best) tiny snippets of value amidst volumes of irrelevant stuff.
This is too preposterous a statement to comment on. You assert that it is ridiculous to disregard TA, and then you sweep away every book in existence because of your belief. I am sure you have read each and every one to make this claim. I am also sure that all other traders would agree with you ...NOT.
While I am, my time was spent redirecting the misdirected that tech analysis does work. If it doesn't work, what the hell may I ask does?
That is an unconvincing response. Hmm - there is estimates that perhaps 90% of traders use TA and that over 90% lose... Wonder if there is a connection? I suppose Fundamental Analysis, Seasonals and a whole bunch of other things don't exist?
definition of tech analysis that works profitably is subjective. Here's my definition: using ANY type of price action OR indicator derived from price movement(action) to determine buy, sell and trade management decisions.
I already addressed this, but you apparently ignored this also. Restating it based on your definition does not make it any more authorative. There are lots of people here on ET who state they disregard TA and only focus on price action. Shoving it back into TA does not evidence TA. I have no problem with pure price action, sans the cacophony of indicators.
Remember, this system is based on TA. The computer reads a chart, makes emotionless trade decisions and acts on them accordingly. Here are 4 years and 10 months worth of black & white, quantifiable, purely objective data. Y'all let me know if this example of TA works or not.
No. You would be laughed out of the investment office if this is your concept of definitive proof. Why don't you work on overcoming the multi-decade published studies on dozens of indicators using many different parameters performed by dozens of entities. These have withstood far more scrutiny than your TS run. They are also far less vague
As I said, I give up on reading your followups.
This will be my last reply to you, because first you reinterpret much of what I said and then ask why I didn't give replies that made you happy.
I didn't offer a valid book suggestion on teaching someone the inner workings, guts & bolts of trading successfully because there isn't one. In other words, none exist. The only books in print teach (at best) tiny snippets of value amidst volumes of irrelevant stuff.
This is too preposterous a statement to comment on. You assert that it is ridiculous to disregard TA, and then you sweep away every book in existence because of your belief. I am sure you have read each and every one to make this claim. I am also sure that all other traders would agree with you ...NOT.
While I am, my time was spent redirecting the misdirected that tech analysis does work. If it doesn't work, what the hell may I ask does?
That is an unconvincing response. Hmm - there is estimates that perhaps 90% of traders use TA and that over 90% lose... Wonder if there is a connection? I suppose Fundamental Analysis, Seasonals and a whole bunch of other things don't exist?
definition of tech analysis that works profitably is subjective. Here's my definition: using ANY type of price action OR indicator derived from price movement(action) to determine buy, sell and trade management decisions.
I already addressed this, but you apparently ignored this also. Restating it based on your definition does not make it any more authorative. There are lots of people here on ET who state they disregard TA and only focus on price action. Shoving it back into TA does not evidence TA. I have no problem with pure price action, sans the cacophony of indicators.
Remember, this system is based on TA. The computer reads a chart, makes emotionless trade decisions and acts on them accordingly. Here are 4 years and 10 months worth of black & white, quantifiable, purely objective data. Y'all let me know if this example of TA works or not.
No. You would be laughed out of the investment office if this is your concept of definitive proof. Why don't you work on overcoming the multi-decade published studies on dozens of indicators using many different parameters performed by dozens of entities. These have withstood far more scrutiny than your TS run. They are also far less vague
As I said, I give up on reading your followups.
That's partially correct.
More accurately, most traders that use TA fail at using it because of an inadequate trading plan for using TA.
Therefore, 90% of traders do not fail because of TA itself...
They failed because they didn't use it properly and/or don't have a proper trading plan as seen in countless of ET threads (including several well documented journals) that's the norm when replies to questions reveals the traders lack of a trading plan beyond the entry signal regardless if the method involves indicators or price action only trading.
Further, to ensure they fail at using TA...these same traders would rather spend time trying to tweak or change their entry signal instead of using the same energy to develop an adequate trading plan.
Once again, take a long look at all the countless of ET threads where traders are asking serious of questions about something beyond the entry signal...
These are traders trying to put the other pieces of the puzzle in place while still trading.
However, most run out of time (call it quits) or blow up the account prior to finding those other missing pieces to the puzzle.
Of those traders that fail...a few of them will play the blame game...
It was TA that did me in...TA doesn't work.
Thus, its absurd or narror minded to think they are losing because they are using TA when in fact they can't find the other missing components to successful trading or underestimated the importance of those other missing components.
Those missing components (mentioned below) enables traders to minimize drawdowns, adapt to changing markets and make trading a profitable career.
Don't be lazy, take the time to talk to some of those 5 - 10% profitable traders and they aren't only talking about entry signals.
Another partially true statement.
However, I have to agree with austinp on this in that anytime someone uses charts or price quotes to make trade decisions or analyze the markets...
It's Technical Analysis.
However, as you have, I too have seen many ET members say they don't use TA and only use price action for trading.
I've also seen just as many say they don't use indicators and only price action only (I'm in this particular camp).
Probably just a waste of time to debate about the semantics or definition of TA since many have a difference of opinion depending upon how they started their trading careers.
Simply, there's no right or wrong here.
With all that said above and with all the past threads arguing about the same old TA debate...
I'm a strong believer based upon my own trading experiences and the trading experiences of those I've seen trade with my own two eyes along with seeing proof of their profitability (not many)...
Successful application of technical analysis goes far beyond the entry signal.
In addition, I can't understand why so many individuals believe the edge can only be defined by the entry signal.
I've met too many system designers with this narrow minded approach
I also don't understand why system designers have tunnel vision towards the entry signal when profitable traders around them aren't focusing only on the entry signals...
Profitable traders knows there more than one piece to the puzzle (entry signal represent one piece).
Therefore, the real issue to me is really about how to apply TA so that its profitable and if (usually is) that profitability is dependent upon proper capitalization, money management, position size management, market experience, discipline, communication, collaboration, adequate equipment and many other things that can't be coded but can an edge...
So be it.
Yet, at the same time, I do understand why so many traders are bent on debating, testing, arguing about the entry signal because when I see many websites, charting programs, data providers promoting TA as the only thing that's needed for successful trading regardless if its about indicators or price action only...
I say I don't believe pigs can fly.
However, realistically if the above vendors talk about the things that really determine a traders success...
They'll go out of business because its a lot tougher to sell the concepts of money management and all the other things I mentioned above that provides the most important edge.
Simply, all this TA bashing isn't going to change anything because next year's charting programs will say the following...
We've added more indicators.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
Quote from NihabaAshi:
That's partially correct.
More accurately, most traders that use TA fail at using it because of an inadequate trading plan for using TA.
Therefore, 90% of traders do not fail because of TA itself...
They failed because they didn't use it properly and/or don't have a proper trading plan as seen in countless of ET threads (including several well documented journals) that's the norm when replies to questions reveals the traders lack of a trading plan beyond the entry signal regardless if the method involves indicators or price action only trading.
Further, to ensure they fail at using TA...these same traders would rather spend time trying to tweak or change their entry signal instead of using the same energy to develop an adequate trading plan.
Once again, take a long look at all the countless of ET threads where traders are asking serious of questions about something beyond the entry signal...
These are traders trying to put the other pieces of the puzzle in place while still trading.
However, most run out of time (call it quits) or blow up the account prior to finding those other missing pieces to the puzzle.
Of those traders that fail...a few of them will play the blame game...
It was TA that did me in...TA doesn't work.
Thus, its absurd or narror minded to think they are losing because they are using TA when in fact they can't find the other missing components to successful trading or underestimated the importance of those other missing components.
Those missing components (mentioned below) enables traders to minimize drawdowns, adapt to changing markets and make trading a profitable career.
Don't be lazy, take the time to talk to some of those 5 - 10% profitable traders and they aren't only talking about entry signals.
Another partially true statement.
However, I have to agree with austinp on this in that anytime someone uses charts or price quotes to make trade decisions or analyze the markets...
It's Technical Analysis.
However, as you have, I too have seen many ET members say they don't use TA and only use price action for trading.
I've also seen just as many say they don't use indicators and only price action only (I'm in this particular camp).
Probably just a waste of time to debate about the semantics or definition of TA since many have a difference of opinion depending upon how they started their trading careers.
Simply, there's no right or wrong here.
With all that said above and with all the past threads arguing about the same old TA debate...
I'm a strong believer based upon my own trading experiences and the trading experiences of those I've seen trade with my own two eyes along with seeing proof of their profitability (not many)...
Successful application of technical analysis goes far beyond the entry signal.
In addition, I can't understand why so many individuals believe the edge can only be defined by the entry signal.
I've met too many system designers with this narrow minded approach
I also don't understand why system designers have tunnel vision towards the entry signal when profitable traders around them aren't focusing only on the entry signals...
Profitable traders knows there more than one piece to the puzzle (entry signal represent one piece).
Therefore, the real issue to me is really about how to apply TA so that its profitable and if (usually is) that profitability is dependent upon proper capitalization, money management, position size management, market experience, discipline, communication, collaboration, adequate equipment and many other things that can't be coded but can an edge...
So be it.
Yet, at the same time, I do understand why so many traders are bent on debating, testing, arguing about the entry signal because when I see many websites, charting programs, data providers promoting TA as the only thing that's needed for successful trading regardless if its about indicators or price action only...
I say I don't believe pigs can fly.
However, realistically if the above vendors talk about the things that really determine a traders success...
They'll go out of business because its a lot tougher to sell the concepts of money management and all the other things I mentioned above that provides the most important edge.
Simply, all this TA bashing isn't going to change anything because next year's charting programs will say the following...
We've added more indicators.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
mr.ashi,
patterns are part of the definition of TA. if you remove patterns, it's no longer TA--no matter what you or the other TA aficionados state. have you considered if you remove TA from your above post, one could still have a valid trading system that works? your correct, TA is not why most traders fail,however, it's not why ANY trader succeeds. you like it, particularly the kind that makes pretty patterns called candle sticks ( judging from your name) therefore it gives you confidence to trade--nothing wrong with this and it serves a function--- however when it comes right down to it---your guessing if a certain pattern will continue( or work again), there is no edge here.
surf
Agree and I never said it wasn't although there are many ET members that believe price patterns are not TA.
Agree and I never said TA alone was why most traders succeed (see comments about those missing components or pieces of the puzzle) regardless if they use indicators or price action only.
Incorrect...Japanese Candlesticks do not give me confidence in trading via the way you implied because my understanding of the price action gives me confidence.
JC is just a confirmation tool and it is not a primary method for me as explained many times in all the Japanese Candlestick threads I've participated in.
Also, many traders commonly applied it incorrectly as I've shown in many different threads after traders ask that infamous question...
What am I doing wrong???
For starters...don't use it alone nor use it to define the price action and don't listen to those that hype it for use as such. Simply, you should understand the price action prior to the appearance of any pattern signal. If not, its not a valid pattern signal.
Therefore, no guessing involved and as I specifically suggested along with identifying particular categories in my prior message...there are many other edges much more important than the entry signal.
Go to bed surf...you need to get some sleep because you seem to be guessing (judging) about how I use Japanese Candlesticks based upon my user ID alone.
I didn't realize one could see a complete trading plan in those two words.
As for me, my sick toddler is keeping me up late.
P.S. The name NihabaAshi (actually two words) was selected because it has to do with martial arts even though I did get several hate mail when I first arrived at ET (many thought it was muslim).
It's also a term in Japanese Candlestick Analysis.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
Quote from NihabaAshi:
Agree and I never said it wasn't although there are many ET members that believe price patterns are not TA.
Agree and I never said TA alone was why most traders succeed (see comments about those missing components or pieces of the puzzle) regardless if they use indicators or price action only.
Incorrect...Japanese Candlesticks do not give me confidence in trading via the way you implied because my understanding of the price action gives me confidence.
JC is just a confirmation tool and it is not a primary method for me as explained many times in all the Japanese Candlestick threads I've participated in.
Also, many traders commonly applied it incorrectly as I've shown in many different threads after traders ask that infamous question...
What am I doing wrong???
For starters...don't use it alone nor use it to define the price action and don't listen to those that hype it for use as such. Simply, you should understand the price action prior to the appearance of any pattern signal. If not, its not a valid pattern signal.
Therefore, no guessing involved and as I specifically suggested along with identifying particular categories in my prior message...there are many other edges much more important than the entry signal.
Go to bed surf...you need to get some sleep because you seem to be guessing (judging) about how I use Japanese Candlesticks based upon my user ID alone.
I didn't realize one could see a complete trading plan in those two words.
As for me, my sick toddler is keeping me up late.
P.S. The name NihabaAshi (actually two words) was selected because it has to do with martial arts even though I did get several hate mail when I first arrived at ET (many thought it was muslim).
It's also a term in Japanese Candlestick Analysis.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
ok, thanks for the clarifications. we are likely more alike in market philosophy than i first thought00( although still very different) but thats what makes the market work! yeah, i understand the sick toddler, i have 2 myself. good thread/good post.
peace,
surf
<i>"No. You would be laughed out of the investment office if this is your concept of definitive proof. Why don't you work on overcoming the multi-decade published studies on dozens of indicators using many different parameters performed by dozens of entities. These have withstood far more scrutiny than your TS run. They are also far less vague
As I said, I give up on reading your followups. "</i>
At least we agree on one aspect.. I give up, too. Before I put you on ignore, let me leave you with a suggestion: please feel free to laugh me out of your investment office tomorrow and every day. Have at it.
As you enjoy your daily commute to & fro that j.o.b. noted in the first page of this thread, I'll be making my own commute as well. From all the way upstairs down to my office, day trade the ES a couple of hours while watching my new 1acre pond that TA = ES built fill with water just outside.
Last week I "worked" a total of six hours max. Booked +20pts ES with relative ease, markets offered much more than that for those adept at using TA. If I cared more, it would have easily been +50pts. But... money isn't everything, and 40hr work weeks sure as hell ain't for me any more. Daytrader's luxury to work little, earn lots
Go ahead and stick with your closed-minded beliefs. I've met you 1,000 times before in this profession. Some people = things never change.
As I said, I give up on reading your followups. "</i>
At least we agree on one aspect.. I give up, too. Before I put you on ignore, let me leave you with a suggestion: please feel free to laugh me out of your investment office tomorrow and every day. Have at it.
As you enjoy your daily commute to & fro that j.o.b. noted in the first page of this thread, I'll be making my own commute as well. From all the way upstairs down to my office, day trade the ES a couple of hours while watching my new 1acre pond that TA = ES built fill with water just outside.
Last week I "worked" a total of six hours max. Booked +20pts ES with relative ease, markets offered much more than that for those adept at using TA. If I cared more, it would have easily been +50pts. But... money isn't everything, and 40hr work weeks sure as hell ain't for me any more. Daytrader's luxury to work little, earn lots
Go ahead and stick with your closed-minded beliefs. I've met you 1,000 times before in this profession. Some people = things never change.
Great. I made 36. Took about 75 minutes (15 min/morning):
M - S, T - L, W - L, R - L, F- flat
No rainbow of indicators. And as I said, I happen to like the office.
"while watching my new 1acre pond that TA = ES built fill with water just outside" "If I cared more, it would have easily been +50pts"
I have met people like you, who think they are hot stuff. Try a little humility, and you will look less like a 3 year old yelling "look at me, look at me." You don't take it with you when you enter the afterlife, and there are no UHaul trailers behind the hearse
LOL you two, you got your wish Duref, this thread is offically trashed.
From where I'm sitting, about to go out and get my morning coffee and juice, you're both better off than I am, with job being slowly outsourced, as I work to build my stash so that I no longer have to go to work and deal with people who look like fucking retards compared to any profitable trader on this board.
Good trading,
JJ
From where I'm sitting, about to go out and get my morning coffee and juice, you're both better off than I am, with job being slowly outsourced, as I work to build my stash so that I no longer have to go to work and deal with people who look like fucking retards compared to any profitable trader on this board.
Good trading,
JJ