Simple defense of technical analysis

[marketsurfer]

Quote from toc:

Regarding TA defense, here is another logic............markets soon ditch a product that does not prove its worth, be it running shoes a new model car or a trading system etc. TA has been around for decades and getting more advanced. This alone proves that TA works for those who learn to tune it to their trading styles.

LOL! Astrology is still ultra popular as is all the ghost shows on TV. Your claim is ridiculous.

 

[Wide Tailz]

Quote from ammo:

havent a lot of knowledge in ufc but i was under the impression that those strongest in wrestling had an advantage,wonder what skill would count as the strongest to have in reading the market along with the others

Perhaps "sizing up the general conditions and overall market trend"......

 

[oldtime]

I'm old fashioned. I still like boxing. I don't want to see men in bear feet. They look like little babies. Put some shoes on and fight like a man.

 

[toc]

Quote from marketsurfer:

LOL! Astrology is still ultra popular as is all the ghost shows on TV. Your claim is ridiculous.

Is that why the totally fundamental based manager of mutual fund looks like an idiot during the market corrections and mostly is not able to beat index results even in 3-5 year term or is it that those who eek out couple of point above the index performance, do lots of TA under the table. Hypocrisy!

 

[viktor_k67]

I see a lot of fundamentals here. Let me ask you a few questions:

1. How do you evaluate real value of a company?
2. How do you know when the stop is overpriced (price of a stock is higher then the real value of a company)?
3. How do you know for how long your stock going to be pumped or dumped?
4. How do you use fundamental analysis on intraday level?

There could be a lot of questions, and I'm sure there will not be a lot of answers. Yes, you are using fundamentals and some of you makes money which is good, yet your analysis is quite limited. Most of you are long-term traders and etc...

I'm not telling that FA is wrong. In my opinion, when you trade stocks in long-term it should be part of your analysis. However, by going into lower time-frames FA becomes less important and on some time-frames it is becomes simply useless.

If you want to discuss FA versus TA you have to specify time-frame you apply it to and then defend your point.

At the end, if you make money - you are right no matter what you use. Even if you flip the coin and your profit exceed your losses - you are right.

 

[trader198]

TA is non-sense always in my humble view.

does an erathquake write on a chart?

does a lawsuit write on a chart?

does an accounting scandal write on a chart?

does a bad earning write on a chart?

does a buyout write on a chart?

.....

none of them.

I thought AMRN always worth nothing, a crap company. by chance bought lots of puts yesterday, did not realize AH made huge news they need more money, what a junk! all I know is this company always does that, a garbage company.

all those are not wriiten on the chart.

this week, MMRs' buyout suprised me. I almost followed the drop to death, but boom exploded.

also this week COST announced special dividend, on the chart it dropped 7 bucks, in reality it did not move at all. chartist will argue where the support is and where the resistance is, what a non-sense!

TA is just peiece of junk. never should consider it as an useful tools. that is why 90% lose, since they are technical savvy. forget about the fact: trading is a speculation game.

speculation needs intelligence, mind, not mechincal robot work. just like a detective, based on not enough evidence, subtle clue to pin down what the truth is.

I shorted AAPL at 680/650/630/600, keep 300shares of short position of AAPL to remind me: no company can be a star forever, it is a cycle. star rises, then sink, even dispear. there is no technical behind, just a fact. the mother nature law.

belive in god, you are not technical any more, you are more objective, you know how to accpet fact, admit fact, and take advantage of the fact, accept GOd's gift.

 

[marketsurfer]

Quote from toc:

Is that why the totally fundamental based manager of mutual fund looks like an idiot during the market corrections and mostly is not able to beat index results even in 3-5 year term or is it that those who eek out couple of point above the index performance, do lots of TA under the table. Hypocrisy!

Huh? lots of mutual funds beat the market---

 

[tommo]

Im not trying to make an argument one way or another just passing on my observations.

I have been a professional trader for 7 years. And not just trading from home i mean on trading floors with hundreds traders .Ive never known one of them make money from technical analysis. Some of them dont even have charts. People will be aware of things like where there might be some support line etc. But most of the edges are far more specific in trading .Reading an algo in the order book, reacting to news releases, arbitrage strategies etc. My own personal experiences, the only time i had a losing year was when i tried running some technical systems( and yes i had good risk management, only risked 1% of account, followed system religiously etc etc)

I am not saying it cant be done, i want to make that clear. I guess im just not very good at it, but ive been around the block a bit, thought my comment might be of some interest.

 

[ammo]

Quote from tommo:

Im not trying to make an argument one way or another just passing on my observations.

I have been a professional trader for 7 years. And not just trading from home i mean on trading floors with hundreds traders .Ive never known one of them make money from technical analysis. Some of them dont even have charts. People will be aware of things like where there might be some support line etc. But most of the edges are far more specific in trading .Reading an algo in the order book, reacting to news releases, arbitrage strategies etc. My own personal experiences, the only time i had a losing year was when i tried running some technical systems( and yes i had good risk management, only risked 1% of account, followed system religiously etc etc)

I am not saying it cant be done, i want to make that clear. I guess im just not very good at it, but ive been around the block a bit, thought my comment might be of some interest.

in the pit you can watch order flow,feel tempo,your part of the herd,sitting in front of a screen alone your a blind man on the bus,he listens for the next stop,at home those next targets are on the chart,not saying they will hold ,stop there, but you know where the group (large or small) of buyers or sellers are waiting

 

[tommo]

ammo,

not sure if you were suggesting i traded in the pits. I dont, i trade on screens. Im from Europe, id love to have traded in the pits but they were closing over here just as i was getting into the business