TA - Objective or Psychological Skill?

[cornix]

Quote from wrbtrader:

I will assume this is NOT the thread you mention in your "Cornix TA Performance" thread that there will be correlate the TA to the performance especially considering your performance thread is real money whereas this thread the TA is hypothetical...

Correct ?

Also, what's a PD...maybe Price Direction ?

Your performance thread involves real money day trading whereas the hypothetical trades posted in this thread seems like they are swing trades.

Yes, this analysis here is not correlated to my journal. Rather it's just a set of TA observations, which are welcome to be discussed from analytical point of view.

As for "PD's", I think everyone and his dog on ET knows what the infamous "PD's" are since about last Autumn or so thanks to Surf.

 

[MAESTRO]

I propose the following experiment. Pick a bar chart. Any time frame, any security. Squint your eyes until you see a blurred image. Take a pencil and draw a line that is roughly following the mid points of the bars. Test a system where you “BUY” if the close of the bar is above this line and “SELL” when it is below. This is all of TA in a nutshell. I challenge everybody to verify that this as good as any other TA based trading systems. Once you verify it for yourself I will then give a fully disclosed logical reason why this approach has positive expectations and why it is relatively irrelevant how you draw your lines on the chart. I will also attempt to prove that any TA based system have roughly the same probability of succeeding. It has nothing to do with TA; it has everything to do with the imminent data distribution skews.

So, answering your original question. It is neither psychology nor any other science that makes TA work some times. It is the embedded distribution skews based patterns that anybody can capture using free hand drawn line. Even a 5 year old retard can make those lines on the chart and they will still work the same way as any other lines produced by any highly sophisticated TA!

Cheers,

MAESTRO

 

[cornix]

TA called the recent 400+ point drop in YM with maximum heat of only about 25 points even using just the daily chart as entry time-frame.

Notice how it's far superior as a timing tool vs. fundamental analysis which may catch the direction correctly (as Surf recently demonstrated), but has nearly non-existent timing.

 

[outsource100]

Quote from MAESTRO:

I propose the following experiment. Pick a bar chart. Any time frame, any security. Squint your eyes until you see a blurred image. Take a pencil and draw a line that is roughly following the mid points of the bars. Test a system where you “BUY” if the close of the bar is above this line and “SELL” when it is below. This is all of TA in a nutshell. I challenge everybody to verify that this as good as any other TA based trading systems. Once you verify it for yourself I will then give a fully disclosed logical reason why this approach has positive expectations and why it is relatively irrelevant how you draw your lines on the chart. I will also attempt to prove that any TA based system have roughly the same probability of succeeding. It has nothing to do with TA; it has everything to do with the imminent data distribution skews.

So, answering your original question. It is neither psychology nor any other science that makes TA work some times. It is the embedded distribution skews based patterns that anybody can capture using free hand drawn line. Even a 5 year old retard can make those lines on the chart and they will still work the same way as any other lines produced by any highly sophisticated TA!

Cheers,

MAESTRO

LOL!

Please,sober up, mister.

 

[Mr Super Trader]

Quote from outsource100:

LOL!

Please,sober up, mister.

Maestro's idea is definitely outside the box. I guess maybe the squinting your eyes comment might had led you to believe he is not sober. Ha Ha!

In Maestro's defense. I have a strategy that has an edge based on Maestro's idea that I trade all the time. All I use is the 13 period sma on daily charts. In the forex market time zone that I use when a new daily bar appears. If the daily bar finishes above the top half of the bar and we are above the 13 day sma I am long. The only exception is if the bar finishes with in 15 percent of the high of the daily bar. So to clarify I am long if the bar that just finished is between 50% and 85% above the middle when the currency pair is trading above the 13 day sma. Duration of trade is either hits preset stop loss or take profit. I only do this with the proven currency pairs that I personally back tested.

Now Maestro now we have an entry how would you manage the trade?

Side note:

The reason why I don't buy if the currency pair finishes above 85% mark on the daily bar is do to the risk reward that I choose. I always trade this strat with an even R/R. Also it implies that we have had a pull back against the trend.

Unless the koolaid that i'm drinking is spiked I'm sober if not either way the way I manage the trade gives me an edge.

 

[outsource100]

Quote from Mr Super Trader:


Now Maestro now we have an entry how would you manage the trade?

.

By squinting your eyes .

 

[Mr Super Trader]

Quote from outsource100:

By squinting your eyes .

Come on now Outsource. Don't play the naysaying game. Al though I am also having a little fun. The entry is obviously only half the battle. My point being your exit strategy is far superior to your entry.

 

[cornix]

Quote from MAESTRO:

I propose the following experiment. Pick a bar chart. Any time frame, any security. Squint your eyes until you see a blurred image. Take a pencil and draw a line that is roughly following the mid points of the bars. Test a system where you “BUY” if the close of the bar is above this line and “SELL” when it is below. This is all of TA in a nutshell. I challenge everybody to verify that this as good as any other TA based trading systems. Once you verify it for yourself I will then give a fully disclosed logical reason why this approach has positive expectations and why it is relatively irrelevant how you draw your lines on the chart. I will also attempt to prove that any TA based system have roughly the same probability of succeeding. It has nothing to do with TA; it has everything to do with the imminent data distribution skews.

So, answering your original question. It is neither psychology nor any other science that makes TA work some times. It is the embedded distribution skews based patterns that anybody can capture using free hand drawn line. Even a 5 year old retard can make those lines on the chart and they will still work the same way as any other lines produced by any highly sophisticated TA!

Cheers,

MAESTRO

Does it mean any "system" like that can be used in combination with money/trade management and positive consistent profitability will be achieved, similar to successful application of TA?

 

[tobbe]

Quote from MAESTRO:

...
Even a 5 year old retard can make those lines on the chart and they will still work the same way as any other lines produced by any highly sophisticated TA!

Cheers,

MAESTRO

I think you have some subset of "lines" in mind? You don't catch setups for continuations with your thought experiment (at least not in the same TF as your chart). Isn't this just betting on RTM which may or may not work...?

 

[Sergio77]

Viva TA! Way to go...