TA - Objective or Psychological Skill?

[wrbtrader]

Quote from cornix:

...I prefer to progress gradually. So far there are only 15 or so trades, so it's not even worth attention. When there will be significant sample size, I will think about the next step. So far it stays as it is.

You have already establish in the other thread that there will NOT be any objective TA discussion nor will there be any general TA detail discussion in that thread about the simple TA method you're using for day trading to correlate to your real money performance record.

Thus, I do understand it will stay that way as is along with the moderator (Magna) ensuring the other thread is only about your performance record.

You also implied in that other thread that this thread is your "next step" but so far this thread is about arguing the merits of TA along with a few hypothetical swing trades and that your "clients" can verify you're using objective TA.

Yeah, I do now get it that you will stay on this course.

 

[cornix]

No, I didn't mean to say other people can confirm what exactly I use to trade. Rather that blotters et cetera are not fake.

As for what to discuss or not, please let me decide what and how to discuss. If you ever wish to start such a discussion of your own methods yourself I will gladly participate.

 

[wrbtrader]

Quote from cornix:

No, I didn't mean to say other people can confirm what exactly I use to trade. Rather that blotters et cetera are not fake.

As for what to discuss or not, please let me decide what and how to discuss. If you ever wish to start such a discussion of your own methods yourself I will gladly participate.

You already know my own discussion after I saw you mention something to someone else in another thread amongst these TA debates. If you've suddenly forgotten your own statement elsewhere in that thread...pm me with a request and I will remind you of those discussions so that you can gladly participate.

Regardless, thanks for the clarification about what you meant to say about that your "clients" (you didn't use the word others) can verify that your blotters are not fake.

P.S. I use TA but I its not the only thing I use (e.g. news, fundamentals, global economic events, position size management et cetera)

 

[cornix]

Quote from wrbtrader:

You already know my own discussion after I saw you mention something to someone else in another thread amongst these TA debates. If you've suddenly forgotten your own statement elsewhere in that thread...pm me with a request and I will remind you of those discussions so that you can gladly participate.

Regardless, thanks for the clarification about what you meant to say about that your "clients" (you didn't use the word others) can verify that your blotters are not fake.

Yes, I remember that thread, great one. Learnt a lot from it. Unfortunately it's not much active lately.

 

[dom993]

I did extract from Wikipedia a few sentences that summarize best what TA is - to me:

"In finance, technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.

Technical analysis stands in contrast to the fundamental analysis approach to security and stock analysis. Technical analysis analyzes price, volume and other market information, whereas fundamental analysis looks at the facts of the company, market, currency or commodity.

A key principle of technical analysis is that a market's price reflects all relevant information, so their analysis looks at the history of a security's trading pattern rather than external drivers such as economic, fundamental and news events. Therefore, price action tends to repeat itself due to investors collectively tending toward patterned behavior.

There are many techniques in technical analysis. Adherents of different techniques (for example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one technique. Some technical analysts use subjective judgment to decide which pattern(s) a particular instrument reflects at a given time and what the interpretation of that pattern should be. Others employ a strictly mechanical or systematic approach to pattern identification and interpretation."

Anyone claiming TA "doesn't work" actually claims there are no statistically repeating price/volume patterns which can be traded for a long-term profit.

So, on the anti-TA front, we find people who claim there exist only repeatable situations involving factors outside of market-generated data, leading to trading opportunities with no repeated footprints in the market-generated data ... in essence, repeated input situations generating random price-action but with the ability for those anti-TA people to figure how to actually trade each of these situations (with a random price-action outcome) for a profit ... who's delusional, really?

 

[marketsurfer]

Quote from wrbtrader:



With that said, as stated before about the mechanics of your mentioned other thread (performance record), it will be impossible for you to prove that TA works in comparison to other journals here at ET where members do explain basic TA details about their methods without revealing the specific details. Thus, you will only prove if you're a profitable trader because there's no explanation of the "simple TA" you're using in that thread nor anywhere else although I believe you had the intentions of using this thread for such proof but that too is now impossible based upon its length of not doing such.

Do you plan on starting another thread for the sole purpose of discussing your simple TA methods that correlate with the performance record mentioned at the above thread.

If not, the agenda of this entire discussion will soon become suspicious.

Are not the majority of trades on Corns TA proof thread losers?

 

[wrbtrader]

Quote from dom993:

...Anyone claiming TA "doesn't work" actually claims there are no statistically repeating price/volume patterns which can be traded for a long-term profit...

Unless I missed the commentary, I have not seen surf and gang say there's NO repeating price/volume patterns. In contrast, I do see them saying these patterns can not be exploited profitably all by themselves (without any other trading tools) for long-term profits.

That's really what these debates are about because of the semantics of using words like "only", "use nothing else", "all by itself", "objective", "subjective" by discretionary traders.

 

[MAESTRO]

Quote from phattails:

Maestro,

I have a more general question: Do you believe that there is any exploitable information in historical price/volume time series (including multivariate)? If not why?

Thanks,
PT

Of course there is! However, to answer your question properly I would need to resort to an analogy. I hope that you would understand this analogy not as a mocking statement, but as a true attempt to illustrate my point of view.

Imagine that you are watching the arguing of a man with a woman in a hotel room through a hidden camera and a microphone. If you observe their behavior, listening to every word they are saying, noticing their facial expressions etc., after a while you would have pretty good understanding of what is going on between them. Using your own experience and your prior knowledge about the relationships in general you could then pretty accurately anticipate what might happen next in the room and what actions each of this quarrel participants will most likely to take in the future.

Now, imagine that you are trying to do the same thing but this time around by just peeking through a key hole. All you see now is some shadows moving in the room, some separate words, a brief glimpses of people etc. In this case your understanding of the situation will have much less accuracy and, therefore, your anticipation of what might happen in the future between the two arguing people could be extremely wrong.

So, my point is that the whole premise of TA is the observation of the price/volume behavior over time. It is just like peeking through a key hole – it is NOT ENOUGH! There is a huge set of other information streams that are available, but ignored by TA thus rendering it as a very limited, rigid and extremely unreliable source of the decision making information.

 

[MAESTRO]

Quote from toolazy:

I fail to see how short term trading is anything but TA.

Alternative is to generate signals based on news, like data xxx is strong therefore buy, which is not working.

So anything that cornix shows is TA. What else can possibly be ?

That is the eternal question, isn’t it? Well, I have the answer to it. Read my thread called "Intuition Amplifier2" in the psychology forum. You should be able to understand it.

 

[cornix]

Quote from marketsurfer:

Are not the majority of trades on Corns TA proof thread losers?

Majority of trades, maybe. But as Soros said:

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."