Technical Analysis Doesn't Work

[Dackster]

rcanfiel.

What can you prove? What can anyone prove about the markets?

Very little.

Good luck with your thread, and good day.

 

[marketsurfer]

surely multiple tests performed over multiple years and time frames resulting in negative or dubious results should tell one something. are there ta picassos who thru intution or other non quantifiable skills able to discern and make it work? probably... however if your not one of these savants.... better look elsewhere for an edge.

surf

 

[whitster]

"The consideration of Price action, free of all indicators or other philosophies mentioned above, is not included in the definition for purposes of this thread"

well, ok. but technically speaking, you are just railing against the efficacy of certain kinds of technical analysis

ALL studies of price action are technical analysis.

and that includes the purest form - just watching the tape.

not to get all semantical, but that's what technical analysis is

personally (on an intraday time frame) i do not look at a single lagging indicator.

i consider price.

i use market profile, market breadth, intermarket analysis, key reference areas, tape, etc. to make my decisions

ALL of these *are* technical analysis. none of these are lagging indicators.

also, every guy who is trading order flow in the pit is relying on TA, just not the conventional retail trader's lagging indicators.

every market maker that guns for retail traders stops and tries to fake out retail is also using technical analysis.

if you are not relying on fundies (which i use extensively for investing and less so for swing, but obviously not for intraday futures), then it's TA

TA is the study of price qua price.

but i agree that most traders will lose trying to use squiggly lines to make their trade decisions

the first thing i do with new trainees is get them to clear all the stochastic/macd/rsi stuff of their charts and start looking at price, breadth, and what the institutions are doing

 

[kut2k2]

Quote from marketsurfer:

surely multiple tests performed over multiple years and time frames resulting in negative or dubious results should tell one something. are there ta picassos who thru intution or other non quantifiable skills able to discern and make it work? probably... however if your not one of these savants.... better look elsewhere for an edge.

surf

Hi again, marketsurfer

So if I read you correctly, what you're really saying is that while there may be some value in what Jack Schwager called discretionary trading (based on what David Aronson calls Subjective Technical Analysis (STA)), there is no value in what Schwager called mechanical trading (based on what Aronson calls Objective Technical Analysis (OTA)).

In other words, STA can't be scientifically tested, and OTA can't pass the scientific tests, as far as you're concerned. The problem is that you've jumped to a conclusion that isn't supported by the evidence. Aronson tested a large but still limited subset of OTA-based trading systems. It's premature to claim total failure before all of the evidence is in. JMO.

 

[kiwi_trader]

Quote from rcanfiel:

I have contempt for a knothead who goes off into a rage that need to try and scrape out every long word he could think of to try and impress. It rather showed your stupidity in spades...

Regarding my appendix, I was afraid you wouldn't grasp it, so thus the simpler form in parentheses. Since my master's thesis was based in linguistics, I know it was quite well-formed. Your response is akin to a child sticking out its tongue.

You portray yourself as reasonable, but you are little better than the other ET netizens...

I won't enumerate my degrees.

But I agree that it doesn't need many words to describe you - one's enough "for those who exhibit both ignorance and arrogance." Wanker.

 

[Renegen]

45 pages in 5 days... I'm not reading this.

 

[ProfLogic]

Quote from Flash2007:

You sound very intelligent. I am a believer in Technical Analysis. I have seen its application make traders TONS of money.

For me TA gives me tendencies, high probability opportunities. That is all I can hope for, situations where the odds are shifted into my favor. And those tendencies professional traders have been profitably exploiting for a long time.

I'm not a smart as most, but I equate it to Football. The masterful coaches, the Bellicheks, the Parcells, the Dungys, they are masters of tendencies and probabilities. And they react accordingly to their opponent.

Bellichek is the guru of measuring tendencies of the opponent's offense, and taking away their bread and butter. He puts his players in positions to be successful on the field better than anyone in the game, in my opinion.

Parcells is the ultimate field position and possession manager, basing his decision making on years of historical data and probabilities of success based on time of possession, field position, and turnovers. Dungy, and all his disciples, brought back the Cover 2 defense into prominence and brought a Championship to Indy by making the Defense better and toning down the offense.

I got off the topic a bit, training camp is around the corner and this year I'm ready with the NFL Network.

My point, the goal is to make money in trading. Whatever works for you works for you. Hopefully whatever it is it gives you the advantage necessary to make money consistently.

For me Technical Analysis is the way for me. It has worked for me dabbling in personal investments and I intend to have it work as I enter full-time trading.

I will not criticize anyone else's system. As long as it works, go for it. That's like trying to convince you that my religion is better than yours. Whatever works, I'm open to discussion and new ideas.

Nice post. I use tons of analogies in my teachings so I can relate.
I agree as well that criticizing others methods without first hand knowledge of precisely how it works is silly. If it works for one it might not work for another . . . who cares. Again nice post.

I can't wait for the season to start as well. I go through withdrawal in the off season.

 

[ProfLogic]

Quote from marketsurfer:

surely multiple tests performed over multiple years and time frames resulting in negative or dubious results should tell one something. are there ta picassos who thru intution or other non quantifiable skills able to discern and make it work? probably... however if your not one of these savants.... better look elsewhere for an edge.

surf

Do you plan on answering my questions based on your accusations?

 

[ProfLogic]

Quote from kiwi_trader:

I won't enumerate my degrees.

But I agree that it doesn't need many words to describe you - one's enough "for those who exhibit both ignorance and arrogance." Wanker.

 

[Thunderdog]

Quote from kiwi_trader:

...I agree that it doesn't need many words to describe you - one's enough "for those who exhibit both ignorance and arrogance." Wanker.

Careful kiwi. I think rcanfiel has a Pez dispenser loaded with $2 words. If you keep it up he's liable to compose a diatribe against you, too. But try not to take it personally since he doesn't make it a habit of actually reading the posts that he quotes and responds to.

(Oops, sorry. Being the master of linguini that he is, rcanfiel will insist that I should have written "...and to which he responds." As an aside, do you think he recognized the grammatical error in the post wherein he boasts about his academic credentials? Actually, I'm sure it was quite intentional and for the general amusement of those of us who regard irony as a form of High Art. He's such a thoughtful lad, our rcanfiel. Aside from being an asshole and a wanker, of course.)