Technical Analysis Doesn't Work

[marketsurfer]

Quote from Thunderdog:

Damn it! Why do I bother? I wrote my post on page 64 in order that it would be addressed and debated by the detractors of TA, not in order for it to be ignored by them. Why has not a single detractor responded? Is my rationale so trifling as to be beneath them? Indeed, why do I bother?

http://www.elitetrader.com/vb/showthread.php?s=&postid=1558816#post1558816 [/QUOTE


i'll debate you tdog. unfortunately.the surf is volatile right now and I need to concentrate. be back later....

 

[Thunderdog]

OK, but I don't see your journal postings. Have your trades gone black ops?

 

[rcanfiel]

Quote from Paulds11:

rcanfiel, If I may be so kind as to ask you read the post again you may extract the information you need. Rather your repost is full of Hyperbolee and refuses to acknowledge an absolute fundamental truth so self evident no example is required.

Time and time again, when one observes and draws lines of support and resistance (which are Technical indicators) one sees clearly that breach of either by price action in a statisticaly significant sample set often results in a projected CONTINUANCE of price action?.. why is that? because so many traders use that as a marker, a signal for a break in the market psycology. To deny this fundamnetal fact used on Bloomberg, CNBC, CNN, ALL investment banks in the city using technicals (and I dont know any that do not), is to be shielded from your environment.

I think you are making a fundamental mistake by being so dogmatic about this it is clouding sensible judgement. The truth is markets break and rise on technicals (Oil breaking $70 dollars threshold, dollar@pound breaking 0.5) AND Fundamentals (subprime issues now spreading to banks.. part sentimental actually).

You will begin to look less than competant if you cannot see this basic fact. However not all technicals are the same of course..... I could say more but Ill keep this clean and respect your "current" viewpoint.

If you would look back, you would find that the study I posted found no value in S/R levels. You can defend it, but all you will be using is anecdotal evidence.

In the word of science and statistics, that is irrelevant. It is a belief, regardless of how many believe it.

 

[rcanfiel]

Quote from ljyoung:

It took me overnight and most of the morning to digest your collection of pedantic thoughts and simplistic ad hominems.

To the best of my knowledge, papers which are submitted to journals for consideration of publication typically are sent to a panel of reviewers, most often three "outside" individuals, but sometimes two and the journal editor. The majority decision is then communicated to the author.

I am working on my grasp with one of those little squeezy thingys.

The fact that the authors made very clear what the purpose and findings were, does not have anything to do with the credibility of what they had to say.

Yes I do.

lj

I don't see anything useful here. Publications are done via a thorough process. A lot more dependably than forum vents and beliefs.

 

[rcanfiel]

Quote from Paulds11:

Spike 500

Colourfull indeed.... but absolutely the voice of reason.. how anyone else can possibly think otherwise is living in a fantasy world... The Markets are driven by people pure and simple and technicals always ultimately are interpretations of that point..... Those that deny or refute this are to me akin to claiming the earth is still flat whilst ignoring the issues of gravity and proof we have in orbits climate and satellite behavior..simply astonishing denial if you ask me.. theres no reasoning with that.. though we do remain open to any coherent argument to attempt to explain otherwise of course... but I hear see or smell no factual rebuttall of substance.. only Hyperbole...

Well said spike500

The hyperbole is that you have a belief in something that you claim must be true, but you offer no evidence. Serious studies show the nonvalue, and you hold them up as flat earthers?

You have it quite backwards. Flat earthers believe, and science/math/statistics are based on testing and evidence.

 

[ljyoung]

So tell me, rc, do you believe that everything that is published is correct? Hmmm?

lj

 

[marketsurfer]

Quote from Thunderdog:

Presumably, you understand that a complete trading method involves a combination of rules calibrated to work with one another as a unified whole. It does not involve just slapping together whatever happens to be in the refrigerator at the moment. Presumably, you understand that arriving at a usable system involves testing, tweaking, testing some more and then more adjustment until you arrive at something that is not overfitted and works on balance. As you might imagine, the effort is nuanced and is not measured solely by its quantity. (On the other hand, the production of academic papers is often fueled by the "publish or perish" rule. This is not to suggest that meaningful academic research is not performed, because that would be a foolish statement. However, sadly, there is no lack of academic "scholars" principally motivated by quantity of output, since research grants and other forms of compensation are often dictated by quantity of output.)

Are we to assume that the authors of the study you referenced took the kind of time and care it takes to develop a usable system, to arrive at their collection of 7,846 quantitative trading rules? That it involved a careful collection of criteria that were preceded by careful market study over an extended period of time? By way of example, to be able to prepare a gourmet meal requires more than just a list of its essential ingredients. It is a matter of how and when the ingredients are used that makes the difference. Merely pouring some, all, or even more of the essential ingredients in a vat and then stirring, will likely yield different results than those desired.

the waves have settled at the surfshack, and we are LONG the DJIA presently going into friday.

due to a special request, i shall address the points put forth in the above missive. in addition to a very clear bias against any type of academic, it contains the logical error of assuming that adding more varibles to a solution will result in clearer/better results--kinda the baffle them with BS approach to defending TA. This part doesnt work, but when mixed with this, it does work, type of thinking. It also harbors secret type undertones--- "one needs to know the secret on how to stir the vat" etc. Im sorry but i fail to understand your point other than more complex TA with the right "chef" works??

surf

 

[NihabaAshi]

Quote from marketsurfer:

...it contains the logical error of assuming that adding more varibles to a solution will result in clearer/better results--kinda the baffle them with BS approach to defending TA. This part doesnt work, but when mixed with this, it does work, type of thinking. It also harbors secret type undertones--- "one needs to know the secret on how to stir the vat" etc. Im sorry but i fail to understand your point other than more complex TA with the right "chef" works??

surf

You yourself said in this thread and else where at ET that TA combined with other things that's TA related may have value (review your commentary about intermarket analysis).

Also, where does it say its complex.

What's complex to me may be simple to you and what's complex to you may be simple to me that's often determine by market experience (there's those two words again).

The only thing complex may be trying to find the right data vendor that offers different types of key markets as a package deal at a reasonable price.

My point, just because someone doesn't want to use that junk that you guys keep testing or that every body knows doesn't work as a simple code out of the box...

Does not imply that other forms of TA is complex.

In fact, I truly believe other forms of TA is much easier to interpret than that stuff you guys are running around pointing an angry finger at along with seeming confused why profitable traders aren't showing proof it works.



Have you thought that its possible profitable traders don't use that canned junk and that they use another form of TA.

Of course you have thought about it and that's why you guys excluded them from this discussion.

Heck, I still can't figure out what some of those indicators mean (sarcasm).



Mark

 

[kiwi_trader]

Surf and canfield are just can't do wankers stirring the pot Mark.

Ignore them or just check in for a laugh from time to time. Funny as ... I just wish they were putting some money down to grease the markets' wheels.

 

[NihabaAshi]

Quote from kiwi_trader:

Surf and canfield are just can't do wankers stirring the pot Mark.

Ignore them or just check in for a laugh from time to time. Funny as ... I just wish they were putting some money down to grease the markets' wheels.

Actually, some of the stuff they said I do agree with.

However, the theme of the thread that's created via the generalistic statement is problematic (inaccurate) when in reality their opinions and facts deals with stuff profitable traders aren't using.

Yet, I do enjoy seeing them contradict themselves on a few occasions which is common for someone view the market from inside of a box.

I'm still having fun with the exclusion tactics and LUCKY statements in an effort to support their research.



Regardless, another profitable day via TA and not via the stuff they have a problem with.

Mark