Technical Analysis Doesn't Work

[rcanfiel]

Quote from maxpi:

Rcan went straight to ignore a while back.. he seemed like bullshit to me and now people figured him out.. too cool.

This site does not take customers, never has (try to subscribe on C2, where it was pulled it). It was $90 to test out various commodity strategies that looked interesting. It has never been traded by myself or anyone else. Regardless, it is still up a few percent.

Will I offer a service? Probably soon. But when I see your monitored track record I will consider you as having something to say.

 

[Vienna]

Quote from taowave:

Let me see if I have this straight..

"We" are engaged in a 122 page debate on technical analaysis working or not with some shmuck who has a CAR of 2% and a Sharpe of -.154??


Thread closed

Agree completely. The important points are:
1. Can the poster trade? I am by now completely sure that neither Marketsurfer (= Dave Goodboy) nor Rcanfiel can (and I still dont know if they aren't one person). Both records are pretty clear, let's be honest about that... one has abysmal statistics posted on his own website and the other has the hit-rate below flipping coins and no money managment or actual profit record. On the other hand, if you do the work, you will find that the people the 2 posters constantly attack actually can trade and are a much better read... Spyder is just one example.
2. If these guys can not trade, perhaps they still have something important to teach ? (Van Tharp can't trade either- me thinks- but some of his concepts are valuable). But I have never read anything from either of these 2 characters that has improved my trading or my understanding of the market. Not one single shred.
3. So why bother reading them? At one point I thought Marketsurfer was actually somewhat likeable while not knowing much about trading. But, time and again, the posts show different: silly attacks on people that are clearly intellectually superior, constant turning, tap-dancing and spinning of any issue, a pseudo- important New York financial world fictional persona ("my Fifth Avenue Offices") combined with obnoxious snobbism...etc. ... the latest straw for me was the naive sucking up to that Cuban slimeball in his own thread.
4. Logical conclusion: the only reason to read them is obviously for entertainment when bored. Dismantling them- while easy- achieves absolutely nothing, since they just slip away sideways and pop up again. You can not insult someone like that, because if you tell them that they are full of s##t, you tell them nothing new.

 

[alex.samant]

MY DEAR RCANFIEL....


Your original OP is based on a flawed concept.

TA is NOT MEANT to have predictive value.
It is merely a study of price....

This goes to show how 95% of the people out there lose because they do not have common sense.

Nothing in this world has predictive value, when you are dealing with masses of people...

What TA does is display information about price action, depending on what you are interested in... You want SR levels, TA provides them, you want volatility studies, TA provides them, you want momentum studies, TA provides them, you want trend studies, TA provides them...

Ultimately, it's the human brain that makes the prediction... BUT that is flawed.....

You need to turn to your study method and see if historically, there is a repetitive pattern that TA identifies it well...

AND THEN... act.

The same can be done with fundamental analysis...The difference however is that FA is more suited to long term investors...

With this being said... I hope that the ones of you who have brains will understand why this thread is abstract.
It demands the impossible from a mere study method.

And that is the claim of all losers. Knowing the future...

 

[rcanfiel]

Quote from alex.samant:


Your original OP is based on a flawed concept. TA is NOT MEANT to have predictive value.

Funny, that is not what its followers say.

This goes to show how 95% of the people out there lose because they do not have common sense. Nothing in this world has predictive value, when you are dealing with masses of people...

You have asserted this, you have not proven it.

What TA does is display information about price action, depending on what you are interested in... You want SR levels, TA provides them, you want volatility studies, TA provides them, you want momentum studies, TA provides them, you want trend studies, TA provides them...

Nobody wants these things as a hobby. They study them to try and make/preserve money while trading.

Ultimately, it's the human brain that makes the prediction... BUT that is flawed.....

You need to turn to your study method and see if historically, there is a repetitive pattern that TA identifies it well...

Studies show that the TA people use has no value.

AND THEN... act. With this being said... I hope that the ones of you who have brains will understand why this thread is abstract.

You have this backwards. Studies are hard, cold tests of a principle. TA generally fails. The "abstract" are the people who deny the results of many studies, and cling to beliefs and try to pick away at these study results. Who has more credibility, someone who tests an indicator over 30 years using numerous different values, or someone on ET who claims they make 50% a month but offers no hard proof?

Such people could demonstrate some evidence for TA methods. But when asked for strong evidence, or given the ability to demonstrate via using independent monitoring or perhaps posting a significant number of trades here ahead of time, they run away and hide.

It demands the impossible from a mere study method.

An assertion without proof. Studies are very strong tests of principles, and they show TA generally lacking.

And that is the claim of all losers. Knowing the future...

People like to say "you cannot predict the market's future". But then, that is exactly what trying to find a trading method really does, isn't it? Trying to put on a trade in the direction one feels their "edge finders" indicate? They just try to give it a name besides "predict."

 

[marketsurfer]

Quote from alex.samant:

MY DEAR RCANFIEL....


Your original OP is based on a flawed concept.

TA is NOT MEANT to have predictive value.
It is merely a study of price....

Ultimately, it's the human brain that makes the prediction... BUT that is flawed.....

You need to turn to your study method and see if historically, there is a repetitive pattern that TA identifies it well...

AND THEN... act.



And that is the claim of all losers. Knowing the future...

this post is self contradictory, although it "seems" to make sense.

if there are repeatable patterns, obviously you are predicting when "acting" on it prior to it repeating which is needed or you would not be entering the position in the first place.

this linquistic spin is de riquor for TA enthusiasts---as well as the personal attacks as evidenced in Viena's post--- i post a chat i had with one of the greatest short sellers of all time, and Vienna makes those kind of comments?? Plus making statements about things he knows absolutely nothing about, really really poor form and typical of "true believer" types.

surf

 

[alex.samant]

Maaan.... No wonder TA does not work for you Rcanfiel... and also marketsurfer...

Rcanfiel: Drop the academical talk. I am making "assertions" but i don't need to prove them.

Actually the assertion thing is rather "dorky".

How am i supposed to prove to you something that i have gathered over the years and has become a belief?

Do you think that just for your sake and all the "haters" sake, someone in their right mind would prove all their assertions or show you their track records? Do you think anyone who is successful wants to prove anything by showing track records? To whom? To posters who only disregard anything that is not theirs?

Marketsurfer: I don't have anything backwards as you don't have anything forwards.... So spare me! Technical Analysis refers to custom studies of price action. They study price action or volume in order to provide information about the market. Be it support/resistance, volume, momentum, trend and whatnot. However, these are studies and they cannot predict anything.

They can only identify certain patterns based on what you are looking for. They do not guarantee that those patterns will work automatically just because they are there.

If you know that from a statistical point of view those patterns have a certain probability of working consistently then you act on your own free will.

You do not rely on prediction, but on probability.

5000 posts and you can't make the difference... Boy... Go hit the books...

 

[marketsurfer]

Quote from alex.samant:

Be it support/resistance, volume, momentum, trend and whatnot. However, these are studies and they cannot predict anything.

They can only identify certain patterns based on what you are looking for. They do not guarantee that those patterns will work automatically just because they are there.

If you know that from a statistical point of view those patterns have a certain probability of working consistently then you act on your own free will.

You do not rely on prediction, but on probability.

5000 posts and you can't make the difference... Boy... Go hit the books...

With all due respect, your understanding of probability is not correct. if you we were actually dealing with probability of certain patterns repeating, this could be easily modeled and determined as to an exact number. however, despite 10000's of claims and attempts, it has never been done and can't be done due to the subjective and nebulous nature of TA.

what you are saying sounds good, however, its application in reality is far different.

as a basic example, what is the probability of a head and shoulder pattern being a top prior to it forming completely? after its formed-- its 100% in a certain time frame, but by then its too late. i could go on and on and on....
surf

surf

 

[Paulds11]

alex.samant

Very well put alex, spot on.

Its shocking how anyone could possibly deny the use of Technical analysis when every Investment Bank and the majority of short term traders overwhelmingly use it day in and out to make money in the markets.

Its good to debate but this argument is a wast of time. If anyone finds it difficult to accept then that is an issue for them.. ultimately I even doubt that those who argue against are even currently taking positions in the market such is the stupidity of thier claims and assertions...
those words are not the words of a well rounded or even successful trader..no way at all..

 

[alex.samant]

HOW IN THE WORLD CAN CROWD BEHAVIOUR BE EASILY MODELED !?!?!??!

HOW !?!?!?

TELLL MEEEE !!!!!

JUST BECAUSE YOU DON'T KNOW TA, IT DOES NOT MAKE IT USELESS..... DID YOU EVER THINK ABOUT THAT !?!??!

HOW DO YOU KNOW THERE ARE NO STUDIES OUT THERE THAT SHOW THE RELEVANCE OF TA????? WHO ARE YOU??? GOD !?!?!!!?!? !

BWAAAAA

 

[marketsurfer]

Quote from Paulds11:

alex.samant

Very well put alex, spot on.

Its shocking how anyone could possibly deny the use of Technical analysis when every Investment Bank and the majority of short term traders overwhelmingly use it day in and out to make money in the markets.

Its good to debate but this argument is a wast of time. If anyone finds it difficult to accept then that is an issue for them.. ultimately I even doubt that those who argue against are even currently taking positions in the market such is the stupidity of thier claims and assertions...
those words are not the words of a well rounded or even successful trader..no way at all..

name one investment bank that uses TA,as a primary method of trading---- outside of its marketing department, ofcourse

the "majority" of short term traders use it, you do know the "majority" of short term traders lose, right??

why do NO prop firms teach TA a primary method for their traders?? cause it provides no edge in the here and now.

good luck!

surf