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Technical Analysis Doesn't Work
- Thread starter rcanfiel
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Quote from marketsurfer:
ofcourse there are some.
they are black swans, the survivors, the exceptions to the rule.
JP getty had an astrologer on staff named evangeline adams and stated millionaires dont use astro, billionaires do. what does this prove???
i have no clue what marty's hit ratio was based on his indicators---no doubt a gifted trader, but thats all one can deduce. does he have other information flows among a myraid of other questions that couldn't be answered by simply sitting next to him for how ever long.
i'm surprised that you place so much credence in anecdotal evidence, yet ignore the objective facts cause they conflict with your world view. your a bright person, im baffled with your defense of the indefensable--particullarly when it comes to TA vendors, among those who have claimed perfect track records.
surf
Whatever. I give up. This is a self-fulfilling prophecy for you and the originator of this thread:
1. Technical Analysis does not work
2. Ah, but there are examples of people who CAN make it work consistently . But lest your brain gets stuck on Marty Schwartz, let me repeat: Marty is JUST ONE EXAMPLE. I know plenty of others.
3. So these people must be black swans, anomalies, using vodoo. (btw, Martys hit-rate- over 75%, for many years. This is one hell of a black swan). What is your hit-rate using "tested" criteria?
It can not POSSIBLY be that these people have trained their brains to analyse multiple data inputs in real time, REPRESENTED ON A CHART, creating a binary trade decision scenario. Why? Because:
4. MY instruments can not MEASURE their edge (even though it seems to exist)?
5. It could not possible be that my instruments are too coarse or wrongly tuned to pick up the right signal. So? Return to 1.
Repeat at nauseam. Bye.
Quote from Vienna:
Whatever. I give up. This is a self-fulfilling prophecy for you and the originator of this thread:
1. Technical Analysis does not work
3. So these people must be black swans, anomalies, using vodoo. (btw, Martys hit-rate- over 75%, for many years. This is one hell of a black swan). What is your hit-rate using "tested" criteria?
It can not POSSIBLY be that these people have trained their brains to analyse multiple data inputs in real time, REPRESENTED ON A CHART, creating a binary trade decision scenario. Why?
yes, thats entirely possible. its called subjective TA, that which i have no issues with, as i have no issues with picasso. however, this can't be taught or learned as a series of rules--- its the intuitive process at work which is a very powerful tool.
surf
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Quote from marketsurfer:
ofcourse there are some.
they are black swans, the survivors, the exceptions to the rule.
JP getty had an astrologer on staff named evangeline adams and stated millionaires dont use astro, billionaires do. what does this prove???
i have no clue what marty's hit ratio was based on his indicators---no doubt a gifted trader, but thats all one can deduce. does he have other information flows among a myraid of other questions that couldn't be answered by simply sitting next to him for how ever long.
i'm surprised that you place so much credence in anecdotal evidence, yet ignore the objective facts cause they conflict with your world view. your a bright person, im baffled with your defense of the indefensable--particullarly when it comes to TA vendors, among those who have claimed perfect track records.
surf
Surf, I find your logic very weak. I think that calling Marty Schwartz a black swan only makes sense from the perspective that, yes, it is 1 in 10000 traders that has the fortitude to overcome the initial losses associated with learning the business. He turned profitable after 10 years of trying and losing money. How many of us can handle that? I would say most of us would want to quit after 1 year, not 10. Not to mention not having the resources to keep going in the early years.
Also, would you walk up to Tiger Woods and tell him, you know, you're really not a tiger, you're just a black swan. Afterall dude, out of the hundreds of thousands of golfers worldwide, there just HAD to be one with so many trophies like you, wouldn't it? huh, huh? Have you heard of Taleb and fooled by randomness Tiger? You're just a random anomaly!
LOL. I doubt you would. Because you know that it's Tiger's immense hard work and technique that has earned him top spot, not randomness. The bottom line is that trading is like any sport, the top is reserved for a select few. So the lack of top traders is not an indictment of the methods used by traders, especially when evidence has shown that the top traders' methods are varied and unique. Rather it's an indictment of the lack of hard work, perseverance and talent in the general trading population.
For one to know without fail that Tiger's record is not a fluke, or a statistically random occurrence, all one has to do is compute the statistical significance of his repeatedly excellent performance over the last ten years and try to reject the null that his trophy winning is not significantly different from that of the average pro golfer. We know what the answer will be. Marty is no different.
Again, all it takes is one black swan to refute the hypothesis that all swans are white. Your hypothesis is that objective TA does not work is like saying all swans are white. There are not one, but many black swans that disprove it, as Vienna has pointed out. So you argue that it is 'subjective' TA that works. Well guess what, subjective TA is TA nonetheless.
Re JP Getty, really a silly argument and red herring. Listen, Roger Federer keeps a tweety bird stuffed toy in his bag for good luck. Yet, do you hear anyone attributing his success to tweety? In Marty's case, ask him or read his book, and he will tell you TA was a huge part of his success.
So fess up, some intellectual honesty would be nice from time to time coming from you.
Quote from Vienna:
Whatever. I give up. This is a self-fulfilling prophecy for you and the originator of this thread:
1. Technical Analysis does not work
2. Ah, but there are examples of people who CAN make it work consistently . But lest your brain gets stuck on Marty Schwartz, let me repeat: Marty is JUST ONE EXAMPLE. I know plenty of others.
3. So these people must be black swans, anomalies, using vodoo. (btw, Martys hit-rate- over 75%, for many years. This is one hell of a black swan). What is your hit-rate using "tested" criteria?
It can not POSSIBLY be that these people have trained their brains to analyse multiple data inputs in real time, REPRESENTED ON A CHART, creating a binary trade decision scenario. Why? Because:
4. MY instruments can not MEASURE their edge (even though it seems to exist)?
5. It could not possible be that my instruments are too coarse or wrongly tuned to pick up the right signal. So? Return to 1.
Repeat at nauseam. Bye.
There is only one problem here. When they are actually put under the microscope, TA falls on its face. Many times.
The response from TA believers is never "here is a 30 year study on this setup. It clearly shows a significant outperformance edge" The response is either a claim of 2-3 months "well, it works for me", or the constant appeal to Brand X guru , who "makes it work".
Of course, it is never demonstrated that the reason for the outperformance is ONLY due to TA. Little attempt is made to eliminate the portions of profitability possibly due to: Money management, portfolio management, interest, trade management, luck in leveraging a rising market, fees from running hedge funds/speaking fees/running an advisory, outright lying about the profitability, the fact that out of a thousand major investors - a few of them wind up on top due to sheer probability even over many years, etc. etc. THIS IS CALLED CONTROLLING FOR OTHER EFFECTS AND IS REQUIRED TO BE STATISTICALLY VALID. Testimonials and Anecdotal appeals have ZERO value.
I agree if you are saying a person cannot use only a hammer to build a house and that there is a minimum level of skill needed to properly use a hammer. If instead you mean a hammer cannot be used to build a house, that is a conclusion I do not understand.Quote from rcanfiel:
There is only one problem here. When they are actually put under the microscope, TA falls on its face. Many times.
The response from TA believers is never "here is a 30 year study on this setup. It clearly shows a significant outperformance edge" The response is either a claim of 2-3 months "well, it works for me", or the constant appeal to Brand X guru , who "makes it work".
Of course, it is never demonstrated that the reason for the outperformance is ONLY due to TA. Little attempt is made to eliminate the portions of profitability possibly due to: Money management, portfolio management, interest, trade management, luck in leveraging a rising market, fees from running hedge funds/speaking fees/running an advisory, outright lying about the profitability, the fact that out of a thousand major investors - a few of them wind up on top due to sheer probability even over many years, etc. etc. THIS IS CALLED CONTROLLING FOR OTHER EFFECTS AND IS REQUIRED TO BE STATISTICALLY VALID. Testimonials and Anecdotal appeals have ZERO value.
Your crusade is a bit ridiculous,to say the least.
Dan Zanger has done exceedingly well using pure T.A.
You will find 100 reasons to the contrary,but he is the hugely successful trader..not you
Do successful traders really give a shit if their wealth is derived from soley T.A.,or from an art based predominantly on T.A..
What would you call a trader who scans the stock universe for high relative strength/reasonable P/S ratios and growing earnings,but only buys on retracements and/or technical patterns??Does the fact that he employs strict money management and ATR stops below key pivots render T.A. meaningless???
No offense,but you border on the absurd and are clearly on a crusade.What percent of ALL traders regardless of style are profitable??And how many of those are super profitable??
Of course T.A doesnt work for the majority...Most traders lose money,T.A. or not.So,in your eyes NOTHING works...
But do not be so completely naive to think that there are not some exceedingly successful people trading "pure technical analysis"....
Once again,just because you have fell flat on your face,does not mean everyone has take a nosedive...You cant be that dumb...Can you??
Dan Zanger has done exceedingly well using pure T.A.
You will find 100 reasons to the contrary,but he is the hugely successful trader..not you
Do successful traders really give a shit if their wealth is derived from soley T.A.,or from an art based predominantly on T.A..
What would you call a trader who scans the stock universe for high relative strength/reasonable P/S ratios and growing earnings,but only buys on retracements and/or technical patterns??Does the fact that he employs strict money management and ATR stops below key pivots render T.A. meaningless???
No offense,but you border on the absurd and are clearly on a crusade.What percent of ALL traders regardless of style are profitable??And how many of those are super profitable??
Of course T.A doesnt work for the majority...Most traders lose money,T.A. or not.So,in your eyes NOTHING works...
But do not be so completely naive to think that there are not some exceedingly successful people trading "pure technical analysis"....
Once again,just because you have fell flat on your face,does not mean everyone has take a nosedive...You cant be that dumb...Can you??
Quote from rcanfiel:
There is only one problem here. When they are actually put under the microscope, TA falls on its face. Many times.
The response from TA believers is never "here is a 30 year study on this setup. It clearly shows a significant outperformance edge" The response is either a claim of 2-3 months "well, it works for me", or the constant appeal to Brand X guru , who "makes it work".
Of course, it is never demonstrated that the reason for the outperformance is ONLY due to TA. Little attempt is made to eliminate the portions of profitability possibly due to: Money management, portfolio management, interest, trade management, luck in leveraging a rising market, fees from running hedge funds/speaking fees/running an advisory, outright lying about the profitability, the fact that out of a thousand major investors - a few of them wind up on top due to sheer probability even over many years, etc. etc. THIS IS CALLED CONTROLLING FOR OTHER EFFECTS AND IS REQUIRED TO BE STATISTICALLY VALID. Testimonials and Anecdotal appeals have ZERO value.
Let us not forget that rcanfiel has previously announced that he will likely be selling a service of some kind or other in due course. Trading-related, naturally. Perhaps this thread is a build-up and a lead-in to the grand moment. I just can't wait. Can you?
Quote from taowave:
Your crusade is a bit ridiculous,to say the least. Dan Zanger has done exceedingly well using pure T.A.
You will find 100 reasons to the contrary,but he is the hugely successful trader..not you
As a quote from wikipedia from the efficient market hypothesis says "Presentation of anecdotal evidence of star-performers to cast doubt is rife with survivorship bias."
And that does not even adjust for the fact that (as I said) from a large universe of traders, some will rise to the top by sheer probability.
In other words, picking out a star is proof of nothing.
Do successful traders really give a shit if their wealth is derived from soley T.A.,or from an art based predominantly on T.A.. What would you call a trader who scans the stock universe for high relative strength/reasonable P/S ratios and growing earnings,but only buys on retracements and/or technical patterns??Does the fact that he employs strict money management and ATR stops below key pivots render T.A. meaningless???
(A.) What I said is quite correct. People give examples of top traders as examples (Paul Tudor Jones, Soros, etc.). The point is obviously that if TA believers hold these people up as examples, and don't adjust for all the points I mentioned (and likely more), then it is no proof that TA works.
So,in your eyes NOTHING works...
That is your statement, not mine.
But do not be so completely naive to think that there are not some exceedingly successful people trading "pure technical analysis"....
Repeat of above (A.)
Once again,just because you have fell flat on your face
"Have fell"? Ouch!!! But, putting words in my mouth or making assumptions of my own trading is tangential to your making a valid point.
..You cant be that dumb...Can you??
In the measure of "that dumb", I pale in your shadow.
Quote from rcanfiel:
Ok mr wikipedia wielding rcanfiel, let me ask you a question:
Would you walk up to Tiger Woods or Roger Federer and tell them that their track record proves nothing about their technique and hard work and that there are merely random/lucky statistical outliers among the very large population of golfers and tennis pros?
The question also is posed to Marketsurfer and anyone else taking his stance, btw
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