Technical Analysis Doesn't Work

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Quote from rcanfiel:

Since thunderpooch has decided to perform a clipping service to make people look bad, we'll return the favor:

Numerous Quotes from Thunderdog:

Excuse me? Do you think I am looking to learn here?

Forgive me, and kindly permit me this observation: you have come across as entirely oblivious to the salient issues of the exchange you are referring to. Coupled with your dismissive arrogance, you present yourself as an asshole.

Do I come across as though I know everything? Hardly. I'm the first to admit when I'm wrong. However, I have contempt for those who exhibit both ignorance and arrogance. It is you who claims to know everything with your blanket pronouncements, not I. And as for your nonsensical diatribe that followed, it only confirms my initial assessment of you: asshole.

… 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

... Aside from being an asshole and a wanker, of course.)

I propose that we merely modify the thread title. Rather than the current and controversial "Technical Analysis Doesn't Work," let us consider the much more valid and specific "Technical Analysis Doesn't Work for rcanfiel and marketsurfer." … And if there are others here who agree with the views shared by rcanfiel and marketsurfer, why, I'm quite sure that we can all agree to add "et al" to the modified thread title and accommodate them as well. And there you have it - problem solved. It's all just a matter of phrasing, really. Refreshments, anyone?

Oh, how the "masses," those great unwashed, do not fall prone at the feet of your vast intellect. Forgive them, for they know not their folly. (And imagine! He has a master's degree!) How you manage to remain composed while suffering the indignity of not getting the recognition that you so rightfully deserve is truly an exercise in character building and beyond my limited comprehension. Oh, the humanity.

...an attention-seeking, bloated-ego asshole. And who are we to deny him the attention candy that he craves?

...?

Just curious. Do you actually read what you post, or is it more of an "intuitive, gut feel" kind of thing?

Really? Why? because he's intellectually dishonest, or because he intentionally obfuscates?

ET is littered with his weasel droppings.

You're quite the performance artist.

Really? There is no implication here? Such as your many references to JWH's recent drawdowns in another thread with JWH's name in the title and you as its author? To which your earlier post most assuredly alluded? You are such a pompous, disingenuous and obfuscating jackass that I cannot imagine why anyone wastes time in any exchanges with you. Welcome to ignore, marketsurfer. Enjoy your stay.

Um...your ill-chosen reference to JWH's performance? At least read your own posts.

Oh, are we talking about performance again? Then let's discuss yours.

Once the market moves, it's too late? So now you know both my entry points and my time frame of reference? Divine intervention? How can you be so sweeping in your comments? You have absolutely no idea where I look to either enter or exit, and yet you speak for yourself, me and everyone else here. Is this an attention thing again? Forgive me, but your performance does not suggest the kind of credentials required to make such grand statements. However, I do detect an indeterminate weight on your shoulder. A chip, perhaps?

Let me be clear: I intensely dislike your across the board generalizations.

Sorry, but yours was a very glib analogy.

Clearly, then, you don't exist.

Hot tempers...it's a global warming thing.

I have both read and heard some hype about oolong tea, which reportedly increases metabolism (to facilitate weight loss) and supresses appetite. Is there any substance to these claims?

My guess is that once you start using gann software your money will be...gann. And that's no fib.

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It is true, the mind boggles. Such a dignified individual...
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That's quite a retrospective. Where did you manage to find so much duct tape to string it all together?

Just one thing, though. My much more modest offering of your choice tidbits was to bring out a specific theme. On the other hand, your attempt at quid pro quo is entirely disjointed and incoherent. I won't say it borders on the abstract, but I suspect it would have even given Jackson Pollock a touch of vertigo.
 
Quote from Thunderdog:

That's quite a retrospective. Where did you manage to find so much duct tape to string it all together?

Just one thing, though. My much more modest offering of your choice tidbits was to bring out a specific theme. On the other hand, your attempt at quid pro quo is entirely disjointed and incoherent. I won't say it borders on the abstract, but I suspect it would have even given Jackson Pollock a touch of vertigo.
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Your theme proved nothing, in spite of your constant amazement with your own abilities.

Conversations with you are like talking to a potted plant. It is fazed neither by what others say or by its own inability to communicate.

I make it a general rule not to, but you are now my first ignore.

And I am quite sure you will follow on with at least one more clueless comment just to make sure you get the last word.

 
Thanks for responding to my post. For convenience I copied and pasted it below. In color, I added a couple of comments.

Most people familiar with the financial industry do recognize the sub system that has provoked you. It has a great audience and many adherants.

On the other hand, the academic community is still in a transition and is also quite fragmented. I observe this from a couple of vantage poiints. One is the usual progression academics make vis a vis grants and associated research. The sequence is: respondiing to RFP's, winning grants, participating in the scene by presentations, then being on panels, then moderating. At some point an academic switches sides and the sequence is: having a GSA contract, writing RFP's, doing reading for publication and for awarding grants, etc.. and writing books and compilations. There are many recognitions and official positions along the way.

My conclusions are that you have not done vending nor participated academically either as a contributor nor as a judge.

There is also the theme of making money through the use of results of research and study. Putting the acquisition of knowledge and skills through experience is also important as a pathway.

What value is linguistics in all of this and how does a tested IQ fit into the picture? You may know as a consequence of your interests. An engineer commented upon his background and it's value for making money.

Making money in trading and using TA to do it is a wonderful life experience. It is, perhaps, a unique niche in the infinite scheme of things.

The comments I made were intended to be evocative so I could round out my view of you from information that you would supply to me. Thank you.

In trading, it is my opinion that people are either on the outside or on the inside. Were we to look at a lot of people doing their various stuff, we would be able to see who was on the outside and who was on the inside. You do not read the P&L. It may be that several posters there are on the inside. Outsiders may not post there.

Basically, a successful user of TA in trading, has a set of experiences that can be used to measure what, how, why and where others are located in the spectrum. Being able to construct the spectrum is a concern.

My current viewpoint is that the vendors do not comprise the spectrum but occupy only part of it. More revealing, is the nature of academia thus far in the transition. Academia hasn't gotten off the ground as yet. Reading abstracts and then pasting them on a continuum will reveal to anyone why things are the way they are. So will the pasting of NSF RFP's on a continuum. The same can be done with Nobel prize award statements.

Where does the answer lie for the TA performance spectrum? It is an iteresting thing to construct from the cold hard reality of how markets work and how the financial industry's rules and the government regulations function.

It was a spectacular experience for me, personally, to have a half century of intimate contact with all these facets.

My conclusions are that anyone can become very wealthy in a short time using a TA based system to make money. The spectrum of system is quite broad form break even to making the indexes to surpassing the indexes and all the way up to extracting what the market offers effectively, efficiently and optimally.

There is no real IQ requirement and the EQ pans out quite normally. as a person goes from breakeven trading to optimal trading, there is a very very major shift in the realization of what a personhas to do to attainknowledge, skills and experience. Learning to learn is paramount and a primary concern is to immediately turn away from anything that is not appropriate.

The reason for this admonition and required practice lies in how the mind works. The consequences are clear and, at some point irreversable.

People simply deny themselves and unlimited opporunity because of their process of acquiring beliefs and conducting their behavior.

A person has an opportunity to go all the way when he is beginning. Gradually, he collects and fits together integral ingredients to make a whole. It is a functioning optimal mechanism for continually extracting what is offered.

Why do not people hold each ingredient up to the light and measure its worth, its shape and its size? You have explained how to not do it quite well. Many many ET'ers continue to explain how not to value and evaluate ingredients.

There are piles of rubbish all over the place. This thread is a collection center and you own it.

As a person begins to learn, he can collect only the jewels. He is at choice. There is no requirement to not make money right from the beginning. In the beginning there are no requirements at all. The field is a completely open playing field.

It is the most beautiful trip in the world. From day one, it is very very clear that the money is offered continually. A simple comparison of what is offered to what a family needs, turns out to be in a ratio that is stellar. Way out beyond the moon and sun...just stellar.

TA is the perfect bridge for anyone who wants to make as much money as they desire.

See the color below.

07-23-07 08:10 PM



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Quote from jack hershey:

Give Park and Irwin (2004) a read. They reviewed 92 studies.

FROM THEIR ABSTRACT: Among a total of 92 modern studies, 58 studies found positive results regarding technical trading strategies, while 24 studies obtained negative results. Ten studies indicated mixed results. Despite the positive evidence on the profitability of technical trading strategies, it appears that most empirical studies are subject to various problems in their testing procedures, e.g., data snooping, ex post selection of trading rules or search technologies, and difficulties in estimation of risk and transaction costs. Future research must address these deficiencies in testing in order to provide conclusive evidence on the profitability of technical trading strategies.

Jack, when studies DO find "positive results" the trading costs usually render them as not worth the effort. You have to read the lengthy list after "58 positive tests." Data snooping in particular renders most of these as considerably less profitable.

This is a "too bad for you" and a great opportunity for me. I do not have any "deficiencies in testing" and I operate using a standard of how effectively I can extract from the offered capital.


continued...
 
continuation....


Simply stated: I look at what is there and I look at what I collected using TA based manual and/or automated systems that work in any market on any fractal for any instrument.

TA tooling is capable, for systems that I use, to allow me to extract what is available either manually or automatically. To attain a comprehensive system takes a scientific effort using the correct mathematics and guarding against any risk or uncertainty.

stated in the terms of the papers above: I start with 5 degrees of freedom and I expand to 70 degrees of freedom. Then I steer and focus on a set at all times that tells me, with certainty, what is going on in the present. All data is binary so what is presented has only one alternative (and that is NOT presented).

It appears that the standard of what the market offers it not commonly used to determine performance. It also appears that the scope and bounds of what has been reported out does not include where people who are maket monet at high money velocities are operating.

I hyave a different test criteria than is used by others. this, criteria for me has precipitated results in a different realm than the one you are familiar with.

...As we review your trading record and posts, we see why you screwed up with TA.

I never posted my trading record and I never said I screwed up with TA.

This was unfair to you. We are keenly aware that you do not post anything related to trading and reporting out results of trading. We just wanted your statement on the record.

A few of the deeply proven aspects of TA include:

1. Support and Resistance.

2. Price movement from S to R and R to S in trends.

3. Gap retracements.

4. Computerized trading.

You didn't bother mentioning the reliable source to support this statement, Jack.

There is a plethora of support for these facets. All of these things are taken into account by most high velocity money making TA trading systems.

You ignored my prior post that introduced the results of Park and Irwin (2004). Why? was it fear, anxiety or anger with the fact that Park and Irwin totally refute you in spades?

You have a major lack of appreciation for "refute in spades." Their list following the "58 positives" plus trading costs is basically what drives practical use of TA rules into oblivion, as I said above.

I have been staying on your turf, mostly. TA provides a spectrum of results. For whatever reasons, focusing on marginal levels of trading using TA, turns out to be a poor use of time. A poor selection of TA rules, specious testing techniques and ignoring trading costs are all in the category of child's play. Even undet these circumstances TA gets a pass on the 92 studies. The point that can be made is to consider high quality TA systems that are very profitable and why they are so profitable.

I feel that, in time, the academic community will settle down. when they do or when they are paid by someone to get to work, then things will start popping. So far, in 50 years, there has never been a wake up call.

For me, I remember when the SEC was just getting up to speed using computers. One of their forays delt with "insider trading". I was not successful in the beginning, in part, because they were citing very successful "front running" traders with big accounts. Had they published their mistakes it would have made for excellent reading on how some high velocity money making is done.

To have citations withdrawn was a very hard struggle since the opposing lawyers (SEC and major brokerage) neither could understand what the other was saying. The accomodation reached had to do, in part, with their failure to detect even better performance in the same accounts. One consequence of the matter was that the brokerage set up a TA department. My personal reward was that I could use their reasearch and data bank as a courtesy they extended and a lot of coat tail trading ensued. Their analysts also picked up several instruments as a consequence.

The SEC got it's act together and stopped citing successful high velocity ront running traders. The SEC was looking for something wrong. They found something right. Academia hasn't reached this point as yet. Traders who do high velocity front running trading are used to being coat tailed. They look at academia and wonder how long it will be before the research criteria will even get into a research ball park with respect to the potential of the markets.

How do you create so many lengthy threads and not understand university/institutional research???

Not to worry. You do not know who I am nor my academic credentials nor participation. My CV was longer than my age as a rule when I began administration.

A wasted mind is a terrible thing. Get into some other kind of endeavor if it is possible.

From the many reports of people who have arrived at an educated opinion of your own trading, you have it backward. I trade just fine. You seem to faile miserably the one time you put yourself to a monitored tracing contest.

Cool, I have it backward. So did the SEC for a while; they found I was making money in an unheard of way that their computers said I was insider trading. I trade for families of adult handicapped offspring. I do not remember how many that now have lifetime trusts. The first was 1961 and there probably won't be a last in my lifetime.

I ask people to learn and pass forward the PVT and SCT. I also ask that they contribute time and/or money to local problems. The fact that this has been going on for 50 years is a proof of success in using TA that is very solid and profound for me.

All those poeple who have learned that what I support and recommend is no good simply have the consequences of their beliefs. Welcome to the crowd. Anyone can choose to not be wealthy.

Learning correctly is not easy. It is work and requires using one's mind pruposefully. for an average person with an open mind and a strong desire to get past the knee of the curve, it is a six month process. After that, it is like riding a bicycle.

If a person wants to be filthy rich and has real determination to keep everything; it just doesn't work at all. There is a reason.
 
Quote from jack hershey:


On the other hand, the academic community is still in a transition and is also quite fragmented. I observe this from a couple of vantage poiints...
My conclusions are that you have not done vending nor participated academically either as a contributor nor as a judge.

I spent 4+ years involved in academia working with researchers. Your observations are somewhat naive. It is extremely well-developed and well-oiled. Many of the brightest minds happen to work there.

In trading, it is my opinion that people are either on the outside or on the inside.

I work in the financial community and I have traded privately for many years, like many here. But (in keeping with some recent posts on this thread) my opinion of "classical TA" is that it has no value, but many people keep getting wrapped up in it. As for the mystical arena of "those traders who warp it using their magical powers into profits" I am not yet convinced, since they seem to be unwilling to get independently tracked or the theory remains that they keep it to themselves


My conclusions are that anyone can become very wealthy in a short time using a TA based system to make money.

I disagree and I see no evidence that this applies to you, and the consensus is that you are unwilling to go under the lights. Go to timertrac.com or collective2.com or timerdigest.com nad be tracked for 6 months. Then I will listen. Otherwise, I remain unimpressed.

There are piles of rubbish all over the place. This thread is a collection center and you own it.

I made a statement based on exhaustive searches and research. Nothing to contradict this so far has risen above the rubbish pile, and what I have heard remains within the OP list of all I ever hear from TA aficianados.


TA is the perfect bridge for anyone who wants to make as much money as they desire.

Yes it is similar to the saying that the best way to make a small fortune, is to start with a large fortune.

etc. etc. I have nothing against you Jack, but words and experiences and beliefs and testimonials do not move me in the least. I have traded for many years, and my conclusions are based on hard cold performance data only.

I posted several things a few pages back, including the abysmal results of CTAs. OF course, there was little response because no one has anything to say.
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Nasrudin was found by his neighbour looking in the street for something.

"What are you looking for," asked the neighbour.
"I'm looking for my key," said Nasrudin.
"Where did you lose it?"
"In my basement."
"Then why are you looking for it here?"
"The light is better here."

===

Don't worry if you don't get it, you will.
 
Quote from rcanfiel:

Does TA work?

CTAs, who by and large favor variations on Technical Analysis, including some EW, Gann, Fib, etc. Yes some probably use Fundamental and other methods, but that seems likely a minority fraction. CTAs, who by and large should be those who have some mastery over the TA field.

One would think these people would include those using both classical TA and all the variations on it that people here in this and other threads claim are successful.

This is the performance of the TOP 40 CTAs of 400 who are registered to this site:

http://www.managedfutures.com/Indices.html

2006 est. 0.71
2005...4.51
2004...2.57
2003...15.99
2002...15.22
2001...5.39
2000...10.63
1999...0.87
1998...12.61
1997...10.22
1996...16.04
1995...13.16
1994...-5.46
1993...14.66
1992...0.89
1991...15.12
1990...37.15

This is even worse, due to survivor bias, where CTAs who go under are removed from contention, and makes th e results look better (described on site). Given the use of leverage, and the fact this is the BEST of the CTAs, still many years they underperform a simple money market fund and many other years underperform the unleveraged market indices.
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Depending on your source you can prove anything.

http://www.autumngold.com/Statistics/RankingReport.php?sort_by=2&desc=1&for=1&type=

On this site the 40 best performing CTA's do on average 18.16% YTD. So not 0.71%.
 
Quote from rcanfiel:

Quote from jack hershey:


On the other hand, the academic community is still in a transition and is also quite fragmented. I observe this from a couple of vantage poiints...
My conclusions are that you have not done vending nor participated academically either as a contributor nor as a judge.

I spent 4+ years involved in academia working with researchers. Your observations are somewhat naive. It is extremely well-developed and well-oiled. Many of the brightest minds happen to work there.

In trading, it is my opinion that people are either on the outside or on the inside.

I work in the financial community and I have traded privately for many years, like many here. But (in keeping with some recent posts on this thread) my opinion of "classical TA" is that it has no value, but many people keep getting wrapped up in it. As for the mystical arena of "those traders who warp it using their magical powers into profits" I am not yet convinced, since they seem to be unwilling to get independently tracked or the theory remains that they keep it to themselves


My conclusions are that anyone can become very wealthy in a short time using a TA based system to make money.

I disagree and I see no evidence that this applies to you, and the consensus is that you are unwilling to go under the lights. Go to timertrac.com or collective2.com or timerdigest.com nad be tracked for 6 months. Then I will listen. Otherwise, I remain unimpressed.

There are piles of rubbish all over the place. This thread is a collection center and you own it.

I made a statement based on exhaustive searches and research. Nothing to contradict this so far has risen above the rubbish pile, and what I have heard remains within the OP list of all I ever hear from TA aficianados.


TA is the perfect bridge for anyone who wants to make as much money as they desire.

Yes it is similar to the saying that the best way to make a small fortune, is to start with a large fortune.

etc. etc. I have nothing against you Jack, but words and experiences and beliefs and testimonials do not move me in the least. I have traded for many years, and my conclusions are based on hard cold performance data only.

I posted several things a few pages back, including the abysmal results of CTAs. OF course, there was little response because no one has anything to say.
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The above is a very cogent post of where you are in the infinite scheme of things. Thanks so much for taking the time that you did and thanks for making the above statements that form a holistic view from the vantage point of the conventional orthodoxy.

I regard your comment as an excellent and correct appraisal of what it looks like being involved with many others of like mind in the financial industry and, perhaps, having the ability to do searches within this realm.

I recognize your commitment to what you have experienced and how it has allowed you to cull through the plethora of records and results in the formal financial industry.

I have only been an amateur and have just worked in various places as a ringer. But at these places I did get to rub up against a lot of rather accomplished people in their work settings.

At this point you make it very clear how well a person can do and your record, in cold hard data is a standard that you feel is reflective of how it can work out for a serious, rational objective person. Naturally, there are many many similar such examples out there that show a statisitically significant sample distribution.

What may be forming here is a set of criteria that could be used as a standard against which to measure any sytem for trading.

I trade PVT as a crossover equities system. I also day trade SCT on an expert level. So far, we have not posted results at these levels of expertise nor mentioned, ever, what they are. We have just stuck to the middle ground of extraction in comparison to what is there.

The black boxes for PVT and SCT cannot be made available to third parties for obvious reasons. You can make all of your automated trading and your corporation's trading available since it fits right into the conventional orthodoxy.

I can only use the results of a team's efforts over a period of time. Verifying it is a simple task up to a certain point. Perhaps you can visualize what the consequences are for doing verifications of unique systems. As you have found out none have been made available to you in your lifetime as an academic, worker in a financail corporation or as anything available to you as an investor. I am very familiar with the reasons why you have not had the experience of seeing, being on a modelling and development team, evaluating or operating such a system. I have had all of these experiences in spades as they say.

The community of people who do this is a quiet one. They do not, often, work for anyone else.

It took me about 20 years to get into a formal development mode. It took me about 25 years before that to begin to formalize what I felt was a good model for equities and for commodities. For about 13 months now, we have been plugging away at C# stuff snippet by snippet. There were no readily available snippets anywhere out there. It is easy to see why.

As you say about research: "It is extremely well-developed and well-oiled. Many of the brightest minds happen to work there." None of them are doing pertinent snippets as yet.

For big money, your CTA comment suffices. They are snippetless as well.

Regarding the C2 kind of thing, I have been in touch with some of the consultants who do snippets for the black boxes of C2 clients who want to get canned. I am not current because I have not been responsive to a set of Q's incoming to me on some recent market shifts in character. I have to say that these people are bright consultants and they do have their own techniques running independantly of C2. They can afford to. It would be frightening to put a black box on one of the locations you mention, simply because of the consequences that would originate.

I would really like to have a set of criteria that would allow a system to be proven and, that, at the same time would not blow the system's cover.

Modelling PVT and SCT happened. So did development. With regard to the SOP for performance, it does not fit into the conventional orthodoxy. It is hard to verify a paradigm with another paradigm's criteria. The bottom line thing I did a few times back. FedEx'ing a bottom line from a broker to another broker for verification, seemed to work for the verifier broker and the originating broker, but it didn't work for many others. People simply want to see everything. The days of an originating broker providing the bottom line and verification prints and hi lited T&S lists to show corresponding times is a little over the top these days.

Reverse engineering was a concern at some point. Incription has been SOP for a while. Commercials are using software teams to build displays, that is not a concern now. Professional traders are being trained for the displays and they are writing books for them to use as references. This is fine since more and more people can pass it forward manually when it is made public.

As you have demonstrated, there is no standard of measure of performance. It would be neat if one were published as a statement or as a software that could be plugged into some way and still preserve the paradigm.

I imagine when this comes to pass it will change things here and there. The first 20 to 30 systems based on non-conventional orthodoxy are really going to shake up the place.

The first guy from a brokerage firm, that visited our place was sort of shaken up a bit. I think he is still working on getting his place up to speed. I think he took poor notes, too.

When we visited traders in the MERC building, it was strange at first. It worked out to some extent. They have only been prepping for a few months now as mentioned above.

There is a sort of space or void in between our two worlds. It is not possible for any reciprocity in any ways that I know of. I am very familiar with your world and how people live and work in it. I have to say that the space our team, one of many, occupies is such a blast. There is never any doubt when one group in our space meets another that, also, is doing a non conventional orthodoxy paradigm; it is known to both parties in a New York minute.

I have experienced reps of at least five different paradigms in the same room. There were a lot of followers of the conventional orthodoxy in the room too. The void between the two persuasions was palpable. So was the realization of the non conventional people.

I don't think you will want to be meeting anyone who is a performer out of your world.

The next five years are going to be a lot of fun.
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