Technical Analysis Doesn't Work

[marketsurfer]

Quote from jeffalvinson:

If TA doesn't work, then why did the 3 day rally on the SPX
fail exactly at the declining 20 day moving average?
"That's a classic textbook technical resistance point for a short term downtrend."

well, does the term "moving" mean anything to you?? its inherent in the structure of the MA for this to occur at times, other times it doesn't. no predictive qualities at all. this particular aspect of TA has been tested ad infinium with sometimes worse than random results for a trader.

surf

 

[marketsurfer]

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

but they are not "driven by people or the herd any longer, as they were prior to the world of the mega fund.

huge funds seek to exploit every inefficiency, throwing money at whims, rumours and real information or driven by highly complex algos running in milliseconds on super computers seeking to capture each and every stray dollar. if they are subjective funds, which there are some huge ones, one person now controls what use to be controlled by 1000's and if you think you know when he decides to buy/sell whatever and throws the market by using TA---you are truly delusional--not to mention the obvious----

TA only reflects the past, and i agree it works well for illustrative purposes. one needs to understand the real drivers of today and not live in the past no matter how comforting the above platitudes are.

and no behavioral finance has NOTHING to do with TA--- where did this idea come from?

may i suggest learning about program trading and reading "equity markets in action" by schwartz for a basic primer on what is actually happening on a day to day basis.

regards,

surf


ps. not to mention hedgers and other monster commercial interests buying/selling to balance their exposure---trust me, this has nothing to do with TA.

 

[NihabaAshi]

Quote from marketsurfer:

...and no behavioural finance has NOTHING to do with TA--- where did this idea come from?...

I thought the same thing (has nothing to do with TA) until recently...

I believe this is a new study or approach to TA and there's a few books on the topic or with a few chapters devoted to it.

Not sure where I saw it but there was different sources (different studies via different authors) and I'm sure its searchable on the net.

Mark

 

[marketsurfer]

Quote from NihabaAshi:

I thought the same thing (has nothing to do with TA) until recently...

I believe this is a new study or approach to TA and there's a few books on the topic or with a few chapters devoted to it.

Not sure where I saw it but I'm sure its searchable on the net.

Mark

ok, that's news to me. if you happen to find any information on this new connection, let me know--thanks.

best regards,

surf

 

[PitchBlack]

Quote from marketsurfer:


and no behavioral finance has NOTHING to do with TA--- where did this idea come from?

What you say is that behavioral finance has everything to do with TA. ( no....NOTHING)

I find it strange that you don't accept my view on behavioral finance , but at the same time seem to be interested when this item comes from Niha...
I studied behavioral finance already in 1990. At that time people found it a crazy idea. Some people at ET know by now that the idea was not so crazy at all.

 

[marketsurfer]

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.

this simply is false. TA dept. are normally part of the marketing arm of investment banks--to "sell" ideas not actually trade with

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).

Once again this is totally false--TA provides descriptions of what happened, its no the cause of anything, i think even TA wonks will agree here

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.

unfortunately, you are exhibiting classic "true believer" sentiments and there are no facts to back up anything you have said, although said well


SURF

 

[ljyoung]

The basis is rigorous institutional reviews before these make it into the journals. I have participated in reviews and in studies. I don't get the feeling you have.

Your grasp is weak.

And as I said, most studies pass rigorous review by fellow institutions before publication. You are making zero points here if you are trying to paint it as flawed. They made very clear what the purpose and findings were.

well, at least you know how to string together long words.

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

 

[marketsurfer]

Quote from spike500:

What you say is that behavioral finance has everything to do with TA. ( no....NOTHING)

I find it strange that you don't accept my view on behavioral finance , but at the same time seem to be interested when this item comes from Niha...
I studied behavioral finance already in 1990. At that time people found it a crazy idea. Some people at ET know by now that the idea was not so crazy at all.

no offense meant, if your a trader or into the market-- your my friend--even proflogic types!

im totally interested in learning something new and truly apprieciate your input--sorry if i come off otherwise. however i think there is a basic misunderstanding of illustrative function of TA and actual projection function within B, finance. B.finance may use TA charts to illustrate the market---but as far as i know, this is as far as it goes, or could go outside of sketcy,whimsical theory.

surf

 

[PitchBlack]

Quote from marketsurfer:

no offense meant, if your a trader or into the market-- your my friend--even proflogic types!

im totally interested in learning something new and truly apprieciate your input--sorry if i come off otherwise. however i think there is a basic misunderstanding of illustrative function of TA and actual projection function within B, finance. B.finance may use TA charts to illustrate the market---but as far as i know, this is as far as it goes, or could go outside of sketcy,whimsical theory.

surf

My native tongue isn’t english, so i do not always understand the small differences between the words that are used. But to me TA is a visualisation of calculations.
I discovered 8 different strenghts in market movements. Strenght means in this case a certain behaviour. For each kind of behaviour (strenght) I have a corresponding scenario to go long, short or to do nothing at all.
Each scenario tells in advance what the market will do.
About the reliability: normally about 90% of the trades are profitable and I give back less than 5% of the total profits in my losing trades. This is the result of the fact that I know always in advance what I have to do ( this doesn’t mean that the system is always correct, but damage is always limited).
After 17 years of trading I know that there are many system that cannot give that kind of information.

http://elitetrader.com/vb/showthread.php?s=&postid=781685&highlight=decisiontable#post781685

 

[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