Technical Analysis is total rubbish! Here's the proof!

[FXbeachbum]

I look for further strength in the US dollar, Kiwi would be high up on the short list. I look for a further pickup in inflation in the US. That does not necessarily coincide with any events this upcoming week. What are your views?

I would hypothesize majors become range bound pending the news that takes place this week, this seems to be what happened later in the week last week, any PA will most likely be the result of the multiple unemployment reports, rate statements and GDP reports. I was just curious what you thought because you say the money is made by placing bets before the information is known.

Seems your theory is a continuation of what’s been happening strength in USD and weakness in commodity currencies. This is where TA/PA comes into play a lot of news this week but a return to risk on appetite could change what has been lately. Since TA is more reactionary it’s taking a position based on what’s happening not what one perceived to happen, therefore with the events taking place and noticing more range bound candles later last week I’m flat currencies til I see a set up.

Personally if I was taking pre news release bets(something I used to do) I wouldn’t argue with betting on the way markets have been moving. If the news release moves in the direction of the trend seems there’s more momentum that way.

 

[bone]

Actually there is.Lots of them.

Literally, are you saying that by definition you can foretell or prophesy future market behavior ?

I ask because this is most certainly a far greater level of clairvoyance than modeling market behaviors and taking on calculated risk. If you could truly “predict” market behavior then there is no risk - just exponential profits.

 

[kj5159]

Actually something else I want to mention to you is, if you graphed all the all the people in my community sleep time, it would be normally distributed. In the market, one participants actions may not be random but crowd behaviour can be random and in fact if you do some research on behavioural finance, alot of the actions of a crowd are normally distributed. Just like daily stock market returns. Anyways, GL

Just trying to make the point that human behavior is response to stimuli, not random. I agree on the normal distribution in many cases, central limit theorem comes into play, but with some degree of market efficiency (emphasis on some) present at any one time, or perhaps just shared expectations by a large enough proportion of the group of participants, there is some kind of expectation priced into trading instruments about the future. That's a pattern of behavior. Thus a shared reaction to a change in the input stimuli that caused the original expectation would cause some shared level of change in expectations. Another pattern.

Those ideas alone generate things like support and resistance areas which are not "fundamental" but technical.

Something else that comes to mind is the round number stickiness "phenomenon". XYZ stock $100 per share is not significantly different than $99.50 or $100.50, but people like to buy or sell or put stops or make decisions involving round numbers quite often because our brains like nice neat round numbers, that's got nothing to do with fundamentals, just behavior.

 

[bone]

hahaha yeah i agree: of course there is

I hate to harp on semantics, but this particular case is most important - if, for example, you were to prepare promotional materials for qualified investors, it would literally be illegal for you to state that you could "predict" market behavior or even had a strategy with "predictive capabilities". The SEC and CFTC would not allow it. Neither would SRO's like FINRA and the NFA.

 

[murray t turtle]

Your lines are drawn incorrectly. Thank you for your time.

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He also used the wrong color for sell; red is for sell or stop signs. I did use navy blue for sell, limited use; but only because the bear market of 2000/2001/2002 used all my red ink LOL.,

 

[Buy1Sell2]

You did not even get his point. His point was that despite having drawn the lines without much care on random price charts makes someone be right every now and then. Humans have the humoring ability to explain away losses and see all sorts of things in the occasional gains.

Pay attention. My posting was highly esoteric and you may not have understood it.

 

[murray t turtle]

I hate to harp on semantics, but this particular case is most important - if, for example, you were to prepare promotional materials for qualified investors, it would literally be illegal for you to state that you could "predict" market behavior or even had a strategy with "predictive capabilities". The SEC and CFTC would not allow it. Neither would SRO's like FINRA and the NFA.

%%
GOOD points on being illegal; it would also be a lie. The Old Farmers Alamanac is right about 80%, for much more than 10 years; but that is a weather forecast, not a weather prediction.Of course pretending one can predict is fun; but any 10 year profit/loss market track record proves other wise.

 

[bone]

%%
GOOD points on being illegal; it would also be a lie.

Yep it is literally codified in law on the federal register - you must include in the prospectus that "past performance is no guarantee of future results".

The US government has literally outlawed "predictive" claims in terms of financial and commodity markets. The US government says that markets cannot be predicted and has outlawed saying or even hinting at representations otherwise.

 

[NoodleStrudle]

Where do you get this from? Countless reports contain terms such as "forward looking" or "predictive" There is nothing wrong with that at all. What is wrong and illegal, however, is to disguise a risk of loss or to not mention that an investment may be highly speculative in nature. Most every analysis on Wallstreet is predictive and forward looking in nature and the terms appear in almost every research piece.

I hate to harp on semantics, but this particular case is most important - if, for example, you were to prepare promotional materials for qualified investors, it would literally be illegal for you to state that you could "predict" market behavior or even had a strategy with "predictive capabilities". The SEC and CFTC would not allow it. Neither would SRO's like FINRA and the NFA.

 

[TAfool]

Yep it is literally codified in law on the federal register - you must include in the prospectus that "past performance is no guarantee of future results".

The US government has literally outlawed "predictive" claims in terms of financial and commodity markets. The US government says that markets cannot be predicted and has outlawed saying or even hinting at representations otherwise.

Is that sarcasm? The gov has never said that markets can not be predicted.

What is forbidden is a guaranteed (or implied) return statement on a non-fixed return asset.

Just like the warning on detergent packets, "Do Not Eat", it's in place for the "less educated" among us.

TA