Technical analysis :useless junk science

ssrrkk · Sep 1, 2012

By the way this slippage associated with MA crosses is at the heart of the problem. The likely reason you are seeing such large differences by using the next minute bar as opposed to the signal minute bar is because at those times when the MA crosses over, there is a relatively large and quick move in price which often (but not always) signals the beginning of a larger trend. And if the trend doesn't materialize, then you have incurred especially huge slippage at those entries and exits. So my statement that "slippage and commission will kill you" is still correct. It's especially pronounced when using MA crosses as signals. But slippage is slippage, defined simply as not being able to get the price you want.

oilfxpro · Sep 1, 2012

Quote from d08:

It's not hard to reverse engineer any system with enough time and a large sample of trades. You don't need to see any of the code to do it and you cannot patent or protect a trading system at all.

If someone has something that works and works well, they'd never sell it. By definition, buying a system is buying something that doesn't work well. And by working well, I mean having significant edge.

It is not possible to reverse engineer a system that works consistently , simply because a great system would be so complex and have so many variables .Just as an I example , I had 44 automated sub systems (something you would class as a system) working together to make up a single system.Even after putting together 44 systems , the results were meagre 15 % a year , and t/a systems performed the worst .

d08 · Sep 1, 2012

Quote from oilfxpro:

It is not possible to reverse engineer a system that works consistently , simply because a great system would be so complex and have so many variables .Just as an I example , I had 44 automated sub systems (something you would class as a system) working together to make up a single system.Even after putting together 44 systems , the results were meagre 15 % a year , and t/a systems performed the worst .

That's one of your problems right there, you think good systems are complex. They are not. Less is more applies to trading as well.

R. Raskolnikov · Sep 1, 2012

Uh, yes it's very possible to reverse engineer a working system. I'm smart but I'm not brilliant, and I'm SURE if someone saw enough of my trades they would figure out what I look for and what triggers my trades. It's complex but not that complex.

Quote from oilfxpro:

It is not possible to reverse engineer a system that works consistently , simply because a great system would be so complex and have so many variables .Just as an I example , I had 44 automated sub systems (something you would class as a system) working together to make up a single system.Even after putting together 44 systems , the results were meagre 15 % a year , and t/a systems performed the worst .

oilfxpro · Sep 1, 2012

Quote from R. Raskolnikov:

Uh, yes it's very possible to reverse engineer a working system. I'm smart but I'm not brilliant, and I'm SURE if someone saw enough of my trades they would figure out what I look for and what triggers my trades. It's complex but not that complex.

Ah ! your trades versus complex algo.

Have any you ever reverse engineered a complex system which works consistently?<NO

R. Raskolnikov · Sep 1, 2012

The thread title says technical analysis is junk. My trading is based on proprietary objective TA. So my response was appropriate.

Quote from oilfxpro:

Ah ! your trades versus complex algo.

Have any you ever reverse engineered a complex system which works consistently?<NO

kut2k2 · Sep 1, 2012

Quote from d08:

It's not hard to reverse engineer any system with enough time and a large sample of trades. You don't need to see any of the code to do it and you cannot patent or protect a trading system at all.

How would you go about doing that and how large a sample of trades do you need? Thanks.

kut2k2 · Sep 1, 2012

Quote from d08:

That's one of your problems right there, you think good systems are complex. They are not. Less is more applies to trading as well.

Well they don't have to be "super complex" (e.g., putting together 44 subsystems) but they do have to be more complicated than MA crossovers.

oilfxpro · Sep 1, 2012

Quote from R. Raskolnikov:

The thread title says technical analysis is junk. My trading is based on proprietary objective TA. So my response was appropriate.

What is difference between objective proprietary and subjective t/a systems?Is this an opinion or proof to us about t/a?

d08 · Sep 1, 2012

Quote from kut2k2:

How would you go about doing that and how large a sample of trades do you need? Thanks.

I've reversed one system that wasn't overly complex and I had the initial idea at hand. That infers, the geniuses involved in finance would be able to do it with very little effort and possibly without having any initial idea about the structure.

Quote from kut2k2:

Well they don't have to be "super complex" (e.g., putting together 44 subsystems) but they do have to be more complicated than MA crossovers.

I agree, actually I see zero value in MA crossovers but I cannot rule out there is someone using this method profitably somewhere - they might be using a completely different instrument, time-frame/tick based charts and so forth. Basic crossover strategies do seem too simplistic, however most people who backtest add parameters and rules without much thought.