Technical analysis :useless junk science

Technical Analysis Redefined

Combining extremes in TRIN, volume, and proximity to potential reflective boundaries, creates an indicator that correctly identified seven major bull markets and four major bear markets. (see charts appendix 6 and 7)

We have demonstrated that at significant turning points, the ultimate trend of the market can be predicted. We have introduced a new idea in technical analysis, the idea of “reflecting boundaries.” While in this paper we have demonstrated longer term boundaries, this idea can be used for the shorter term as well. This concept when used in conjunction with existing technical indicators can greatly assist the analyst in pinpointing market turning points. We hope this paper opens new possibilities for those who work at this mystifying discipline.

http://knowledgebase.mta.org/?fusea...esourceID=1F345B82-C218-7BF1-FE6D3A74FE4EB737
 
don't forget R-MESA

10 consecutive years results.

Consistently top rated by Futures Truth for day trading results.

Yes- day trading with TA
 
Quote from Xspurt:

Worlds Richest TA Traders

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I was very happy to discover that the Forbes Rich List was scattered with investors and hedge fund managers who have profited handsomely despite giving fundamentals a back seat. Here are my favorites from the 2009 list:

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2009 Forbes – #55 James Simons – 8.0 Billion

Sometimes referred to as the ‘King’ of hedge funds he is also a maths guru and a very smart cookie who studied maths at MIT and got a Ph.D. from UC, Berkeley. Simons deciphered codes for U.S. department of defense during Vietnam and went on to found Renaissance Technologies in 1982 which at the start of 2009 was managing over 15 billion.

He Co-authored Cherns-Simons theory in 1974; a geometry based formula now used by mathematicians to distinguish between distortions of ordinary space that exist according to Einstein’s theory of relativity. In addition to this it had been used to help explain parts of the string theory.

Renaissance Technologies is a quantitative hedge fund that uses complex computer models to analyze and trade securities. A $10,000 investment with them in 1990 would have been worth over $4 million by 2007.


We are a research organization… We hire people to make mathematical models of the markets in which we invest… We look for people capable of doing good science, on the research side, or they are excellent computer scientists in architecting good programs. - James Simons


The flag ship Medallion Fund trades everything from Pork Bellies to Russian Bonds. In 2008 the fund forged ahead another 80% even after the 5% management and 44% performance fee. Unfortunately the Medallion fund is now only open to employees, family and friends.

The key to the success of Renaissance Technologies has much to do with the people they hire; PhDs and not MBAs. About a third of their 200 employees have PhDs. Those on the payroll include code breakers and engineers, people who have worked in computer programming, astrophysics and language recognition.

They also look for people with creativity. Simons says that creativity is about discovering something new and you don’t do that by reading books or looking in the library, you need ideas.

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Everything’s tested in historical markets. The past is a pretty good predictor of the future. It’s not perfect. But human beings drive markets, and human beings don’t change their stripes overnight. So to the extent that one can understand the past, there’s a good likelihood you’ll have some insight into the future. - James Simons


2009 Forbes – #87 Steven Cohen – $5.5 Billion

Now a well know force on Wall Street due to his world class performance and high volume of trading which accounts for about 2% of the daily volume on the New York Stock Exchange. Steven started trading options in 1978 and made $8,000 on his first day.

He founded hedge fund SAC Capital in 1992 with $25 million in assets. By the end of 2007 SAC had about $16 billion under management across 9 funds and had averaged 36% net return annually. It is reported however that SAC suffered a loss of approximately 15% in 2008.

Steven keeps his activities very secretive but his style is understood to be high volume hair-trigger stock and options trading.

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The old guard wasn’t crazy about me, I used to hear it all the time… Most of the old-school had no belief in anything that wasn’t based on fundamental analysis… We were trading more than investing, and people frowned on it, they looked at it and didn’t want to partake. Finally, they said, ‘Shoot. He’s making money.’ And they started copying me. - Steven Cohen

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He believes that 40% of a stocks price fluctuations are due to the market, 30% to the sector and 30% to the stock itself.

Despite the great performance of SAC Capital their best trader makes a profit on 63% of their trades while most of the traders are profitable 50-55% of the time. Interestingly 5% of their trades account for virtually all their profits. Something to keep in mind the next time you get a spam email claiming that your can buy a 95% accurate ‘Stock Trading Robot’.

Steven attributes the success of SAC to the breath of experience and skills found in the people working for the firm. They look for traders who have the confidence to take risks, those who wait for someone to tell them what to do never succeed.

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You have to know what you are, and not try to be what you’re not. If you are a day trader, day trade. If you are an investor, then be an investor. It’s like a comedian who gets up onstage and starts singing. What’s he singing for? He’s a comedian. - Steven Cohen


Forbes 2009 #224 – Paul Tudor Jones II – 2.8 Billion

Both a discretionary and systems trader who had his early success trading cotton futures. Jones majored in economics at the University of Virginia in 1976 and got a job working for the cotton speculator Eli Tullis not long after graduating. The greatest lesson that he learnt from Eli was emotional control but was later fired for falling asleep on the job after a big night out on the town with his friends.

In 1983 Jones began the hedge fund Tudor Investment Corp with $300,000 under management. At the end of 2008 the fund was estimated to be managing $18 billion and had achieved an average annual return of 24%.

Much of his fame came from predicting the 1987 stock market crash from which he pulled a 200% return or roughly $100 million. Jones claims that predicting the crash was possible because he understood how derivatives were being used at the time to insure positions and how selling pressure on an over priced market would set off a chain reaction. He says that you need a core competency and understanding of the asset class you are trading.

He attributes his success to a deep thirst for knowledge and strong risk management. Jones is a swing trader, trend follower and contrarian investor who also uses Elliot Wave principles. Most of his profits have been made picking the tops and bottoms of the market while often missing the ‘meat in the middle’. Jones believes that prices move first and fundamentals come second.

A self professed conservative investor who hates losing money. He tries to identify opportunities where the risk/reward ratio is strongly skewed in his favor and does not use a lot of leverage. In his eyes a good trader is someone who can deliver an annual return of 2-3 times their largest draw down.

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Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead… my guiding philosophy is playing great defense. If you make a good trade, don’t think it is because you have some uncanny foresight. Always maintain your sense of confidence, but keep it in check. - Paul Tudor Jones II
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Stop dreaming these traders do not use t/a , some crooks use insider information.There is no evidence to suggest any of them use t/a.
 
The Pioneers Of Technical Analysis


All Things Flow from Dow
Charles Dow occupies a huge place in the history of finance. He founded the Wall Street Journal – the benchmark by which all financial papers are measured – and, more importantly for our purpose, he created the Dow Jones Industrial Index. In doing so, Dow opened the door to technical analysis. Dow recorded the highs and lows of his average daily, weekly and monthly, correlating the patterns with the ebb and flow of the market. He would then write articles, always after the fact, pointing out how certain patterns explained and predicted previous market events.

However, Dow can't take all – or even a majority of - the credit for the theory bearing his name. Dow Theory would have only acted as a hindsight confirmation of loose principals if it weren't for William P. Hamilton. (To learn more, see Giants Of Finance: Charles Dow.)

First One into the Water: William P. Hamilton
Dow Theory was a collection of market trends linked heavily to oceanic metaphors. The fundamental, long-term trend of four or more years was the tide of the market – either rising (bullish) or falling (bearish). This was followed by shorter-term waves that lasted between a week and a month. And, lastly, there were the splashes and tiny ripples of choppy water insignificant day-to-day fluctuations.

Hamilton used these measures in addition to a few rules – such as the railroad average and the industrial average confirming each other's direction – to call bull and bear markets with laudable accuracy. Although he did call the 1929 Crash too early (1927, 1928), he made a final appeal on October 21, 1929, three days before the crash and mere weeks before his death at the age of 63.

The Practitioner, Robert Rhea
Robert Rhea took Dow Theory and turned it into a practical indicator for going long or short in the market. He literally wrote the book on Dow Theory, "The Dow Theory." Rhea was successful at using the theory to call tops and bottoms – and able enough to profit from those calls. Very soon after mastering Dow Theory, Rhea didn't need to trade on his knowledge. He only had to write it down.

After calling the market bottom in 1932 and a top in 1937, the fortunes made by subscribers to Rhea's investment letter, Dow Theory Comments, brought in thousands more subscribers. As with Hamilton, however, Rhea's life as a market prognosticator was short - he died in 1939. (Learn more about the Dow Theory in our Dow Theory Tutorial.)

The Wizard, Edson Gould
Perhaps the most accurate forecaster with the longest track record, Edson Gould, was still making calls up to 1983 at the age of 81. Gould also made most of his money from writing newsletters rather than investing, selling subscriptions for $500 in 1930. He caught all of the major bull and bear market points, making several eerily accurate predictions, such as the Dow rising 400 points in a 20-year bull market, that the Dow would top 1040 in 1973 and so on.

Gould used charts, market psychology and indicators including the Senti-Meter – the DJIA divided by the dividends per share of the companies. Gould was so good at his trade that he continued to make accurate calls from beyond the grave, calling Dow 3,000 before his death. He was proven right even in this prediction that was considered on the very fringe in 1979, when he made it and the Dow had yet to break 1,000.

http://www.investopedia.com/article...pioneers-technical-analysis.asp#axzz25yyFGN8m
 
Quote from oilfxpro:

Stop dreaming these traders do not use t/a , some crooks use insider information.There is no evidence to suggest any of them use t/a.
More...

Contact the SEC and tell them you have discovered their testimony of using TA is false and you can prove it was really illegal insider dealing. They will be delighted to hear from someone of such online repute.

By the way, how many gullible folks have you sold your losing get rich quick trading systems to? And you have the gall to come here and play Mr. Innocent, you scammer...

https://www.google.co.uk/#hl=en&gs_...pw.r_qf.&fp=a580d33dc73e4f57&biw=1680&bih=918


https://www.google.co.uk/#q=oilfxpr...pw.r_qf.&fp=a580d33dc73e4f57&biw=1680&bih=918


https://www.google.co.uk/#q=oilfxpr...pw.r_qf.&fp=a580d33dc73e4f57&biw=1680&bih=918

In chart view...

https://www.google.co.uk/search?q=o...jKmgW35YCIBQ&ved=0CEsQsAQ4Cg&biw=1680&bih=918
 
Quote from Xspurt:

Contact the SEC and tell them you have discovered their testimony of using TA is false and you can prove it was really illegal insider dealing. They will be delighted to hear from someone of such online repute.

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Whether or not "they" use TA-- which they do not, by the way, as retail would--- is irrelevant. Every casino has its consistent winners-- its called surviorship bias--the managers you list are the "survivors"=== you don't hear from the losers.
 
Quote from marketsurfer:

Whether or not "they" use TA-- which they do not, by the way, as retail would--- is irrelevant. Every casino has its consistent winners-- its called surviorship bias--the managers you list are the "survivors"=== you don't hear from the losers.
More...

Your clearly wrong Surf, yes they use TA.

Yes there are winners and losers in everything in life and you hear lots form the loser, just look at the title of the thread.


Btw, don't you have a Price Driver short on JPM? Oops! Shuda asked for some TA on that baby.
 
Quote from euclid:

which is the definition of TA.

So you are saying daytrading using TA is the Holy Grail. :)
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using price and mathematical formula is different from using t/a based on history to predict future prices.It is not the same.
 
Quote from Xspurt:

Your clearly wrong Surf, yes they use TA.

Yes there are winners and losers in everything in life and you hear lots form the loser, just look at the title of the thread.


Btw, don't you have a Price Driver short on JPM? Oops! Shuda asked for some TA on that baby.
More...

How can somebody who eats noob sandwiches be an expert on technical anylysis , after all he can't get sandwiches from t/a?
 
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