Technical analysis :useless junk science

[cornix]

Quote from marketsurfer:

No. Let me explain-- Price and volume are what has happened-- once they occur its simply too late-- being one or more steps ahead of price by understanding price drivers like economic news, earnings, COT report, big players, and a host of other factors that effect price is the only way to win. surf

Let's take the following example: accumulation of instrument X starts in the price area Y providing TA trader with the pattern, which shows with average historical probability of 60% and average historical R:R of 1:3 that it really is accumulation of a serious amount, likely to spawn a new trend.

Would such an entry, based on past statistics be "too late"?

 

[cornix]

Quote from oilfxpro:

Do you know any Siberian tigers who leave clues?

Have never met a tiger living in Siberia.

Quite many bears though.

 

[cornix]

Quote from marketsurfer:

I'm surprised that as an academic you give TA any creedence at all. I have have several finance Phd's as friends, I have employed one, and am married to another. TA is considered noise traders by most academics. Show me one top tier journal that has ever published pr0- TA papers. There are not any. surf

PS> Yes, I do trade and have traded -- since 1990.

Being a member of family of at least 5 generations of people devoting their life to science and having Ph. D. myself I can definitely say academics are wrong just as often as ordinary people.

 

[oraclewizard77]

I am not sure I understand the difference. Isn't Price Action a form of TA? Also, I agree it can take 5 - 10 years to learn how to trade correctly. If it was easy, anyone could be profitable.

Quote from Handle123:

The problem with most traders, whether they use Price Action or TA are the same, inability to understand, inability to backtest over large enough data samples, too lazy, jumps around a great deal, too many don't go beyond the books, too many don't do blind testing(get rid of the bars and write down what Price is supposed to be doing) AND THIS IS HUGE. Indicators are supposed to behave in a certain way dealing with price like 99% of the time, when they don't, there's an opportunity, but most rather blame something, that's the American way. AND MOST open an account and just trade cause they can "feel" what the market is going to do, ROFLMAO. Marigin Call.

I started with pencil and chart paper, I learned and studied for three years before opening an account, and I was darn lucky it cost too much to do short term trading at $125 for 100 shares of IBM way back when. When I learned how to use indicators, I did them by hand for seven years, I learned why they do certains movements with price, nobody does this any more.

What indicators were NOT supposed to do was to get one into a trade and out, but to learn about relationships. You only need one good to sloppy way to get in, and then 40 rules to figure out what to do after. But too many constantly working at better entries which are only needed if you Scalp. Too many are trying to get thousands out on a one lot instead of finding a few trades that are consistent and go home. My favorite is when one has a losing trade and figuring out of extending the risk to make it profitable.

People who sell software, you think if they knew how to trade, they be hawking software?

How many traders have failed using Price Action? Bet it just as many as others do with TA.

 

[Xspurt]

Quote from marketsurfer:

Succesful traders understand what moves price, price itself is not sufficient despite the TA followers. Knowing the factors that effect price and the odds of these factors pushing price, prior to your entry, is the correct way to think about the market. Studying past prices is mental masterbation. surf

You mean a price driver like this?...

How come your price driver called a short way down below? Isn't hanging in there a bit of intellectual masturbation?

 

[Xspurt]

It's important for TA guys to understand how price drivers really effect the market. First of all, forget the fluff that surf preached about magic price drivers that leave TA for dead. I know from first hand experience of mentoring a quant prof. from a top uni that they can tell what is going to happen in the next few micro seconds to the next few full big seconds, but the further out you go the less they know and that's why the prof came to me.

All their coding and formulas are about what is happening now and of course that leaves me way behind their wake. We might be 30 seconds behind them but we have one giant advantage - TA. TA gives us a way to quantify the probabilities of a move and determine the probability of a domino effect through time frames so we can ride it out - be that for a few minutes or several hours.

Here's an example of TA elephant price drivers on a 3 pip Euro chart with buying volume added to the top of a green candle and selling to the bottom of a red candle for fast reading. This is not the same volume as on the bottom of the chart as this relates to traders past actions. I don't need the microsecond trade, I want to follow the elephants. Knowing that as the tiny 3 pip engulfer forms elephants are exposed accumulating a position lets me jump on the move.The exact same thing applies on all time frames, but you'll not find it at BabyPips.

There's a learning curve in TA that is well worth the effort, but if you don't have the tools and pay your dues in developing TA skills, then of course it's all junk - after all it wouldn't do to blame oneself, would it?

 

[college ruled]

Quote from marketsurfer:

Succesful traders understand what moves price, price itself is not sufficient despite the TA followers. Knowing the factors that effect price and the odds of these factors pushing price, prior to your entry, is the correct way to think about the market. Studying past prices is mental masterbation. surf

The only 3 things I see that move price are fundamentals, classic TA and sentiment. About which of these three are you speaking to? Am I missing something..is there a fourth?

 

[marketsurfer]

Quote from college ruled:

The only 3 things I see that move price are fundamentals, classic TA and sentiment. About which of these three are you speaking to? Am I missing something..is there a fourth?

None of those three things move price. TA simply illustrates what price has done. The only thing that moves price is money flows--- sentiment doesn't move price as one pissed off hedge fund manager will outweigh 1000 bullish retail investors. No wonder most traders lose money, even the most simple ideas of how the market really works are rejected for "feel good" ideas like trend etc.

 

[oilfxpro]

Quote from college ruled:

The only 3 things I see that move price are fundamentals, classic TA and sentiment. About which of these three are you speaking to? Am I missing something..is there a fourth?

failure of t a

here pivots are useless failures

 

[Xspurt]

Quote from oilfxpro:

failure of t a

here pivots are useless failures

Oily you brighten my day up.

I am not quite sure how to respond! Is that what you think TA is - a line of potential S&R? Let me see now - how long would it take to learn that TA... 30 seconds?

It must go something like this: here are Pivot Points and PA will reverse at these levels. Bummer, they didn't.

Okay that proves TA fails!

You have spent what is it, 9 years on EA's? It's wrecked you Oily. Even BabyPips is above this level of understanding and I don't know any level below that.

Oh well

You actually have reactions and breakouts, but there's really no point in me explaining, is there?