the basic flaws in TA

Surfer

Is a guy that was a Technical Trend Trader and is now writing both of them off as rubbish.

He is also selling COPIES of a Paul Tudor Jones video bootleg here in Et at $300 a crack :confused:

So using YOUR logic surfer HOW can a guy that needs to sell videos at $300 bootleg give any advise on trading be taken seriously?

In order to make logical assumptions doesn't one need to act logicaly to start with?

:D

Sorry Dave but you are behaving a little inconsistantly these days!
 
Quote from Avalanche:

LMFAO.....that long? really?

:p
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i'll admit that its a bit short time period, but 10 percent is 10 percent. Esp when the market is negative/flat during the same time period. I also have witnessed TA work in many other cases.

I'll let you know why techs work. On the nasdaq, most if not all market makers trade on technicals. They are essentially running the market and their primary concern is the technical state of the indexes and their specific stocks. Therefore, if they are paying attention to techs, then they are gonna trade the techs which makes them work.
 
Quote from doublea:

Name please?????
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you're right, there have never been any successful trader's who implement technical analysis techniques


:p

Anyways, are you counting quantitative techniques or when you refer to technical analysis do you mean the discretionary/visual type?
 
Quote from Samson77:

Surfer

Is a guy that was a Technical Trend Trader and is now writing both of them off as rubbish..................



In order to make logical assumptions doesn't one need to act logicaly to start with?
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please samson stop the spurious correlations. allow me to set the record straight--i was NEVER a trend trader/follower as defined by the popularizers of trend following. i trade some markets directionally, and yes, profits arise when one is in the correct direction. however, it is not the commonly understood concept of trend trading of buying higher highs and selling lower lows.

Yes, i was a technician--untill i realized that when tested, the standard technical patterns had no greater percentage of carry thru than random distribution within the parameters would dictate.

i fully expect the inquisition to this thread and welcome it, but kindly lay off the personal attacks, rather, tell me, what patterns or TA tactics have you found that can be tested to show increase one's odds upon entry.

best,

surfer :)
 
If you only need price, then here is one 50.65 which way you going to trade?

This argument of TA not being valid is like saying, price action is not valid.. the price action is reflected in the TA. The TA reflects price action.

This thread is like a dog chasing its own tale.
 
i use very basic t.a. and am consistently successful. However, I also entry trades where I have a very good risk/reward ratio.

TBH, I dont understand whats so hard about it, its pretty easy really.

Buy pullbacks in uptrends,
Sell rallys in downtrends,
Don't sell tops,
Don't buy bottoms,
Don't trade without a trend.

Whats so hard? I dont understand why you dont make money. I can make money intraday but its not worth the effort IMHO (since I'm a trend trader for example, I might have only 1-2 trades in 1-2 days intraday but I have a high success rate). I primarily trade swing since its got the best reward at this time imho.

But anyway, I use VERY VERY BASIC T.A.; for example right now we are at the upper end of the range so I sold all my longs here (that I bought on the triple bottom rejection), I'd be straddling the DIA right now but since next week is Thanksgiving I figure it'll be a dead market, definately Wed. If it stays tight I'll put on a straddle the follow Monday. Plus what about the 300+pip USD/EUR trade I posted (tho later this year I posted one that didn't work for -40 pips)

What I don't understand is why "elite traders" cant even use basic T.A.

If you look at other threads here including ym traders (intraday) and various other stock/futures specific ones, you'll see I post my calls before the move and I'm right (lately) aobut 70-80% of the time tho long-term I'm probably 50% with risk/reward of usually 1:6 or at least 1:3.

You could argue that T.A. is worthless and I'm using good risk reward, but are you making the argument looking at the dow weekly chart for example, that 10700 is a number that the DOW doesn't like to hang around?

Here are my last trades, it just so happens all are profitable breakeven (but not always the case):

All were breakouts, I was supposedly to go long NQ at 1587.50 but it was FOMC day so I dont trade those cause usually you get spikes in both directions before it makes it real move, so I had to use stocks instead of index futures (obviously not as good leverage but w0tever).


AAPL -> 57.61 sold 65
GYMB -> 18.13 sold 20.75
DBRN -> 27.34 stopped breakeven
TRDO 22 -> 22.40 sold (When I liquidated all my longs when dow got the 10700 was an accidental entry)
UNM, SLF, HITK, etc all were recent breakouts from bases look at the chart.

Oh yeah I did lose .40 cents on AMD breakout earlier this week that failed (then it broke again the next day :()

When breakouts are failing I usually stop trading cause it means a pullback is coming.

As a side note on a "technical" perspective the amount stocks are rallying is getting tighter and tighter lately ie before I would go for 25%-30% on a move lately I've been taking 10-18%

anyway, I'm not saying you can make $1million out of $10k trading nq, ym, es currently but you gotta take what it gives you.

TBH, its really not that hard, I think ppl overcomplicate it trying to optimize etc.

Alternatively depending on how it looks I will start shorting stocks in downtrends with the idea that this rally will fail and we stay in the range. Ie we are rangebound until we aren't any longer (ie we break) meaning a breakout and pullback that holds above (or below) the range.

I'm posting this because as it says in Market wizards alot of ppl who were mkaing money before aren't making jack now. Its easy to make money in a clear up trends or downtrends, and sometimes a good trade is not trading at all (ie in tight consolidations). But thats what trading is, there ar etimes there is an edge, you use leverage at those times to make your gains and move on..
 
Quote from sportmatt37:

i'll admit that its a bit short time period, but 10 percent is 10 percent. Esp when the market is negative/flat during the same time period. I also have witnessed TA work in many other cases.

I'll let you know why techs work. On the nasdaq, most if not all market makers trade on technicals. They are essentially running the market and their primary concern is the technical state of the indexes and their specific stocks. Therefore, if they are paying attention to techs, then they are gonna trade the techs which makes them work.
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Are you trading the "market"? If your trading spy, qqq, dia or something and your up 10% vs. it then good, maybe you got something there (maybe not). But there are about 60 stocks up 10% this week alone. About another 40 down 10% Don't mistake TA for just random good luck.

At anyrate not here to argue, but trust me market makers care 99% about "order flow" and that upgrade/downgrade that their buddy just tipped them is comming later in the week and about 1% whether the stock is making some kind of chart pattern.

You put the most bullish chart pattern, indicator reading in the world up against a goldman sachs downgrade and 99% of the time that stock is going DOWN i don't care how good the technials are (were).

:p

Cheers.
 
Quote from cnms2:

Dr. Alexander Elder. (successful TA, non-trend trader)
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you know that for a fact? i.e. that he has consistently made money trading not just selling books and seminars?
 
Quote from marketsurfer:

Hi,

As a reformed heavy TA trader, having seen the light of the basic flawed logic at the core of TA, I am starting this thread to see what will develop. Perhaps, I will come back into the fold of TA traders..... keeping an open mind.

1. I often hear newtonian physics referenced when TA is discussed, generally, it goes like this--- " an object in motion tends to remain in motion, until acted upon by an outside force" obviously the TA practioner is refering to price-- price will continue in the same direction that it is traveling untill acted upon by an outside force. This is absolutely insane ! price is not an object in motion, regardless of what it looks like on a chart. I have heard the gurus of TA and trendtrading refer to this analogy. If the basic analogy contains serious flaws, how can the rest of the concept support itself??



surfer :)
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I think you are absolutely correct on point #1.

Just because information can be graphed to look as if there is a trend (or pattern) does NOT in fact make it true.

try http://www.agribiz.com/merchdiz/cointoss/cointoss.html a few times .


Human neurophysiology is designed to see patterns and does so even if viewing randomness .

However I think that TA serves 2 purposes for traders.
1) It serves as way of looking at what other poker players cards are , ie (anticipating your fellow opponents moves)

2) most importantly I think TA is used by traders as a way of limiting a complex open system into a manageable dataset for evaluation once one has established a BELIEF in whatever system has become mastered.
Finding the system that matches one's beliefs about the market is the daunting task.
 
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