the basic flaws in TA
- Thread starter marketsurfer
- Start date
This is an incredibly illogical argument. Sure good news, bad news, earnings effect the market/stock, that does not say anything about the general validity of TA. TA works with a sequence of events and not just one particular event (let's say Greenspan caughed).
By the way Dave, talking about generally TA if it is good or bad is a huge oversimplification. TA is huge. You could argue about small parts of it (Bollinger, RSI, SMA crossover, whatever)if they are valid or not, (some are and some aren't), but with overgeneralization you are not going anywhere and the thread is pointless.
Also, just what were you thinking, what did I use for my predictions, my cat's tail? Well, I used TA......
This is not a correct argument. I don't know for a fact that he does, and you don't know for a fact that he doesn't. You have to believe sometimes more than only the things that you can verify yourself or that you can understand.
But I'm pretty sure that dr. Alexander Elder is a successful TA trader. And I believe that there are many others successful too.
It doesn't mean that if I can't speak Chinese nobody can ..., or does it?
This ET thread My Options Play by Multioption is based on TA. It's a good example of complete TA breakdown. 163 pages of HELL for Multioption as he tries to prove TA works on live trades only to see major losses.
Hey Surfer,
Good to see you allowed to post as yourself again.
This whole argument is flawed. What you've done is the old "I would like to negotiate with an mba because hes so intelligent that if you keep asking him for reasons why, he will eventually come up with some that you can knock apart" strategy.
So you quote silly analogy one ... price = physics ... and as someone with undergraduate degrees in physics and graduate degrees in finance I can assure you that it aint true
And then you quote limited analogy one ... price is everything (maybe we both misquoted this one) ...
and based on two silly/limited arguments you say "TA doesn't work."
Sorry, old boy, but that doesnt make the case.
Also, those who say "i tried it, or Xxx tried it, and it didn't work" havent proved anything either. I bet I can find some people who failed in trading at any strategy you could name. LOL, its the nature of this beast.
And, then of course, people like me who use forms of price series analysis (I do ignore everything except price and time) and make money doing it say "this proves it works." But of course we're wrong as well because we just might be the lucky subset (with a corresponding subset who fail doing the "same" thing).
So the whole argument becomes a joke (like the "do trendlines work threads" - answer = they do for you if you make money with them).
Which brings me to my old signature
________________________
The things people believe in are usually just what they instinctively feel is right; the justifications and arguments are the least important part of the belief.
That's why you can win the argument, prove them wrong, and still they believe what they did in the first place. You've attacked the wrong thing.
So what do you do? Agree to disagree. Or fight. - C. Zakalwe.
Good to see you allowed to post as yourself again.
This whole argument is flawed. What you've done is the old "I would like to negotiate with an mba because hes so intelligent that if you keep asking him for reasons why, he will eventually come up with some that you can knock apart" strategy.
So you quote silly analogy one ... price = physics ... and as someone with undergraduate degrees in physics and graduate degrees in finance I can assure you that it aint true
And then you quote limited analogy one ... price is everything (maybe we both misquoted this one) ...
and based on two silly/limited arguments you say "TA doesn't work."
Sorry, old boy, but that doesnt make the case.
Also, those who say "i tried it, or Xxx tried it, and it didn't work" havent proved anything either. I bet I can find some people who failed in trading at any strategy you could name. LOL, its the nature of this beast.
And, then of course, people like me who use forms of price series analysis (I do ignore everything except price and time) and make money doing it say "this proves it works." But of course we're wrong as well because we just might be the lucky subset (with a corresponding subset who fail doing the "same" thing).
So the whole argument becomes a joke (like the "do trendlines work threads" - answer = they do for you if you make money with them).
Which brings me to my old signature
________________________
The things people believe in are usually just what they instinctively feel is right; the justifications and arguments are the least important part of the belief.
That's why you can win the argument, prove them wrong, and still they believe what they did in the first place. You've attacked the wrong thing.
So what do you do? Agree to disagree. Or fight. - C. Zakalwe.
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, untill 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??
2. All factors are reflected in price, therefore all one needs is the price to make succesful trades. Once again this commonly stated "fact" by TA practioners is serious lacking when examined. price is but one aspect of true analysis and understanding, The TA practioners handicap themselves by repeating mantras such as this.
can anyone add to the list of plain stupid TA "facts" ?
more to come.....
surfer
Sachs upgrades / downgrades a stock not more often than a few months apart. You can apply TA everyday, and you'll be right some times and wrong other times. Use money management, and you'll weather nicely any adverse Sachs' action.
What's your trading approach? What do you trust to make trading decisions?
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...
surfer
so this stuff is flawed?
Hi u_guest, I have to disagree with you on this thread too
Multioption started his thread because he was successful in the past, and he just wanted to prove it publicly. Unfortunately so far his stunt didn't work, but nobody claims that TA works all the time. It works statistically as so many other fields of human activity: i.e. medicine and weather forecast, to name only two of them.
Also, as somebody mentioned on this thread, TA is a very wide field and with a very large number of followers. You can't dismiss them off hand.
I asked somebody else on this thread: what does it work for you? Why do you think that your approach is more sound than TA?