the basic flaws in TA
- Thread starter marketsurfer
- Start date
Quote from Avalanche:
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).
Cheers.
I have about 10 securities in a 50k account with 100k buying power. I trade SPY's ocasionaly, but the real money is in breakouts as someone else was saying. You just wait for a sock that breaks through a definitive trend line or resistance/support level. 90 percent of the time it will keep moving inthat direction. Look at yhoo this week, you could have made a killing on that; not by having a great guess on what the earnings would be, but by waiting, seeing the price action and acting.
Second of all, NASDAQ market makers are very different. Knight Capital Group is the biggest NQ market maker, and I know for a fact that the only thing they use is TA. I worked on the floor with the Tech analyst; his calls were like art - it was glorious
. He didnt care a thing about those millions of FA indicators, he just looked at the PA, look at 3 indicators and was able to derrive all of the market information from them. If you make TA too confusing - then it will be. If you can keep it simple then you will be profitable.
Quote from oddiduro:
Fooled by Randomness?
I would agree with you that it was random if i was trading only 1 or 2 stocks and got lucky with one. But over the month, i traded between 30-40 different equities. some lost, but with good risk managment they didnt hurt. When other's ran, then thats where you get the big money.
Waow ! since september...and up 10%... I'm impressed.....
Is there a need for a reminder as to what TA is?
Technical Analysis is analysis of price behavior by itself. That may or may not include the use of indicators.
Fundamental Analysis is, as I am sure everyone knows, looking at the facts and status of a quoted company's activities to see where its share price should be going. Of if it is a commodity futures, FA is assessing actual supply and demand of the commodity and how that should effect its price.
Technical Analysis is analysis of price behavior by itself. That may or may not include the use of indicators.
Fundamental Analysis is, as I am sure everyone knows, looking at the facts and status of a quoted company's activities to see where its share price should be going. Of if it is a commodity futures, FA is assessing actual supply and demand of the commodity and how that should effect its price.
thanks...i don't know if you were being sarcastic or not but thanks anyways.
I'm not trying to brag, as I am in no position to brag since I am 17 and have only actively trade since september. I know you all have 10 times as much experience as me and I do not think at all that I am even close to the same level as you pro traders. I just wanted to share with you my experiences with TA and that it has been successful for me.
Quote from nkhoi:
so this stuff is flawed?
sure, for prediction. i was showing the past for demonstration purposes--- the perfect use of TA.
awesome responses everyone, thank you !
surfer
yes !!!!
therefore, untestable.