Unbelievable but true: CFTC declares Technical Analysys as FRAUD :D!!!

I think the biggest things the economists get wrong is that market trend towards an equilibrium value given a sufficient amount of time.

Economists also forget the human factor that is involved in buying/selling instruments. People may buy MSFT because they like the software, people may buy XOM because they see oil prices going up. Some people believe in biotechnology so they buy biotech companies. Investors are not the optimizing automatons that economists think they are.

Additionally, not everyone has the same valuation of returns on a single asset. Not everyone has the same investment horizon. Sometimes people sell securities because they need money. Sometimes people buy securities because have extra money to invest.

Perhaps the biggest problem with the efficient market hypothesis is that there will be no way to beat the market on a return/risk basis because arbitraguers would close the gap.

However, what economists forget is the shear size of the markets. How many billions will it take to close a merger arbitrage, push the spread together on two bond instruments, for mutua funds to adjust their portfolios after a news announcements?

If markets were truely efficient, markets would not exist. Noone would have a compulsion to trade.
 
CFTC deals with Futures Trading they cannot ignore the use of TA among professionals so the debate is not really about TA efficiency they just took the academical pretext to impose new regulations to forbid expansion of independant TA analysts and TA softwares. If their law had passed even a software publisher couldn't release a piece of TA software without fees and bureaucratic procedures. But they lost the Justice Court declared that it was anticonstitutional because if an analyst cannot express his free opinion about the market the judge and the accused sites said it was against their freedom of speech. This freedom of speech could also be imposed for Internet forum so that you couldn't express yourself.
 
Quote from dbphoenix:




There are also traders who claim to find great success using astrology.
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Please name one with a home in Vail even 2000 sq ft. (ok, 1000 sq ft)



:p
 
Quote from eragasa:

I think the biggest things the economists get wrong is that market trend towards an equilibrium value given a sufficient amount of time.

Economists also forget the human factor that is involved in buying/selling instruments. People may buy MSFT because they like the software, people may buy XOM because they see oil prices going up. Some people believe in biotechnology so they buy biotech companies. Investors are not the optimizing automatons that economists think they are.

Additionally, not everyone has the same valuation of returns on a single asset. Not everyone has the same investment horizon. Sometimes people sell securities because they need money. Sometimes people buy securities because have extra money to invest.

Perhaps the biggest problem with the efficient market hypothesis is that there will be no way to beat the market on a return/risk basis because arbitraguers would close the gap.

However, what economists forget is the shear size of the markets. How many billions will it take to close a merger arbitrage, push the spread together on two bond instruments, for mutua funds to adjust their portfolios after a news announcements?

If markets were truely efficient, markets would not exist. Noone would have a compulsion to trade.
More...

I think we all know that markets are HEAVILY INEFFICIENT! But I think the other point is how can you arbitrage or make money out of that inefficiencies? And that's not such an obvious answer.

So, I think academics CONFUSED between the difficulty of figuring out a nonlinear chaotic process like the market with just white noise RANDOMNESS! Yes, it's difficult. But it's not purely random.

But for 95% of the people it might as well be random, because their trading are WORST than random! haha. Read William Eckhart of MktWzd. Yep, so on the surface it looks very random.

But upon deeper inspection I think it's far from random. There are plenty of pockets of inefficiencies that one can exploit.

And that in itself is not even the entire part of trading. There's risk mgmt, money mgmt, position sizing, and PSYCHOLOGY. And improvement in these areas can increase your odds at beating this seemingly random game!

-99
 
Quote from harrytrader:

CFTC deals with Futures Trading they cannot ignore the use of TA among professionals so the debate is not really about TA efficiency they just took the academical pretext to impose new regulations to forbid expansion of independant TA analysts and TA softwares. If their law had passed even a software publisher couldn't release a piece of TA software without fees and bureaucratic procedures. But they lost the Justice Court declared that it was anticonstitutional because if an analyst cannot express his free opinion about the market the judge and the accused sites said it was against their freedom of speech. This freedom of speech could also be imposed for Internet forum so that you couldn't express yourself.
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Is censoring our thoughts the next step?

Aren't the numerous risk disclosures enough to warn (scare) the public about the risks involved in futures trading without calling TA fraud?

Oh, I forgot, the Gov't has the power to do anything it wants. I think not. Public opinion and the vote are a moth'a!
 
Not every participant in the marketplace is rational, informed, even-tempered or smart. I remember well the images of panic stricken Arabs bidding the price of gold up to nearly $700 per ounce back in the early 80's, while I sold my flute as bullion.

Fear and greed, they say, move markets. I think those two words leave something out of the equation, but they'll do for now.

The most basic TA indicator is PRICE. The second is VOLUME. Give me only those two and I will go to work.

Price is a condensation of the fear and greed out there. Volume tells you how prevalent.

What more do you need?

Let those pompous, sanctimonious intellectuals believe what they want. Don't argue with them. Their beliefs give me another edge!
 
Holy Cow! 15 pages already!

Well, I think the CFTC's argument against T/A could also be made with the National Weather Service computer models, but they still use them. Are the markets efficient? Sometimes. Does T/A work? Sometimes it does. Sometimes the markets ARE random. My biggest beef with the efficient market crowd is that they assume everyone will react the same to all news, i.e postive news; buy, negative news; sell. It just doesn't work that way. In fact, if you really think about it, if people did react the same to all postive/negative news, T/A would pobably work beautifully. But the real proof is in the pudding...where are all the sucessful "efficient market" traders?
 
Quote from dbphoenix:



They trade only four times a year.
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Yeah ... They also have the largest drawdowns in the industry ... And simetimes the drawdown isn't just a drawdown...

:D
 
after reading the legal opinion posted, it appears it is regarding false advertising--not TA. can someone point me to the opinion on TA ??

thanks !

surfer:)
 
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