I prefer statistical analysis over technical analysis.
What is TA?
- Thread starter kut2k2
- Start date
OK, I may as well end this now.
Here's a correct definition of TA:
Technical analysis is any method for generating trading signals, said method being based solely on past and present price data and/or volume data of a security.
Astrology is not a part of TA because star charts are data outside of prices and volumes.
As the wiki article illustrates, anybody who takes multiple paragraphs to describe something that can be described in a single sentence doesn't really know what he's talking about.
Here's a correct definition of TA:
Technical analysis is any method for generating trading signals, said method being based solely on past and present price data and/or volume data of a security.
Astrology is not a part of TA because star charts are data outside of prices and volumes.
Correct except for the word "optimal". Optimality is not a requirement of TA.
Discretionary is not a requirement of TA, and the purpose of the analysis is unspecified.
The relationship of current price to previous prices is known as correlation, not as TA.
Forecasting for what purpose? And any mention of the past without also mentioning the present is insufficient.
And my point is, we should read those definitions actively. Just because there are a lot of definitions, that doesn't mean we have to accept all of them, especially when they conflict or are obviously incomplete.
As the wiki article illustrates, anybody who takes multiple paragraphs to describe something that can be described in a single sentence doesn't really know what he's talking about.
My point is this again, everybody has their own definition and walking around telling others that their definition or TA is incorrect. This is the reason for the constant ongoing debates and will continue to be so...traders do not or have difficulty to accept definitions, interpretations, application of others. Each person telling the other its obviously incorrect.
That's why there's infinite number of methods and applications out there which is silly when you hear/read someone say...I've tested it all.
Never heard the astrology connection nor did I read such in this thread by someone as a definition. Yet, I have heard someone talk about "moon cycles" here once at ET.
P.S. Isn't it funny that those that do use TA...seem to not agree on the definition of TA. Simply, this is not just an issue that those against TA are having a problem with.
Technical means in any challenging field of learning you have to spend a few years in study to justify using the term.
Analysis mean that only after years of learning can you begin to understand deeper applications that less diligent technicians miss.
TA must not be confused with BA. BA is Basher Analysis when BA's claim to have an understanding of TA but when I ask them to show me how, in their personal experience TA fails... funny enough no one can show me such a chart. This fear of posting is well founded because a BA knows a TA will spot the kindergarten level TA in 2 seconds.
All the BA's freak at the prospect so that after 350 pages of running in circles no one can show they have ever found TA to be a failure. All we get is counter claims and with zero evidence which confirms very high levels of BA.
WARNING: if you are a BA don't feed BA into a computer to back test it unless you understand the above. It is not the computer that is generating the clever answers, it is the bright spark that thought some simple coding run through a computer would obviate the years of experimenting and study required in any field to understand and master a very challenging subject.
A HELPFUL ILLUSTRATION: There are only 12 musical notes yet permutations and combinations of these 12 notes mean there is an infinite variety of melodies as we witness over centuries of composing.
TA has not 12 but rather hundreds of inputs for TA's to make use of with the result 100 successful TA's could easily have completely different techniques. The way BA's see TA would be like saying there is one music group and one song.
Mathematically there is more hope of a PC composing Mozart than a BA using a back test to prove TA doesn't work.
Analysis mean that only after years of learning can you begin to understand deeper applications that less diligent technicians miss.
TA must not be confused with BA. BA is Basher Analysis when BA's claim to have an understanding of TA but when I ask them to show me how, in their personal experience TA fails... funny enough no one can show me such a chart. This fear of posting is well founded because a BA knows a TA will spot the kindergarten level TA in 2 seconds.
All the BA's freak at the prospect so that after 350 pages of running in circles no one can show they have ever found TA to be a failure. All we get is counter claims and with zero evidence which confirms very high levels of BA.
WARNING: if you are a BA don't feed BA into a computer to back test it unless you understand the above. It is not the computer that is generating the clever answers, it is the bright spark that thought some simple coding run through a computer would obviate the years of experimenting and study required in any field to understand and master a very challenging subject.
A HELPFUL ILLUSTRATION: There are only 12 musical notes yet permutations and combinations of these 12 notes mean there is an infinite variety of melodies as we witness over centuries of composing.
TA has not 12 but rather hundreds of inputs for TA's to make use of with the result 100 successful TA's could easily have completely different techniques. The way BA's see TA would be like saying there is one music group and one song.
Mathematically there is more hope of a PC composing Mozart than a BA using a back test to prove TA doesn't work.
Well TA was around for a few centuries before QA so that is not entirely true. But having worked with a quant, if I had the math and coding ability I would sure combine the two.
He said I was light years ahead of his professors, but I sure wish I could do what he does as well as what I do. Each method requires years of study and to get a top job you need to be close on the top 10 quant uni's.
There are quants and quants just as there are many different levels of TA ability.
Funny enough when I was introduced to TA close on 30 yrs back it was described as a means of quantifying the probability of success of failure in a trade.
In that time I have seen many ideas have their day and disappear in an instant. I think quants are vulnerable to tax and regulatory changes that can kill it overnight. TA will be here for ever.
I've seen countless number of charts of TA failures that were posted by TA bashers in other threads, other forums and elsewhere online. I've also seen TA bashers comment about TA failures in charts posted by TA users...more often than not this is their preferred method of debating TA via attacking charts posted by TA users.
Why they didn't want to do the same in your thread...I do not know but I suspect its the same reason why nobody wants to post consistent charts every day in your thread to show good TA.
There are also countless of academia articles showing some TA does work and countless of academia articles showing some TA working. Yet, I've notice the TA is different from one another, trade management after entry different from one another and so on. The flaw with all of the testing regardless to the result is that profitable traders do not use TA alone...they are using it with other important variables.
Simply, why bother testing one ingredient of a pizza to determine if a pizza is good or bad when there's other important ingredients on the pizza that together determines if its good or bad.
I think that's the reason why TA is tested all by itself even though its not how profitable traders use it...its because of the countless number of TA users that discuss only TA and nothing else involved in their trading plan as if those other things are not important or don't exist.
Sorry, that conclusion is incorrect - at least it does not follow from your TA definition.
Astrology does not use star charts, it uses only date, time, and location. So you could as well say that date, time, and location can not be used in TA. If you followed that line of argument, mathematics and statistics could not be used either.
A correct definition is: TA is an algorithmic method for predicting price data.
"Algorithmic" means that the method can be completely described with a finite algorithm. Intuition, psychic readings, or analyzing the news can not be part of TA. But other data than price or volume - for instance, quote frequency, or the NYSE opening and closing time - is used in TA.