What to do if Technical voodoo doesnt work

[genevaroth]

I have been reading the book practical speculation by victor niederhoffer and he states that almost all- save for the VIX indicator (stocks only) are useless.

Ok, so if they are (which there are lots of successful technical traders and many, many more that are not.) no good indicators how do you trade FOREX? and how do run the tests myself to see what is good or bad besides backtesting in say metatrader?

I have a copy of matlab and mathematica and a real desire to learn- but where do you start with this? options and dervitives have modules but what about forex?

or should I just tell vic to stuff a gann fan up his a**?

 

[showyouwang]

Personally I wouldn't listen to him cause he lost millions thinking that selling naked options gave him an edge.

Pretty dangerous selling puts even in a bull market where there can be volatile corrections.

 

[DT-waw]

listen to him for christ sakes!
selling naked options is the best. its a no losing strategy, apart from the market crashes , which are just bad luck and they are not a managers fault.
so after your account is down to zero from 955 winning trades, you should trust your manager again and give him fresh $

technical trading doesnt work, well with exception of Winton or QIM where it made some 5+ billions.

 

[Hook N. Sinker]

Quote from genevaroth:

I have a copy of matlab and mathematica and a real desire to learn

You might obtain some historic rate data and test out some ideas. For example, what happens if you enter when exchange rate is 3 % less than average value and exit when rate is 3 % greater than average value?

 

[wrbtrader]

Quote from genevaroth:

I have been reading the book practical speculation by victor niederhoffer and he states that almost all- save for the VIX indicator (stocks only) are useless...

I recommend you read other books involving both sides of the coin if this is a great decision you need to make...use TA or not use TA.

Mark

 

[Martinghoul]

If technical voodoo doesn't work, you're gonna have to use your brain...

 

[hfoptimizer]

Quote from genevaroth:
I have been reading the book practical speculation by victor niederhoffer and he states that almost all- save for the VIX indicator (stocks only) are useless.

This is true. Here is why:

There are thousands of experienced and very hard working traders and software strategy developers chewing through every form of TA you can imagine on 1000s of markets. TA is the first thing that gets tested in an algorithmic strategy because TA is intuitive and most discretionary traders use it as part of their decision process.

TA can be very successful. I know this because I incorporated several TA concepts into a strategy I designed that turned a little unknown hedge fund into one of the most popular and closely-watched hedge funds in the world. TA can also be a useless diversion. I know this from seeing the years spent by good engineers and software people try to extract strategies from TA and fail miserably.

Those who trade TA successfully generally employ a lot more intuition, deeper analysis, contextual analysis or a well-honed strategy. Or the are willing or able to tolerate greater or more frequent drawdowns because they do good money/risk management. TA is only one small part of profitable trading.

 

[ElectricSavant]

I know a trader that doubles his money each month from TA. I recently have gone live with a system that does this. The reason it took me 6 months to go live was that I did not believe it was possible.

I have been believing many things to later find out that they were not true.

hfoptimizer, what you post is that little voice in my head. I know I am gambling.

ES

Quote from hfoptimizer:

This is true. Here is why:

There are thousands of experienced and very hard working traders and software strategy developers chewing through every form of TA you can imagine on 1000s of markets. TA is the first thing that gets tested in an algorithmic strategy because TA is intuitive and most discretionary traders use it as part of their decision process.

TA can be very successful. I know this because I incorporated several TA concepts into a strategy I designed that turned a little unknown hedge fund into one of the most popular and closely-watched hedge funds in the world. TA can also be a useless diversion. I know this from seeing the years spent by good engineers and software people try to extract strategies from TA and fail miserably.

Those who trade TA successfully generally employ a lot more intuition, deeper analysis, contextual analysis or a well-honed strategy. Or the are willing or able to tolerate greater or more frequent drawdowns because they do good money/risk management. TA is only one small part of profitable trading.

 

[jnbadger]

Quote from ElectricSavant:

I know a trader that doubles his money each month from TA. I recently have gone live with a system that does this. The reason it took me 6 months to go live was that I did not believe it was possible.

Not at all impossible. Scalability is another issue.

 

[logic_man]

Quote from hfoptimizer:

Those who trade TA successfully generally employ a lot more intuition, deeper analysis, contextual analysis or a well-honed strategy. Or the are willing or able to tolerate greater or more frequent drawdowns because they do good money/risk management. TA is only one small part of profitable trading.

Any type of trading strategy has to be designed as a test of a hypothesis, with repeatability built in to the way the hypothesis is framed. Whether the hypothesis being tested involves TA or not is less relevant than setting up the problem correctly.

I can attest to the "intuition" element. One day I finally reversed the typical question traders ask, i.e. 'what will the market do next?' and turned it into 'what won't the market do next?'. Sure enough, that led me down a more fruitful path than any TA ever had and taught me that what isn't on the chart can be as important as what is.