What's the difference between technical analysis and quantitative analysis?

[Kovacs]

I have a vague idea but would appreciate more input.

 

[OddTrader]

Quote from Kovacs:

... vague ...

I think that should be right.

 

[annaland]

"In the financial industry, there are three main approaches to investment: the
fundamental approach, where strategies are based on fundamental economic
principles, the technical analysis approach, where strategies are based on past
prices behavior, and the mathematical approach where strategies are based on
mathematical models and studies. The main advantage of technical analysis is
that it avoids model specification, and thus calibration problems, misspecifi-
cation risks, etc. On the other hand, technical analysis techniques have limited
theoretical justifications, and therefore no one can assert that they are riskless,
or even efficient."

 

[Kovacs]

Quote from annaland:

"In the financial industry, there are three main approaches to investment: the
fundamental approach, where strategies are based on fundamental economic
principles, the technical analysis approach, where strategies are based on past
prices behavior, and the mathematical approach where strategies are based on
mathematical models and studies. The main advantage of technical analysis is
that it avoids model specification, and thus calibration problems, misspecifi-
cation risks, etc. On the other hand, technical analysis techniques have limited
theoretical justifications, and therefore no one can assert that they are riskless,
or even efficient."

Aren't the mathematical models based on statistics which are based on past price behavior?

 

[OddTrader]

Quote from annaland:

"... On the other hand, technical analysis techniques have limited
theoretical justifications, and therefore no one can assert that they are riskless,
or even efficient."

Which one does?

 

[annaland]

Quote from Kovacs:

Aren't the mathematical models based on statistics which are based on past price behavior?

As I understand, mathematical models allow you to find arbitrage and value derivatives fairly. They explain the pricing of securities which allows you to see if the security is undervalued or overvalued. They are also used for forecasting future prices and most models incorporate risk. Technical indicators are less complicated but can still be useful.

 

[george_s]

Technical analysis is a specific kind of quantitative analysis mainly based on charts. But quantitative analysis also includes other types of analysis- correlations, regression analysis, combining fundamental analysis with technical analysis etc.

 

[Riskmanager]

Three econometricians went out hunting, and came across a large deer. The
first econometrician fired, but missed, by a metre to the left. The second
econometrician fired, but also missed, by a metre to the right. The third
econometrician didn't fire, but shouted in triumph, "We got it! We got it!"

 

[nononsense]

The supply of naive lambs is without limits.

 

[murray t turtle]

Quote from Riskmanager:

Three econometricians went out hunting, and came across a large deer. The
first econometrician fired, but missed, by a metre to the left. The second
econometrician fired, but also missed, by a metre to the right. The third
econometrician didn't fire, but shouted in triumph, "We got it! We got it!"

============
Risk- manager hit the target, even if one measures in yards[36''];
have plenty of ammo, plenty of time if possible, to score