Why do traders talk about TA as if it is physics ?

traderwald said:
Hi guys,

I read and watch videos about TA where traders explain it as if it follows the physics rules like it swings like a pendulum etc. Why is that ? I don't think there is any relation and quite a bit of distance from reliability of physics to the wide assumptions of TA.

Also, how can one say TA is useful when what we know is only about what is going on in the market (i.e. what those with money invested) are doing and nothing about what those outside are doing and how much money they have (or does it actually tell about where all the money is and how much there is ? even when it is outside they market)

Edit: I actually appreciate TA and do not think it is not useful. Only saying the above because when I look ta some of the TA explanations, it is on occasion as if they forgot this is not physics like in its reliability.

Thank you
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If I were you, I'd avoid anyone who spews such nonsense.

OTOH... TA is valuable and reveals some 100% correlations*... as well as lesser and still profitable correlations... which you can learn and trade.

*I like to say such things as it drives the TA haters/doubters out of their F'n minds! :)
 
I don't get caught up in others opinions or what they "know", when they often confuse that with what they "think". Big difference.

Something either works or it doesn't. Clearly traders have some big pretty edges, including some retail traders who use TA. I don't concern myself with what others think if it's akin to physics or not, or whatever.

If you want to trade and be consistently profitable just focus on finding things that work, that are repeatable and clearly defined with a position size that doesn't trigger your amygdala.
 
Have you seen a lot of rich scientists who studied the stockmarket and have conducted massive studies telling the public how they should trade the stockmarket? The purest form of information, untainted by anything is the stock price and thru the stock price, the price movements as depicted in stockcharts tell you the story of any stock and possible future direction of any stock. Now, nothing is 100% sure but, the big boys (hedge funds, mutual funds, brokers, banks) just follow the trend and make billions every single year. One top hedge fund manager once, remarked "I am just a trend following idiot." Count me among that group. And technical analysis works because it is not biased and fed with disinformation. Contrast that with this ET forum where so called, geniuses tell us what to believe and how we should do as they tell us and they know better?
 
panzerman said:
However, anything from the world of physics that is applied to finance is generally a misapplication of the physics
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Physicists as well as engineers believe that the skills necessary to be successful in their field are the same skills to be successful with TA. The market will show them they are wrong.
 
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Peter8519 said:
Quote from Oxford dictionary.
quantum mechanics - the branch of mechanics that deals with the mathematical description of the motion and interaction of subatomic particles, incorporating the concepts of quantization of energy, wave–particle duality, the uncertainty principle, and the correspondence principle.

Renaissance Technologies LLC employs physicists.
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Renaissance also bases it's signals off of "repeatable patterns" on the 5 minute charts. That's right, Renaissance and Jim Simons made their billions by day trading patterns off 5 minute charts. Of course there are many on ET who are smarter and more successful than Simons and his team :D
 
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speedo said:
Renaissance also bases it's signals off of "repeatable patterns" on the 5 minute charts. That's right, Renaissance and Jim Simons made their billions by day trading patterns off 5 minute charts. Of course there are many on ET who are smarter and more successful than Simons and his team :D
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How can you know unless you've worked there before
 
traider said:
How can you know unless you've worked there before
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Simons wondered if there might be a better way to parse their data
trove. Perhaps breaking the day up into finer segments might enable the
team to dissect intraday pricing information and unearth new, undetected
patterns. Laufer began splitting the day in half, then into quarters,
eventually deciding five-minute bars were the ideal way to carve things up.
Crucially, Straus now had access to improved computer-processing power,
making it easier for Laufer to compare small slices of historic data. Did the
188th five-minute bar in the cocoa-futures market regularly fall on days
investors got nervous, while bar 199 usually rebounded? Perhaps bar 50 in
the gold market saw strong buying on days investors worried about inflation
but bar 63 often showed weakness?
Laufer’s five-minute bars gave the team the ability to identify new
trends, oddities, and other phenomena, or, in their parlance, nonrandom
trading effects. Straus and others conducted tests to ensure they hadn’t
mined so deeply into their data that they had arrived at bogus trading
strategies, but many of the new signals seemed to hold up.
 
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