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

[Poljot]

Price represents supply and demand interplay in time which is economics, so TA falls under social sciences rather then physics.
The "law" of supply and demand exists in a social world.

But TA cannot be entirely separated from physics because:

1. It studies price movement through time and time is a physical dimension.
2. Price moves with arrow of time - future price depends on past price so there is a cause and a result (+/-randomness).
3. Price is related to caloric expense (labor) - you need to expend energy to acquire resources (stocks, commodities) at a given price. Higher price - more labor units required.

 

[snowman80]

That was in the past, before everyone and their uncle had analytics that were millions of times more powerful than anything Renaissance had back then. Given enough assets, any actual repeatable pattern can be detected and then trivially arbitraged into non-existence.

he’s stuck in the 80s

still using a Quotron

 

[Sprout]

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

Vectors have both direction and magnitude.

Cycles, periods, vibration, oscillation, inertia, momentum are all descriptions of observable phenomenon - many concepts can be applied to both domains of physics and trading.

Torque is probably one of the more difficult ones to map. I’d put pace at re-supply at limit in that category.

 

[tiddlywinks]

Torque is probably one of the more difficult ones to map. I’d put pace at re-supply at limit in that category.

Interesting representation. I think a code snippet named "twists and turns" is in there somewhere.

How's things @Sprout?

 

[oraclewizard77]

Here is something you could try that I did tonight. Use multiple different future contracts.

Pick a trade in one. If trade is going against you towards a stop level or standard deviation, either kill the trade or let it stop out, but don't average into a losing trade.

After being stopped out, look for another setup in a different future contract that you are following, if trade is going towards your target, don't kill the trade and let target be double your loss for the previous trade. However, it should still respect a possible resistance level and don't take a trade that is too close to a resistance level where you would not be able to achieve a double standard deviation reward vs risk.

What is the TA benefit of using this strategy? It allows you to have a 50% win rate and shows a positive expectancy while pissing off Noobs that think TA is not relevant because TA does not achieve 100% predictability.

 

[TimMykes]

I have a method thats so simple, even an ET member could understand it

Sadly, thats the very reason I must keep it a secret till my last breath

 

[Sprout]

Interesting representation. I think a code snippet named "twists and turns" is in there somewhere.

How's things @Sprout?

Hey @tiddlywinks !
Things are good. Been away from intraday trading and into swinging the crypto markets lately as I put a second floor on my house. It’s been fun but looking to get back to work! How have you been? Enjoying the recent volatility?

 

[murray t turtle]

Why do traders talk about trading as if it is about science and / or arts?

Demo trading is about rocket science / physics / chemistry / biology.
Live trading is about the arts / emotions plus some simple
maths like + and -.

Thank you.

%%
Good question;
most likely because some science + some art/elementary math may be involved...……………………………………………………………………………………………………………………………...IT'S not rocket science, but could get something from a man that wrote ''Rocket Science''
Actually I stiil enjoy reading a trading book with fractions/bid/ask spread...………………………………………..

 

[Trader Curt]

Since there are billions of possible combinations of indicators, levels, definitions of supply/demand/resistance/support, and every other type of voodoo, those "millions" are all trading different things. So, no, TA does not have any kind of relevance - at least not via this tired argument.

I wouldn't say that, maybe technicals have less relivence than fundamentals but they still have their place. If you use major indicators that most other gurus teach you when just beginning most of the time they work. However I also believe "when everyone is fearful be greedy and when greedy be fearful".

 

[BlueWaterSailor]

If you use major indicators that most other gurus teach you when just beginning most of the time they work.

In that case, you should have no problem proving that via a backtest. Post the results, please?

If any of them worked, then everyone would be a successful trader by following a simple cut-and-dried formula: 1) use major indicators, 2) retire in comfort. Perhaps you can explain why 95% of all traders blow out their accounts.

(Back when I first started, I ran backtests on all the major indicators - some 20 of them with a variety of parameters, if I recall. Only a couple of them resulted in a positive P&L over a 20-year span, and none of them produced a meaningful return. Not a single one came close to B&H on a major index.)