Why Do We Trade? For Real.

[marketsurfer]

Thanks for ignoring the important part of the message to focus on something to quickly dismiss. Unfortunately, you're missing the point here as well. A technical calculation doesn't have to be printed on a chart and reviewed by a human being. MACD is MACD whether it's on a chart or in an automated trading algorithm: it's still an indicator calculated based on past price movement alone, a.k.a. "technical analysis", which according to Investopedia "despite all the fancy and exotic tools it employs, really just studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future."

Back on quants, from the first hit I found: Investopedia


Time, price and volume are quantitative data. Another one: Michael Halls-Moore


As you can see, of the 4 types of systematic quant funds he mentions, half rely on price (and possibly volume) action through the past to place bets on the future. Maybe 3, depending on one's definition of "statistical arbitrage". Those are obviously the quants I was referring to.



Oh! I thought he merely reformed from technical analysis into running a small fund based on his "Price Drivers™"? My mistake. Well regardless, I gave him 4 opportunities to share his reasoning, without success. It would've been 3, but today's was too enticing to pass up.

Sure, hard core stats are applied to the market by quant funds. However, its nothing like using price action or TA to enter or exit trades by looking at charts . if it did, these folks could automate which they cant do.

 

[i am nobody]

I dont think you or any trader is an idiot. Its a very tough game and anyone who participates has my respect.

Sure, it works sometimes. Just like random entries ( like going long because the market is down) can work also.

But, heck, if it works for you and you are not making anything up, go for it!

surf

What disturbs me is that you categorically try to destroy everything about TA. I agree that daytrading and TA is very difficult, at least if you want to make consistently money. But like in any discipline, there are always people who can make money.
So the correct attitude would be to say: this is very difficult with a very high rate of failure. But do not say it does not work. People should be very careful and not have too high expectations, but that counts for everything in life.
In life almost nothing is black/white. In most things there is a wide range from dark grey till light grey.

 

[marketsurfer]

What disturbs me is that you categorically try to destroy everything about TA. I agree that daytrading and TA is very difficult, at least if you want to make consistently money. But like in any discipline, there are always people who can make money.
So the correct attitude would be to say: this is very difficult with a very high rate of failure. But do not say it does not work. People should be very careful and not have too high expectations, but that counts for everything in life.
In life almost nothing is black/white. In most things there is a wide range from dark grey till light grey.

In 25 years of study and knowing and speaking with traders all over the world--- I have never seen a day trading system ,based on TA work ,to any degree over time that would be considered an edge. Thats my reality. I believe you are fooling yourself if you are actually succesful using TA. at the very least unless all these claims are simple internet bravado.

 

[kut2k2]

“Why should we look to the past in order to prepare for the future? Because there is nowhere else to look.”
-- James Burke

According to surflogic, it is impossible for a hunter to use footprints (aka remnants of the past) to successfully track game (aka future targets). Of course, in reality, human hunters have used footprints and other trail sign (aka other remnants of the past) to successfully track game animals since prehistoric times, and before human hunters did it, animal hunters aka predators did it successfully as well. And both humans and predators are still successful today by using footprints and other remnants of the past to hunt.

But according to surflogic, this is all an illusion. Go figure.

 

[VPhantom]

However, its nothing like using price action or TA to enter or exit trades by looking at charts .

Again, your definition of "technical analysis" doesn't fit the mainstream, and you're confusing complexity with impossibility. Drawn manually or graphed automatically, if it's calculated based on a time series, it's technical analysis.

I'm not saying that Wyckoff's tape reading methods can be automated in full and successfully (maybe, but without proof I'd be guessing). I'm saying that some quant funds, by definition, automate "technical analysis", with some success, as I detailed credibly today. Don't mix up tape reading and technical analysis. That said, both do rely on price evolving over time to come to their trading decisions; the fact that automated technical analysis makes proving profitability easier than manual tape reading doesn't invalidate the latter, it only helps to demonstrate that price alone has some value in predicting its own probable future course, which goes against your simplification that "the past does not equal the future". Lots of black box algos currently in play likely contradict that sentiment.

There's no point arguing further when we don't even use the same vocabulary, and I double-checked mine to make sure I wasn't making rookie assumptions. I didn't know until today that you were actually selling investment advice instead of trading, much less based at least in part on technical analysis (which you despise, wtf?). Bummer.

In 25 years of study and knowing and speaking with traders all over the world--- I have never seen a day trading system ,based on TA work ,to any degree over time that would be considered an edge. Thats my reality.

Yup, yours which you force onto others by attacking everything that moves, but alas completely unsubstantiated. It's "trust me, I know".

 

[i am nobody]

In 25 years of study and knowing and speaking with traders all over the world--- I have never seen a day trading system ,based on TA work ,to any degree over time that would be considered an edge. Thats my reality. I believe you are fooling yourself if you are actually succesful using TA. at the very least unless all these claims are simple internet bravado.

The fact that you made a study over 25 years has no value at all. This study is your reality. Maybe this is simple internet bravado. You are fooling yourself. It is not because YOU did not see it that is does not exist.
I am not interested in showing results, by coincedence two trades can be checked:

1. I was short around the beginning of march in the ES (around 2110). This position has now a profit of about 56%, in less than 1 month, and has been almost from start in profit.
2. A EURO/JPY short trade in 2012 which I found now in my archives. Short Yen from just below 100 to over 135-136 in less than 2 years.

I have a very high rate of succesful trades, which is impossible with random signals.
I also see my account. I am very sure i am not fooling myself.
I survive already more than 20 years, although I must admit that the first years were very hard.

I promised myself that I will not start this discussion again anymore. So this was my last posting on TA working or not.
I think almost 50% of all posting on ET are related to Marketsurfer and TA. And the result? Zero. Waste of time and energy.

 

[marketsurfer]

Again, your definition of "technical analysis" doesn't fit the mainstream, and you're confusing complexity with impossibility. Drawn manually or graphed automatically, if it's calculated based on a time series, it's technical analysis.

I'm not saying that Wyckoff's tape reading methods can be automated in full and successfully (maybe, but without proof I'd be guessing). I'm saying that some quant funds, by definition, automate "technical analysis", with some success, as I detailed credibly today. Don't mix up tape reading and technical analysis. That said, both do rely on price evolving over time to come to their trading decisions; the fact that automated technical analysis makes proving profitability easier than manual tape reading doesn't invalidate the latter, it only helps to demonstrate that price alone has some value in predicting its own probable future course, which goes against your simplification that "the past does not equal the future". Lots of black box algos currently in play likely contradict that sentiment.

There's no point arguing further when we don't even use the same vocabulary, and I double-checked mine to make sure I wasn't making rookie assumptions. I didn't know until today that you were actually selling investment advice instead of trading, much less based at least in part on technical analysis (which you despise, wtf?). Bummer.



Yup, yours which you force onto others by attacking everything that moves, but alas completely unsubstantiated. It's "trust me, I know".

The funny thing is, Phantom is that you KNOW the truth. But you are hiding here and hoping that your beliefs become true. good luck to you. surf

 

[marketsurfer]

“Why should we look to the past in order to prepare for the future? Because there is nowhere else to look.”
-- James Burke

According to surflogic, it is impossible for a hunter to use footprints (aka remnants of the past) to successfully track game (aka future targets). Of course, in reality, human hunters have used footprints and other trail sign (aka other remnants of the past) to successfully track game animals since prehistoric times, and before human hunters did it, animal hunters aka predators did it successfully as well. And both humans and predators are still successful today by using footprints and other remnants of the past to hunt.

But according to surflogic, this is all an illusion. Go figure.

This is faulty logic. Animal tracks always lead to the animal. What market tracks always lead to profits? surf

 

[kut2k2]

This is faulty logic. Animal tracks always lead to the animal. What market tracks always lead to profits? surf

Trends. Duh! Have you been paying any attention at all?

Btw animal tracks don't always lead to the animal. If the animal is smart enough to backtrack or to enter a stream for a while, it can throw hunters off its trail. Not all hunts are successful, but enough are to keep hunters trying time and again.

Price is obviously not easy to hunt, but that doesn't mean the hunt is impossible nor the results merely random noise.

 

[VPhantom]

The funny thing is, Phantom is that you KNOW the truth. But you are hiding here and hoping that your beliefs become true.

I'm here for the occasional gem that I would otherwise miss, as part of my development process. It isn't the bulk of my time. I hold no beliefs when it comes to how complex markets operate, except that my understanding is incomplete by default, and will never be perfect, although it will eventually be sufficient for profit. Recognizing this limitation means that I'm not inclined to bash other people's models if they interpret markets differently than my own.