Why does TA not work (for you)?

something I just found googling around... somewhat relevant.

Technical analysis supposedly doesn’t work so fund managers employ semantic arbitrage and refer to it as pattern recognition instead. The seminal studies are correct: publicly disclosed technical indicators and “charting” methods are useless. However proprietary predictive black box models and artificial intelligence systems continue to perform outstandingly as many quantitative hedge funds have demonstrated over the long term.
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Quote from Laissez Faire:

I was not aware that I was invited? :)

I think it is better that you try to explain your point here. I`m always interested in learning, so I`m not being argumentative for the sake of being argumentative. I simply do not understand what it really is you are saying.

Thanks.
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No worries--- I guessed I might know you ---I like being challenged, but I have laid out my ideas on thus site since 2002-- when I was a true believer in TA untill today. Documenting my evolution as a trader--- I have a book coming out that will likely help answer questions-- but it's going to be bought. No more free meals! LOL!

Surf :D :cool:

PS: I'll post an invite to surf fest as soon as I nail down dates/ venues . It will be in NYC early next year-- during the trading expo...
 
Quote from contra:

surfer, what type of HFT are you speaking of when you're saying it's the best strategy ever?

Do you have any links to funds that use this or any info on what type of HFT they are doing and their performance over say a couple of years?

You have to take into account how much it costs to actually run those.
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Not only how much it costs to run them, but how much any asset can move in the amount of time they are holding and how much my fixed transaction costs amount to per share.

There are papers out there doing the math.

http://www.cxoadvisory.com/8565/technical-trading/how-much-can-high-frequency-traders-really-make/


It actually isn't that much money that can be made with HFT. Now, if you want to say "Well, that money is basically risk-free profit", fine, but someone needs to show their work on that calculation.

When all is said and done, I doubt that HFT is any more profitable than a profitable version of any other kind of trading. To call it "the greatest trading tactic ever" is pure hyperbole.
 
Quote from marketsurfer:

No worries--- I guessed I might know you ---I like being challenged, but I have laid out my ideas on thus site since 2002-- when I was a true believer in TA untill today. Documenting my evolution as a trader--- I have a book coming out that will likely help answer questions-- but it's going to be bought. No more free meals! LOL!

Surf :D :cool:

PS: I'll post an invite to surf fest as soon as I nail down dates/ venues . It will be in NYC early next year-- during the trading expo...
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I live in Norway, so the chances that you know me are slim and I would love to hear your answers since I probably will not be able to attend the Surf Fest (will be happy to receive an invite though).

Someone who does not know better, could be led to believe you are evading the questions that are asked. :)
 
Quote from R. Raskolnikov:

You were a true believer in TA before you had a consistent method??? No wonder your scars are so deep!
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Nah, I had my largest win ever while deeply immersed in TA work. I use to chart by hand prior to the Internet --LOL! I took several steps back and tried to view the market as a whole plus discovered who was really making consistent money in the markets. It wasn't the TA crowd--- hence the new information required a complete change of philosophy.

NO scars. Had my research found money was being made with TA consistently I would have remained a believer.
 
Quote from logic_man:

Not only how much it costs to run them, but how much any asset can move in the amount of time they are holding and how much my fixed transaction costs amount to per share.

There are papers out there doing the math.

http://www.cxoadvisory.com/8565/technical-trading/how-much-can-high-frequency-traders-really-make/


It actually isn't that much money that can be made with HFT. Now, if you want to say "Well, that money is basically risk-free profit", fine, but someone needs to show their work on that calculation.

When all is said and done, I doubt that HFT is any more profitable than a profitable version of any other kind of trading. To call it "the greatest trading tactic ever" is pure hyperbole.
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Got you... I think the performance may be great but when you bring in what they have to pay to keep there systems up to par and how much it does cost to run them... you know what im saying.

However, as a big fund, I think they make there money back on how much they can now charge clients for there "performance"

see here:

Medallion Fund employs high frequency trading and exploits inefficiencies in the stock market. One strategy they use takes advantage of the inefficiencies in the execution of large transactions. One of their algorithms determines whether a very large order is executed and front runs it. As a result Medallion experiences high transaction costs and high expenses. That's why they charge a 5% fixed fee. On top of that they charge performance fee. That fee had been 20%, but after 2000 it increased initially to 36% and then to 44%.
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I still believe we as human traders can find inefficiencies and have good feel for markets and make money.

but using straight up TA... probably wont get anyone far.
 
Quote from BSAM:

Could be both, or one or the other.
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With due respect it cant.
TA is the study of trade data in graphical form on a chart. PERIOD. Could be minute, volume, range, renko p&f bars etc. Dont matter.

Saying that T&S study is TA is balderdash. T&S study is T&S study. It isnt TA unless you place that same data on a chart. Then you can apply TA.

Is it no wonder the proponents have such difficulty defending their argument when they cant even define what they are trying to defend?????!!!!!!

Is it no wonder, that despite Surfs kind and noble efforts, you guys still dont get it?
 
My charts reveal to me all the real "price drivers", because the only truth in the market is price.

When you combine this with money management, it works.
 
Quote from marketsurfer:

thanks, I knew we were close to agreeing on something.

No, there are many ways-- but only a few have a real edge. Just because a trade wins, does not mean it has an edge. Just like a gambler on a winning streak-- he has no edge, but wins and wins again. You can win by looking at charts or price action-- but there is no QUANTIFIABLE edge there.

There may even be traders who use TA and intuition to trade that are succesful-- but then again, its not quantifiable therefore not of interest to me. Make sense?
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Great post!
 
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