Why does TA not work (for you)?

[Xspurt]

Quote from TheBlackHand:

Of course they analyse the data, but they do so with valid statistical techniques. They dont go drawing magic patterns and lines all over the place, looking at false break outs, applying RSI studies and other nonsense do they.

(Lord give me strength!!)

of course not - they are limited by their understanding.

Want to know how good statistics are? Take a look at the intraday prediction of the analysts on the economic calendar and see how far they are out almost every time. There's tons of them everyday and the results are great for a laugh.

Lord give him wisdom as well as strength

 

[wrbtrader]

Quote from TheBlackHand:

...So, dont you think that if TA had any quantifiable value, some bright spark would apply the TA theories to this other information?

I can see the boardroom at Ford Motor Company now - looking at their quarterly sales chart: "Hey fellas, we've got a head and shoulders top here, and MACD has turned over - looks like were gunna sell less autos next quarter - better lay off the work force", OR will they perhaps ramp up marketing, lower prices and get us to buy more cars - putting the chart back in an uptrend? Unless the causes are fundamental - in which case that can be seen in GDP and other economic figures, just as well as a chart.

All a chart is good for is seeing if price is going in 1 of 3 directions - oh and for taking money off others who use it for anything else.

You decide....

Many businesses, including Ford, use TA models based upon business cycles along with other things. Therefore, you're correct, they aren't sitting in a board talking about MACD, H & S patterns. In contrast, they do sit in a board room talking about business cycles, product price analysis, sales projections/models, prediction models, tops & bottoms...line charts, histograms, bar charts, candlestick charts...

All merged with a lot of fundamental analysis and many other different types of analysis (e.g. economic, environmental).

My point is that they do use TA but are not using it via the perspective of a trader. In contrast, they are using it via the perspective of business. More importantly, they aren't using it alone nor debating its usefulness.

A few months back, my sister decided to hire a marketing firm for her successful day care business of many years because she wants to expand from her current 3 locations. At one particular meeting, the marketing firm showed her bar & line charts with predictions (ooops...meant projections) of her income and many other business related data if she were to open day care in particular areas in comparison to opening the same day care facilities in other areas of the state.

Of course she doesn't call it TA and of course her business partners and her are using it as a tool with other business analysis to help them make a better decision.

It doesn't matter what you call it...its still TA. In fact, I can't wait to see all those voter projection charts, trend analysis projections or whatever they call them as we get close to the U.S. Presidential elections. Yeah, we know one thing, those TV networks, political websites aren't using words like H&S voter patterns, wedge breakouts, hammer pattern, cup & handle...

Call it sushi mama if they want. It's still TA.

 

[TheBlackHand]

Quote from Xspurt:

of course not - they are limited by their understanding.

Want to know how good statistics are? Take a look at the intraday prediction of the analysts on the economic calendar and see how far they are out almost every time. There's tons of them everyday and the results are great for a laugh.

Lord give him wisdom as well as strength

Thats a good point.

So if we know 'scientific' statistical analysis is of little use, and TA is too ambiguous to be used by those in industry, could we say that the only real useful tool for analysing dynamic data is the bell curve and SD's?

Please be careful how you answer. Were getting near Bollinger Bands and Id hate to say they may be of some use as they are in the TA camp!!!

 

[marketsurfer]

I surmise that even the TA church will admit that TA is not predictive, right?


If its not predictive, as the high priests of the TA church have said time and time again.

Then

What purpose does it serve? other than for illustration and math inept artists who live in a fantasy world of real time finance?


surf

 

[TheBlackHand]

Quote from wrbtrader:

Many businesses, including Ford, use TA models based upon business cycles along with other things. Therefore, you're correct, they aren't sitting in a board talking about MACD, H & S patterns. In contrast, they do sit in a board room talking about business cycles, product price analysis, sales projections/models, prediction models, tops & bottoms...line charts, histograms, bar charts, candlestick charts...

All merged with a lot of fundamental analysis and many other different types of analysis (e.g. economic, environmental).

My point is that they do use TA but aren't sitting around calling it TA nor using it via the perspective of a trader. In contrast, they are using it via the perspective of business. More importantly, they aren't using it alone nor debating its usefulness.

A few months back, my sister decided to hire a marketing firm for her successful day care business of many years because she wants to expand from her current 3 locations. At one particular meeting, the marketing firm showed her bar & line charts with predictions (ooops...meant projections) of her income and many other business related data if she were to open day care in particular areas in comparison to opening the same day care facilities in other areas of the state.

Of course she doesn't call it TA and of course her business partners and her are using it as a tool with other business analysis to help them make a better decision.

It doesn't matter what you call it...its still TA. In fact, I can't wait to see all those voter projection charts, trend analysis projections or whatever they call them. Yeah, we know one thing, those TV networks, political websites ey aren't using words like H&S voter patterns, wedge breakouts, hammer pattern, cup & handle...

Call it sushi mama if you want. It's still TA.

Sorry, I think youre trying to redefine the situation to suit your argument.

Nice try!

You seem to be calling ANY type of data analysis Technical Analysis.

That isnt so.

Linear regression and correlation are statistical methods used on data (market data or crime statistics), but it's not really technical analysis is it?

Technical Analysis for the purpose of this debate is magic lines, magic patters, oscillators and the like.

If you enlarge the definition of Technical Analysis to include just about any type of analysis, then its a meaningless exercise. Where will you draw the line? Fundamental analysis? You can use Linear regression on past NFP numbers too. Hey! Lets put FA in the TA bucket too! Cant lose then!!!...

Nice try....

 

[wrbtrader]

Quote from TheBlackHand:

Sorry, I think youre trying to redefine the situation to suit your argument.

Nice try!

You seem to be calling ANY type of data analysis Technical Analysis.

That isnt so.

Linear regression and correlation are statistical methods used on data (market data or crime statistics), but it's not really technical analysis is it?

Technical Analysis for the purpose of this debate is magic lines, magic patters, oscillators and the like.

If you enlarge the definition of Technical Analysis to include just about any type of analysis, then its a meaningless exercise. Where will you draw the line? Fundamental analysis? You can use Linear regression on past NFP numbers too. Hey! Lets put FA in the TA bucket too! Cant lose then!!!...

Nice try....

My point, as soon as you start using chart analysis to make predictions (ooops...meant projections) based upon historical data...you're using technical analysis.

I myself can not put on a trade without chart analysis (I use charts) although I am fully aware that there are successful traders out there that do not use charts.

Those that do not use charts...you can call your trading anything you want.

P.S. I don't use TA alone nor do I use indicators. TA is just a tool in my trading plan. If you want to debate magic...I can't help you there but a nice try in pretending TA is only about magic.

P.S.S. The thread topic by the OP is for those that say bad TA does not work is to post charts to show it not working although I do understand that others in this thread have started their own topics including myself (e.g. don't pretend profitable traders using TA are using it alone).

Quote from Xspurt:

...The whole point of this thread was not to prove TA works, but to prove bad TA won't work...

 

[marketsurfer]

Quote from wrbtrader:

My point, as soon as you start using chart analysis to make predictions (ooops...meant projections) based upon historical data...you're using technical analysis.

I myself can not put on a trade without chart analysis (I use charts) although I am fully aware that there are successful traders out there that do not use charts.

Those that do not use charts...you can call your trading anything you want.

P.S. I don't use TA alone nor do I use indicators. TA is just a tool in my trading plan. If you want to debate magic...I can't help you there but a nice try in pretending TA is only about magic.

P.S.S. The thread topic by the OP is for those that say bad TA does not work is to post charts to show it not working although I do understand that others in this thread has started their own topics including myself.

\\

post charts to prove TA doesn't work-- LOL !!

This is equivalent logic to a fundamentalist telling you to check the holy book to disprove itself. ridiculous.

 

[Xspurt]

Quote from TheBlackHand:

Thats a good point.

So if we know 'scientific' statistical analysis is of little use, and TA is too ambiguous to be used by those in industry, could we say that the only real useful tool for analysing dynamic data is the bell curve and SD's?

Please be careful how you answer. Were getting near Bollinger Bands and Id hate to say they may be of some use as they are in the TA camp!!!

Now let's be real about this: It is obvious fundamentals can be great at predicting future trends but it can also be quite useless. The failures don't invalidate the method but are more likely to point to the failure of the analyst to discover something critical.

It is the same problem with TA. If your TA is at Surf's level then all TA will appear the same.

If TA is ambiguous you might want to consider why by reading my other thread.

As soon as an industrialist talks about future trends he is using a form of analysis. You can represent that trend on a graph and as soon as you do so you can call that moving average or critical path by whatever name you like. You can see it whatever way you want but that analyst and I will both point to momentum driving the market in a trend.

 

[marketsurfer]

Quote from Xspurt:

Now let's be real about this: It is obvious fundamentals can be great at predicting future trends but it can also be quite useless. The failures don't invalidate the method but are more likely to point to the failure of the analyst to discover something critical.

It is the same problem with TA. If your TA is at Surf's level then all TA will appear the same.

If TA is ambiguous you might want to consider why by reading my other thread.

As soon as an industrialist talks about future trends he is using a form of analysis. You can represent that trend on a graph and as soon as you do so you can call that moving average or critical path by whatever name you like. You can see it whatever way you want but that analyst and I will both point to momentum driving the market in a trend.

The bottom line is TA does not increase the odds that any entry will be profitable in a consistent and quantifiable manner. Since it doesn't, what use does it serve? Attracting noobs is a function of TA with FX dealers. It's quite effective, apparently.

 

[Xspurt]

Quote from marketsurfer:

\\

post charts to prove TA doesn't work-- LOL !!

This is equivalent logic to a fundamentalist telling you to check the holy book to disprove itself. ridiculous.

Hang on Surf - you are the one who claimed to use TA for years in days gone by. This is like a priest saying he is now an atheist. Did your TA never work? Were you just beating your brains out for years or did your TA stop working? If so when did TA fail you?

Show me your non working TA. Let me see the skills by which you judge TA to fail. I am not arguing whether you have discovered a better holy grail. I am saying by your own admission you jumped ship.

Either you never had a working TA method by which you have no ability to judge TA, or you have great TA skills but that level of TA proves TA doesn't work. Show us what you were doing on TA that doesn't work now and I'll believe you know what you are talking about.