Why Technical Trading Signals Stopped Working

Here is a quote about this from Gary Phillips, a guy that knows futures...

"...markets have changed. given the near extinction of retail participation, and the almost total dominance of professional and algorithmic trading, it is unlikely that the biases and readily "available" cognitive reference points that are the hallmark of the retail trader, still exert their influence on pricing today. more than ever, the market is predisposed to preying on unsophisticated traders..."

The guy knows a lot about the history of futures trading so he can explain it.
 
Real Money said:
Here is a quote about this from Gary Phillips, a guy that knows futures...

"...markets have changed. given the near extinction of retail participation, and the almost total dominance of professional and algorithmic trading, it is unlikely that the biases and readily "available" cognitive reference points that are the hallmark of the retail trader, still exert their influence on pricing today. more than ever, the market is predisposed to preying on unsophisticated traders..."

The guy knows a lot about the history of futures trading so he can explain it.
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Yes, agree, I'm seeing more and more situations on a daily basis on stock prices, of immediately reversing on strong moves. Breakouts collapsing time and again, only to recover several days later.
Strong moves are met with strong reversals, it seems that markets have taken a much shorter time frame mentality.
 
themickey said:
Yes, agree, I'm seeing more and more situations on a daily basis on stock prices, of immediately reversing on strong moves. Breakouts collapsing time and again, only to recover several days later.
Strong moves are met with strong reversals, it seems that markets have taken a much shorter time frame mentality.
More...
If only there were a way to insure against these price swings -- and maybe measure this market jumpiness, too. Someone should invent a financial insurance product by which you could save yourself from price jumps (of the things you wish to buy) and wicked drops (of the things you wish to sell). And *those* people could take the risk. THAT would be wonderful. :thumbsup:

But the 'strong moves' thing.....? That would be completely different, I guess. The financial insurance people imagined above would have something to say about it, for sure. Maybe they could measure the jumpiness relative to past jumpiness -- make it a ratio, you know? But you'd have to square it and take the root, or all the jumps would add to zero, right? Yeah. How do you get the actual range? The *true* range? Hard. But if you could do that, and get a bunch, you could find their average number -- that would be useful.

I'll bet the financial insurance people are working on this 'jumpiness' question right now -- that, if they can come up with an insurance product, they will price that jumpiness right into their contract. I'll bet you anything.
 
themickey said:
Yes, agree, I'm seeing more and more situations on a daily basis on stock prices, of immediately reversing on strong moves. Breakouts collapsing time and again, only to recover several days later.
Strong moves are met with strong reversals, it seems that markets have taken a much shorter time frame mentality.
More...
bingo
 
Zodiac4u said:
You are correct if you are just making a statement, it would seam that i did just that. But there are plenty of indicators that do show an overbought or oversold areas. If you believe in them they will work until they don't:confused:. When you follow indicators as much as I have, you will find the one or two that work best for you. Some work better on high volume and specific times and others just plain suck. Sorry about the confusion.
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I was making a blanket statement (not just indicators) which point to OB/OS levels/conditions.

Markets continuously go higher/down lower when they are so-called OB/OS. How can that be?

An example stock goes up, becomes "over-bought". More buy, does it now become "over over-bought"? Often a mania along the lines of the dot-bomb era takes place. Stock now becomes "over over over-bought" I suppose?

Stocks top out and go down once there is a lack of buyers (and vice versa lack of sellers at bottoms). If you believe that, as I do, again how can that be if it was just "over-bought" at the top or "over-sold" at the bottom?
 
SunTrader said:
I was making a blanket statement (not just indicators) which point to OB/OS levels/conditions.

Markets continuously go higher/down lower when they are so-called OB/OS. How can that be?

An example stock goes up, becomes "over-bought". More buy, does it now become "over over-bought"? Often a mania along the lines of the dot-bomb era takes place. Stock now becomes "over over over-bought" I suppose?

Stocks top out and go down once there is a lack of buyers (and vice versa lack of sellers at bottoms). If you believe that, as I do, again how can that be if it was just "over-bought" at the top or "over-sold" at the bottom?
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Sorry I don't put too much thought into these type of ideas. Way to much conflict when it comes to thinking this way, at least for me there is. I'm strictly short term. Cheers.:thumbsup:
 
Zodiac4u said:
Sorry I don't put too much thought into these type of ideas. Way to much conflict when it comes to thinking this way, at least for me there is. I'm strictly short term. Cheers.:thumbsup:
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So in other words you believe that so-called OB/OS levels show when a market is OB/OS?

If so how do you explain markets going higher (or vice versa lower) when they are OB/OS?

And sometimes much much higher (vice versa much much lower)?

You do understand the limitations of indicators that are range limited to the 0 - 100 spectrum?

Also this discussion, which you seem to want to end fair enough, has nothing to do with short or long term.

"Cheers"
 
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