A world where the Efficient Market Hypothesis is strongly real is a world without the

Discussion in 'Economics' started by JasonRhee, May 16, 2007.

  1. The cycles in the markets can be complex but, usually, they can be handled quite simply.

    Most of trading is counterintuitive as has been shown.

    I stick with what the market dictates and most of the time three concurrent cycles are being integrated as a simple consequence of the trading population's combined influences.

    The "natural cycle of the equities instruments is the easiest to quantitfy and qualify by the use of related math. I prefer the base 2 for most analysis since it lends itself most readily to non probabalistic mathematics. I use algebra mostly.

    Cycles can be expressed in base 10 algebra most easily as power series or periodic functions. I prefer periodic functions and three terms are sufficient for most cases.

    I treat turning points as either odd or even harmonics and get appropriate signals accordingly. As mentioned above by others, none of this stuff works since TA doesn't have any value for trading to make money.

    There is a kind of caveat here since those who hold that view also find my results to be unbeliable and astounding.

    Thus, I use stuff that doesn't work to get unbelievable and astounding results.

    Naturally, I sit in a different seat than those who have these views. Making money is real to me and speculating whether what I do to make it and whether it works it simply humor of some sort for me.

    The basic requirement to get math to work in making money comes down to using the math in a way tht absolutely tells you what the market is saying to you.

    Inventing is not a good idea. Obeying what the market says you must do is very very important and there is no alternative.

    The topics you mention are inventions that have been applied to the markets. This is not a good idea.

    Using base 2 to get values from the market on the variables of the market is a practical and good idea. I have posted one of several of these over many years.

    You get three questions answered by doing this.

    The evaluation of the cycle tells you where you are, what is next and how fast the cycle is changing.

    For a person to suggest to me that this TA does not work is funny.

    What more could a person want to know about an instrument as a basic beginning point.

    Naturally, I switch to base 10 when I am dealing with turning points, since I am in the markets all the time and I NEED to have the market TELL me when to change sides, accurately.

    So I turn to harmonic analysis to see what harmonic is in control, then I go back to the simplicity of base 2 to monitor the many elements of the turn.

    The harmony of the periodic function descriptors (amplitude, frequency and phase angle) fit right in to the decision making factors related to trading to make money.

    When you look at the early papers on the viability TA (1970's), you see periodic functions in very strong evidence. Lo (1999) in particular, around the turn of this century, emphasized the most obvious periodic functions in turning point formations. He worked with what the market gave him and he did not invent something to apply to the markets.

    Lately Lo, et al have turned to behavioral finance studies which emphasize the characteristics of people who can or cannot use TA. Here in ET we see the results, behaviorally.

    I think the people who say TA doesn't work are funny. Those who are being funny to me, show the three findings of Lo, et al (2005): fear, anxiety and anger.
     
    #21     May 18, 2007