here we go again xD. please read the conclusion part again. here is a summary of the most important parts: "...According to a large group of financial market participants calle 'technical analysts', such patterns (head and shoulders) precede trend reversals and can be used profitably as a trading signal. We find that trading on the pattern in the manner recommended by technical analysts is profitable for the mark and the yen, but not for four other currencies (all vis-a-vis the vs dollar). We also find, however, that head-and-shoulders trading is dominated by simple technical trading rules, that are readely available. That is, once one incorporates information from the simpler rules, additional information provided by head-and-shoulders patterns is of no value in predicting the mark or the yen. Thus, the continued reliance on the head-and-shoulders pattern appears to represent a source of predictable exchange-rate forecast errors." i did never ever looked for research that proofs TA wrong. i first started trading based on TA, i read dozenz of books on that. i have a digital library with hundreds of TA books. how come that i could never make money from that information provided? i then started searching the academic side and soon looked at the authors of TA books, everybody selling books, brokers promoting them, chart vendors promoting them. they promote because they make money from the order flow. the more you trade, the more they earn. the more you lose, the more you look for the next hot stuff (order flow, footprint chart ...) please, don't tell me about Jack Schwager. in his recent book one of the guys, market wizards, is Peter L Brandt, the technical analyst mastermind. i followed Peter on twitter for a long time to learn from him. do you what this retard does? he makes predictions, when he fails he deletes his tweet, draws new patterns and makes new predictions. do you know how much money Linda Raschke charges for her trading room? i backtested several strategies from her books and could not find an edge. i could also share some stats on that. LOL -> Linda Raschke writes this on her website: https://lindaraschke.net/lindaanddamontrade/ "Damon and I have over 80 years combined experience in professional trading. ..." how come that one can combine experiences to a sum? if i and my girlfriend ( i don't have one yet, maybe i should quit looking for trading edge and find a girlfriend) watch a movie that lasts 2 hours, did we watch 4 hour in total? what the fuck is wrong with her logical thinking? These guys are "Market wizardz" yeah, the last decade was a fucking bull market the world never saw in stock market history. if you would hold the S&P ETF you would outperform 90% of hedge fund managers.
Technical Analysis is a windsock, not a crystal ball. TA can not predict where price will go. It can only identify high probability set ups. Go with the flow. Have a stop in place for when you are wrong.
what the heck are you talking about mate? "TA can not predict where price will go. It can only identify high probability set ups." what the fuck does this sentence mean? if you can use TA to find high probability setups than you make your call based on that -> TA. why do you use TA to find high probablity setups if you can not make predictions with what you use? how do you know that you are wrong? let me guess, it is based on previous price action aka TA?
One of the studies I posted did. Regardless, I'm not an advocate of that particular approach. I was just countering the OPs claim that countless studies show TA is not profitable with countless studies showing there is some merit to TA. FWIW, I do not myself utilize chart patterns per se, nor am I an advocate of so called 'price action', so I'm not going to spend any more time defending or debating that, but my view is still that it's perfectly possible to be profitable trading off charts alone. Obviously there's much more to be understood about the markets than can be seen in charts alone. I know this because I happen to have a custom built statistical model which gives me useful information I would not be able to find in charts by themselves. But it's still obvious to me that it's perfectly possible to be profitable from charts alone, so I don't get why you want to waste any more time arguing that point.
Well, this is kind of what I've been saying all along. Those who have something of value generally keep their mouth shut while those who have something which may seem to have value just can't keep their mouth shut and love to 'teach'. And since the typical amateur doesn't know any better he thinks he's learning something and that if he just studies a bit harder he will eventually arrive. It's just how it is in this business and it makes it incredibly hard for an industry outsider to get anywhere on his own. You don't learn anything from reading 100s of books. If you were to learn anything, you would have had to seriously study them, back-test the claims and use that as inspiration to create something of your own. I don't think you've done that...? I also had about 100 trading books and sold all but a few of them a few years ago. Nothing much to find there, to be honest. That's kind of disappointing. To be honest, Peter didn't really strike me as a wizard and I felt he was of a completely different caliber than most other traders featured in that book. That latest book was probably the weakest one, but still a lot of admirable traders featured there. One of the interesting things about those books is the wide range of approaches utilized. Some actually use classical TA. At least to some degree. Others absolutely don't. That's funny. LOL. I always had the impression that Linda was the real deal and what I've read from her in the older Market Wizards was good stuff. Curious. What's your story and angle here? Did you invest a ton of time into this without getting the results you wanted and have now given up and vent on ET? Or are you still trying? I don't think you or anyone else will ever get anywhere as long as you're followers or book readers or trading room subscribers. Trading is really about mastering yourself and mastering the markets. This means studying and interacting with the markets. Doing research. Asking questions. Answering them. Testing. Failing. Testing. Takes a lot of time. But that's what's required. No shortcuts.
I think we can agree that one can nowadays find claims and counterclaims for any hypothesis. Fwiw, there is a lot more published research that did not find much value in technical analysis than contrary to those that publish research in support of TA. I want to be careful here because TA is a vast area and it needs to be well defined when debating it. Hence my having stayed away from this discussion. So far I only chimed in regarding chart analysis. But what surprises me is that self proclaimed engineers or computer science engineers who seemingly take a very scientific approach to life and work make claims like "But it's still obvious to me that it's perfectly possible to be profitable from charts alone" into the face of facts that those who understand markets the best have debunked the value of charts for prediction purposes a long time ago. Such utterances like your latter comment are completely contradictory to a scientific and logical approach to life. Those who know best, who have traded the longest, who trade the most volume, who generate on average the most profit resort chart analysis to wasted time. Why would an engineer or CS major like yours not lend credence to those professionals? That's a mystery to me. It's like claiming an alternative medication works when all researchers and medical professionals resorted that alternative medication to being completely ineffective, similar to a placebo. Anyone who still claims that such placebo like medication works for them are stubbornly stupid by the very same definition. At this point the only sensible conclusion is that those who contradict established research and findings by professionals just don't know better and are perhaps conspiracy theorists or even worse, clueless and low iq human beings.