agree with you on the concept of prudent risk management. But I cannot disagree more on your comments re probability. Everything in the market is about probabilities, exactly because what you said is true, inherently we all face uncertainty and there is no "always" or "never". But we can attach and attempt to fix probabilities to all possible outcomes. We will never reach perfection in measuring and estimating probabilities but we can do reasonably well. In fact whole branches of trading rely entirely on attaching probabilities to certain outcomes and factoring those into position taking and position sizing, e.g., options trading. I have great respect for Bruce Kovner, but I believe he has been misunderstood in this quote. Charts are just a visualization of prices. I believe what he wanted to say is that even with a fundamental approach one needs to also take into account the actual price of an asset before investing in it. I do not believe that he attached any particular importance to charts vs price levels.
I have no connections with any of the key outfits, either directly or indirectly, so I cannot claim to know how they operate. However, I'm surprised that some or any of them would have technical analysts who did nothing but analysis. I think people who actually trade already know what they are looking for; they already have their decision criteria. They wouldn't need a technical analyst any more than they would need someone to read them the newspaper. The people who employ TA in some form or other do so within the confines of their own decision criteria, context, risk profile and so on. I would think it's a very personal thing, specific to the trader and borne of much personal effort to arrive at a set of coherent rules by which to play the market. I cannot imagine that any serious trader would rely on copy-and-paste, generic TA. And I agree with Kovner who, as I noted above, said that there is much that is wrong and mumbo-jumbo about TA. But let's not throw the baby out with the bathwater.
If anything, even you should admit that the risk of being scammed on this website or any other retail trading related website by snake oil salesmen, that tout technical analysis related material , is higher than being scammed by anyone else.
Yep, agree 100%. Thank you for clarfying Kovner. These TA true believers will hang on and misinterpret every utterance from a succesful manager to their benefit. No wonder the market is so rich, yet the TA practioners are so poor--it is the inability to see reality. Hampton
you must be kidding right? Ok here is your example: Short when RSI(14) exceeds 70 and Long when Rsi(14) reaches 30. I show you that with ANY data point compression of your choice, with ANY stop loss level of your choice, with ANY take profit level of your choice this strategy more or less consistently loses money. Here is your example of something that consistently does not work and it is 100% TA based. Now its your turn, show a purely TA based approach that consistently works. By the way, I never equated price movement itself with TA. Why are you claiming I cannot read price movement just because I resort TA to hogwash? And please let's not start all over asking me to define TA, this has been done in hundreds of threads here, if you have issues understanding what it means simply do a search. Waiting for your example where TA consistently works.
so large shops and professional traders are not demanding accurate analysis that creates low risk, high reward trading ideas? I guess what you actually wanted to say is that professionals are not as easily conned.
FA done by the Security Analyst can tell the fund manager what to buy. But it cannot say when to buy. Only TA can do that. But for the individual, TA can do both.
funniest post of the entire thread so far. I am sure all Putnam, Fidelity, and other PMs heavily rely on their host of Technical Analysts to time their trades. I am out of here, I respect your world view though cannot disagree more. Hope everyone finds what they are looking for and, more importantly, where they are looking for.
So, now we see your problem. You refer to indicators. Well I think you will find that those of us who use TA as it was originally designed give no weight to indicators. So, rather than judge TA based on indicators, you may want to study and learn the TA that has been used for over 100 years and has stood the test of time. Then you should be able to determine if it is random or not.