Once you learn the following you'll realize everything is mute: * Best evidence of anything with value is a long term profitable brokerage statement that's been verified. * It doesn't matter if its science or art so get over it. What matters is can it be useful or not. * TA or entry signals used by profitable traders are not the only tools profitable traders use. You seem to be approaching your debate as if TA is the ONLY thing that matters therefore lets ONLY TEST TA. Wrong approach to why TA is of value to profitable traders with verified trading records and wrong approach because to test the value of TA you MUST test all the other variables being used with TA. Simply, the market just doesn't work the way you TEST it. In addition, your testing of TA is similar to the approach in TA by losing traders... That's the flaw in your testing. Further, there are many variables involved in the markets and profitable trading. Thus, to single out one variable called TA because its a heavily marketable tool by data vendors is just a waste of time and energy. Simply, you seem to believe that if something has value or believe to have value... Lets test it by itself to determine its true worth. That's not a good scientific approach considering many well known things in science have value via synergistic relationships (e.g. drugs, genetics, chemistry, muscles and even traders collaborating)... Therefore, the value of TA involves its synergistic relationship with other aspects of trading. The simultaneous joint action of separate variables which, together, have greater total effect than the sum of their individual effects. That's the point profitable traders using TA are trying to get you to understand. Once again, stop trying to isolate a variable that profitable traders using TA within their trading plan. You'll be much better off via trying to determine and apply those other variables that profitable traders use that gives TA its value or vice versa. With that said, can you explain what scientific evidence you have when you said the following that trendlines and s/r levels have value. Mark
Quote from NihabaAshi: Once you learn the following you'll realize everything is mute: that is "moot" * Best evidence of anything with value is a long term profitable brokerage statement that's been verified. That is your opinion. Longterm brokerage statements do not effectively demo TA. they are mingled with money management, trader discretionary adjustments to trades such as to entries or exits, disruptive market events that may greatly favor or damage results, portfolio theory, etc. Further, a sample size of one has no bearing - EMH predicts that a few will do well longterm. Again, you are confusing opinions with effective, testable, repeatable, statistitical, scientific proof. best evidence is when a particular claimed effective method is dissected, in realtime. TA lovers keep shying away from this. The results of real-world TA studies is constantly disappointing. If they showed promise, I would be the first one on board. But they do not. * It doesn't matter if its science or art so get over it. never said anything about this What matters is can it be useful or not. That is the point, isn't it * TA or entry signals used by profitable traders are not the only tools profitable traders use. And that is what invalidated your brokerage statements, as I said above. You seem to be approaching your debate as if TA is the ONLY thing that matters therefore lets ONLY TEST TA. Incorrect. Wrong approach to why TA is of value to profitable traders with verified trading records and wrong approach because to test the value of TA you MUST test all the other variables being used with TA. Simply, the market just doesn't work the way you TEST it. In addition, your testing of TA is similar to the approach in TA by losing traders... That's the flaw in your testing. Further, there are many variables involved in the markets and profitable trading. Your unsubstantiated opinion Thus, to single out one variable called TA because its a heavily marketable tool by data vendors is just a waste of time and energy. Simply, you seem to believe that if something has value or believe to have value... Lets test it by itself to determine its true worth. That's not a good scientific approach considering many well known things in science have value via synergistic relationships (e.g. drugs, genetics, chemistry, muscles and even traders collaborating)... Therefore, the value of TA involves its synergistic relationship with other aspects of trading. The simultaneous joint action of separate variables which, together, have greater total effect than the sum of their individual effects. That's the point profitable traders using TA are trying to get you to understand. Once again, stop trying to isolate a variable that profitable traders using TA within their trading plan. If something has value, it should have some outperformance capability. There are two kinds of variables: The dependent variables are those that are observed to change in response to the independent variables. The independent variables are those that are deliberately manipulated to invoke a change in the dependent variables. In short, "if x is given, then y occurs", where x represents the independent variables and y represents the dependent variables. Otherwise, you are espousing voodoo. "They don't work on their own, but when you mix them in the right proportions, i can turn lead into gold." Each time you say these things, you sound more like the alchemist than an educated person. You'll be much better off via trying to determine and apply those other variables that profitable traders use that gives TA its value or vice versa. With that said, can you explain what scientific evidence you have when you said the following that trendlines and s/r levels have value. I believe I said they MAY have value. That was an opinion, and I didn't say I used them or had evidence in favor of them. Unlike many TA followers, I only use hard numbers, that satisfy reasonable statistical verification (if it doesn't show outperformance value on its own, I throw it away). And I did a lot of TA study before I threw it away. Interestingly, TA mythology seems to relate to "the behaviorial finance programme", explaining skepticism drawn by EMH, helping explain the human tendency to find and exploit patterns in data even where none exist. Some relevant examples of the Cognitive biases highlighted by the programme are: the Hindsight Bias; the Clustering illusion; the Overconfidence effect; the Observer-expectancy effect; the Gambler's fallacy; and the Illusion of control. I am in between the weak-to-strong forms of EMH.
I think any one with science background involving chemistry, medicine, biology would strongly disagree. I'll repeat, there are areas of science that in order to make something of value... They need to occur in specific quantity, right conditions (e.g. temperature) and sometimes in the right order (e.g. genetics). To isolate one thing and to TEST it to determine its value by itself is one thing. However, that's what you are doing and that is not how the market really works. Therefore, why are you so persistent in testing the markets that way. Further, I hope you don't approach your trading the way you approach your testing. Also, although you don't specifically say what marketsurfer saids about the comparison of science and art... Your testing approach states for fact you are approaching trading from a scientific view. Your continued debates about brokerage statements not being scientific evidence states for fact you are approacing trading from a scientific view. Once again, I and other profitable traders that use TA are not using TA alone. Therefore, if you want to learn the usefulness of TA you need to stand in the same shoes of a profitable trader. If you are able to do that, you'll see that TA is just one chapter in the book called Profitable Trading. Therefore, you cannot judge the merits of an entire book by one chapter only. That's exactly what you are doing via saying those traders that are profitable and have years of proof of profitability... There TA shall be tested along with ignoring everything else involved in their trading plan. That is not a scientific way to approach the merits of the usefulness of TA. Therefore, you should be doing what any other scientist does in his/her related field of study is to find out what are those other variables that makes this one particular variable (as in TA) useful, change et cetera. Remember those links many of use gave you in the past to investigate what profitable traders of TA are using to make their TA useful??? Here's the link again and you can go there and tell everyone that its just the opinion of one person as you have in many other threads except for the threads below...I wonder why???. http://www.elitetrader.com/vb/showthread.php?threadid=113193 http://www.elitetrader.com/vb/showthread.php?s=&threadid=83837 http://www.elitetrader.com/vb/showthread.php?s=&threadid=61514 http://www.elitetrader.com/vb/showthread.php?s=&threadid=50472 Go ahead...go to the first thread above and debate with them about the value of TA. With that said, imagine yourself being bitten by a rattlesnake and it injects its poison into your blood to result in either death, gangrene infections or chronic muscle problems. We all know the toxins are going to attack your nervous system, tissues, organs and other physiological systems et cetera via 100 - 200 different types of toxins depending upon the snake. Therefore, it can be assummed that poison is not good for your body. Ahhh...lets break poison down into its individual components (peptides) and you suddenly have medicine that's useful in treating many known illness, infections and/or diseases when combined with other variables (e.g. treatments of muscle tissue recovery in cardiac arrest, stroke, tumor control et cetera). Each peptide all by itself is not what they are being used as... They become useful when in combination what other types of voodoo as you call it. Luckily real scientists doesn't share your approach to scientific discovery. Profitable traders that find usefulness out of TA are using it in combo with other variables. You seem to prefer testing and/or applying approaches not being used by profitable traders. Maybe that's why you are stuck inside that illusion that TA is not of any value and those that say it has value is just an opinion of one person only (see brokerage statement links above to see its more than one person). P.S. My academic background is immunology and genetics although I've never worked in that field beyond my internships of Medical Research. I'll keep posting your past quote to show one contradiction out of many (others not worth mentioning). Mark
1. Generate a random walk curve in Excel (first make 1000 random numbers between -1 and 1, and then in the next column make a cumulative sum of all random numbers.) So - now you have a complete random curve which very much resembles a stock chart. Do you see any trends? YES Is it easy to draw trendlines? YES 2. Take a stock chart and draw a trendline. If your software permits, plot the chart in logarithmic scale. Can you draw the same trendline? NO Do you see other trendlines? YES Conclusion: Trendline = bullshit /Jossan
the theory that every ship at the bottom of the ocean had a chart so charts dont work went out in the late 70's,early 80's and have been used successfully before and since,check the date on the book your getting your opinion from,trendlines form a foundation to build upon or within and when they setup its the easiest method of trading there is,when they don't,don't trade
Trendlines are nothing but a ruler, a tool. Albeit an extremely powerful tool. Sometimes they hold, sometimes they break and many times they fake. See price behavior around them can be very telling in the game of supply and demand and this is where the real power can be found. When combined with support and resistance they paint the picture quite clearly. I'm sorry to say, if you don't find the merit in trendlines you are missing out on probably the best tool out there in trading. There is not a day that I trade without them. I rarely see a day where this tool does not enhance my charting skills. Possibly my trading co-pilot. Anek
<i>"Conclusion: Trendline = bullshit"</i> If and when you figure out why these trendlines were pure gold this afternoon, you'll change your opinion 180 degrees.
Anyone who thinks that trendlines work in isolation is out of their mind and should just hand over their money..... Bouncing off trendlines,taking out the trendline is utter nonsense,other than short term reflex action due to "technicians" scrambling about... Does that mean they have no predictive value???Correct?? Its codable and easily proven. I will add that concepts very similar to "trendline analysis" that are universal(not dependent on scaling) do have merit as part of ones trading arsenal,but that does not imply that trendlines in and of themselves have any predictive power.....
False....Its OBVIOUS why they were pure gold in those charts..If you like< I copuld come up with 100 technical indicators that echo your sentiments... Trendlines do NOT work..How YOU trade them is entirely different..
<i>"Trendlines do NOT work..How YOU trade them is entirely different.."</i> Every year, countless aspiring deer hunters each purchase a new gun. They have the desk clerk at that store where purchased "bore sight" the mounted gun scopes, making them accurate enough for the final zero-in sighting process. But, those newbie hunters don't have time to bother with final tuning of their scope sights, nor can they be bothered with spending some time at the gun range getting familiar with their tools. Nope, that would cut into their precious time sitting at the local bar, swapping lies and comparing notes on which waitress has the biggest tits. Who has idle time for making sure their guns are ready for live action? * Every year, experienced veteran hunters pick up their old, familiar firearms for the annual checking and rechecking of sights. When the opening bell arrives for season, those tools are effective in experienced hands. The newbie aspiring hunters who are still hungover from night before cannot hit any target if it hit them in the a** first. Meanwhile, the veteran hunters could take those exact-same guns which only need a little understanding to make them drive tacks at 100 yards. In other words, the guns do "work" ** The OP's definition of trendlines "work" had nothing to do with stand-alone coded system tools. If so, I missed that in reading the maiden post here. Aspiring traders who think only stuff that can be coded mechanically will "work" still have a good several years' worth of learning to do before they get where they need to be. Trendlines work like crazy, for those who know how to sight them in effectively. It has nothing to do with criss-cross channels, volume studies or exotic patterns. If you know how to sight them in, they'll kill any market every day. If you only have them rough-sighted in, you'll miss your targets by a country mile.