They didn't divulge the "truth". They only said they use TA. The "truth" would be their specific application of it.
Just for fun, here is my introduction to convoluted logic... Hey, using your approach of throwing out evidence as lie and making up stuff, how about this proof?: TA works but most profitable traders LIE about it because they don't want the rest of us know just how well it works and how easy it is to make money with TA. So denying it is just smokes and mirrors. How does that sound? P.S.: By the way they didn't explain in detail how they use it so there was absolutely no harm acknowledging it in the interviews. Oh I am sorry, is that too much common sense for you? I only believe in stuffs from anonymus posters that I read on forums. Oh wait...
Absolutely. The odds are stacked in your favor using charts and some technical analysis. Do you get misleading signals at times? Sure, however over time S/R, trendlines, and one or two oscillators give a trader a good indication where an instrument is headed. At least, you are not going to convince me it does not work. In my view, you would have to be a financial alchemist to trade otherwise.
Kind'uv reminds me of an interview that CNBC was doing with a particular successful money manager that made a comment that TA was hogwash even though in the background you could see that the monitors of many traders at his firm... They all had charts via bloomberg on their monitors. Regardless whether they believe TA works or not. These guys can't make their next trade (day trade, swing trade or position trade) without using a chart to make an analysis, opinion or decision nor will they ever admit to using technical analysis (chart analysis) for such. Take a close look at the posting history of ET most well known bashers (e.g. Traderzones, cgargia, daal, The_Expert, goldboy and many others)...they admit to doing chart analysis but will say it's either for illustration purposes only or that it has no impact on their decisions or that it's not TA depending upon whom they've been debating with. Now ask them to give an example of such a chart analysis...they won't and we all know why. TA is very important in my trading but so is a lot of other stuff in my trading plan (e.g. money management, market experience, discipline, position size management, proper capitalization, proper trader workstation et cetera). Therefore, you aren't going to see me doing any bashing of TA with charts on my monitors in the background while giving an interview on a major TV financial network. :eek: That's a quick doorway into "loss of credibility". Mark
WRB: It gets even better. Wants to become a client. So much for 'old crop, new crop' or 'ethanol distillation demands on the 2011 grain crop'? Honestly, you are going to see most fundamentals like seasonality or weather on a chart - how you may ask? Price is price. Price reveals all. The saying is true that 'Price is the distillation of all know information about the valuation of an instrument' (I paraphrase, something to that effect). Case study: Just look at the Heating Oil or RBOB Gasoline Crack Spread price charts overlayed on top of the weekly DOE/API crude oil reports. It's all there. That is a commodity that is all about market fundamentals. Bottom Line HINT: TA guys who are willing to give up a little bit of range in exchange for market confirmation are already on the correct bias side of the fundamentals whether they realize it or not. That's all. No need to make it any more complicated than that.
Goldboy, I will hold my hands up and say that there is a smidgen of truth in what you say with regard to institutional traders deceiving and manipulating price. However, not all exchange traded instruments are being manipulated at all times on all time frames. Indeed if there is price manipulation occurring then it is likely to trump any technical analysis, as does any major news event, still leaving you with a 50/50 chance of being right (the old coin flip). Moreover with good market knowledge and awareness of the players in that market and their usual tactics, etc. etc. I'm sure you get the gist. A robust, tested technical approach, will be correct a percentage of the time ENOUGH to give the trader AN EDGE, coupled with (as we've agreed; discipline, money management, correct position sizing, etc.) In fact what you propose is a healthy view of TA, you are less likely then to experience emotional conflict in exiting losing trades. I think maybe even expecting a POTENTIAL loser every-time you put on a trade is a healthy attitude as far as your money management is concerned.
Random number generators will never create anything that looks like a TA chart. A generator that increments randomly with +\- 1 will create something that strongly resembles a chart but relatively fast scrutiny shows that something is decidedly wrong and the wrong factor is the absence of obvious human decision input. In my quest to verify the self organising chaos that I perceive the mass markets to be I have tried dozens of different ways to prove and disprove TA. Some has been quite amusing and one in particular was when a friend sent me a data overlay (indicator) based on planetary activity. It looked good on daily data but looked equally as good on 5 minute data which rather deflated his hopes and wasn't helped when I stated that a pure sine wave would do equally as well (badly). IMO TA does work and can work extraordinarily well but only when married to the structure in development. Using a one size fits all approach as back testers do is a recipe for massive disappointment. If TA is considered to be non functioning and quite obviously random walk cannot be at work what is left?. Obviously markets are organised or everybody would lose so we are left, possibly, with what does the really big money want. They turn markets, accumulate, feed moves, resist opposite moves, distribute (take profits), allow a blow off head or tail and then rinse and repeat to carry out the process all over again. TA shows that activity and to my eyes there is nothing random about it at all.
there is a lot of truth in this. I would add, to study TA is usefull MAINLY to know where most trading drones will place their buys and sells and avoid those spots....
Exactly, precisely. None of this has anything to do with textbook TA or other nonsenses. Why not work on understanding why these entities participate in the way you describe and how they must operate to take a profit? Learn also how the herd are misdirected, startled, and otherwise manipulated into doing what the big money needs them to. None of this is "TA". Unless you call anything involving price series data "TA". Work out the participants first, then apply the logic to the information the market generates, not the other way around. Nothing could be further from the truth. Rubbish. Nobody rational puts on a trade with an expectation that it will be a loser. Self doubt and resigning yourself to the inevitability of making incorrect decisions is not the answer. This also has nothing to do with money management. Money management means making sure that you are not wiped in the unlikely event you get it wrong. It does not mean you expect to get it wrong, or you accept that you are potentially wrong before entering a trade. If you have unresolved doubts before putting on a position, and you put it on anyway then you are gambling.
Redneck or TE: As far as $1.10, -.37, .14 What do these tell you exactly? I get the range........that's easy. -.37 tells you the sellers won the battle yesterday? What good is the gap though? How is that important?