You really should stop ending your posts with 'lol'. It makes you come across as a condescending douche. If you want to troll these boards, fine, keep what you're doing. But if you actually want a productive and civil discussion where you actually convince people to change their views, consider dropping that 'lol' on every post you make. As for Jason Shapiro, he's featured in Market Wizards and his track record is verified by Jack Schwager and looks pretty good to me. Yes, he uses COT data which is lagging, but also other data on positioning. Anyway, I'm not going to spend time defending the guy as I don't really know that much about him and am not paying for his services, but I saw you mention positioning in your newsletter and in relation to this thread it's interesting as it's another data point beyond merely looking at a price chart. Maybe. From what I've picked up he hasn't made any trades in index futures this year, but had a play in copper and a few currencies. I think he's a low frequency trader. Maybe similar in that sense to James B. Rogers, Jr. who surprisingly was one of the best interviews in Market Wizards when I re-read that book earlier this year:
I'm reading a lot of gobblygook BS here! Let me add some! If you are good at TA then you you are good at predicting the future. Patters repeat themselves. Patterns in nature, patterns in stocks. Every stock has a history and you can use that to your advantage. How and when to use TA-- That is the trick. Entry points / Exit points. If you have a buy and hold strategy I'm not sure what TA will aid to that. If your only edge is TA... you will not succeed. Why? Investing is a contrarians game. Always has been always will be. Can you be contrarian using TA only?... I don't think so, you become a trend follower whether you want to or not. You could say oh Money Flow has fallen way off and MACD has turned down RS is too high this baby is about to go down.... In a way that is contrarian. But you want to be able to stand on your own feet and think for yourself. You want to me able to take in the entirety of the market not just a handful of stocks. The market is full of moods. Read the mood correctly and you don't need TA at all. So my advice is get yourself a more rounded strategy and keep your ear to the ground... Use TA as a tool not as a religion. When the market is euphoric your charts will be as well.. but the really smart trader/ investor knows how to fade euphoria... ~si
Solid post. Unless you're in the fortunate position of being able to consistently copy a great trader, there's no way you can succeed in this game without doing your own due diligence and accumulating your own experience. Regarding euphoria, that's also a great point. I definitely think we've been seeing that over the last year or two - to the point where some newcomers honestly believed that this market would never even correct lower. And I'm sure even a few of the old timers started believing it, too. Yet here we are. They could have studied euphoric periods of the past and seen how those ended, but unless you lived through it, it's just intellectual knowledge. The same thing with corrections or crashes. Unless you actually traded through them, you don't really know. I have a favorite quote I keep mentioning which goes along the lines of how there's just no substitute for experience. And I think it's so true in all walks of life - trading most certainly being no exception.
Also preposterously inefficient beyond the typical HFT and retail daytrading timeframes. One only needs to look at the action over the past year.
Not strictly true. “TA” is basically momentum analysis and momentum is a real thing in markets, especially when driven by identifiable fundamental factor(s).
Schwager didn't verify much. He went by word of mouth. Many people approached him for the later books and he would interview at home (judgment based upon lifestyle) save for the HF-book which relied on public sources. COT is a joke; at least in the case if index futures. Then you backpedal that he uses other stuff. What does L&S gain by convincing you otherwise?
To answer this question. I will present an example: Over the past few trading sessions the Japanese and US stock markets have been tanking, while US Treasuries and the Yen have been soaring. Every single TA indicator ever created would confirm that. There are some fundamentals behind it but fundamental analysis won't tell you when the markets have stopped moving this way. But TA will.
Don't be foolish these are all factors captured by stochastic models nothing to do with your tea leaf reading equivalent b*******
Upon re-reading the Market Wizards series (didn't re-read the last one yet) my impression is that some of the trader's results are questionable and not even that impressive. Jack does claim to have verified Shapiro's track records over a long period and even say that they are unusual in that they are negatively correlated to stock, hedge fund, and CTA indexes, but I have not seen them myself, obviously. So who knows. I didn't backpedal. I supplemented information. I've seen Shapiro use CTA positioning and I'm sure I saw a few other reports as well, but yes, the COT seems to make up the bulk of his approach. Why is the COT report a joke for index futures? I've just been casually watching his videos now and then and like I said I don't think he's done any plays on index futures this year, but, I skimmed his Market Wizards interview now and it does seem like he's using or have used COT data for index futures as well. As for L&S it's his choice to participate in discussion on these boards. I don't think he has anything more to gain or lose than anyone else here. But I do think if anyone wants to get anywhere in a discussion it's better to give a proper answer than just a 'lol'. I don't even know who the guy is beyond whispers that he's a hedge fund manager. Some people here are serious about improving and learning. Not every thread needs to turn into a flamewar or condecension.