Sister doji Those things are only observable after the fact. Sure, it looks easy on a chart of past price action. ( charts are by definition the past.). But, you know this, I use to be one of you--/ here's evidence http://www.elitetrader.com/vb/showthread.php?threadid=257473. Lol!
Can you offer a single TA-based trading plan that fails to work when an objective test (a set of specific rules based on research demonstrating a statistical edge) is applied? If you can't, then I'll conclude there is no such evidence. If you can, please include a description of the "setup" (chart pattern and contextual filters), the rule for how to enter, and the plan for managing risk and taking profit, so we can run the objective test. No argument there. The question I asked you was "...what, specifically, would constitute proof to you that a trader, trading a single futures contract (to ensure there's no average-down opportunity), can in fact be consistently profitable applying one or more of the following standard technical price action concepts..." The concepts I listed are applied at the hard right edge, not after the fact. For example, I have a fixed set of rules for entering a strong trend on a pullback in a smaller time frame. Yesterday's strong trend day in crude oil offered multiple appearances of the pattern I look for in the context I require to keep my risk:reward ratio equal to or better than 1:1. My fixed set of rules and filters could be applied many times throughout the day and during any strong trending intraday move, and the end result is net profitability. None of this is "after the fact". So what I asked you for is a fixed set of rules for one of those standard TA-based concepts where, if we were to apply the rules to every appearance of the defined setup (pattern/context), we would lose money over time.
Thanks for the valiant effort sister doji. However, I remain an unconverted 98% technical chart heathen--- but look on the bright side for your church--- I'll admit there may be some benefite for some traders some of the time during some conditions in certain economic cycles with charts hence my 2% belief level. Have a great weekend! surf PS-- I provided a smidgeon of guidance to your son over on LinkedIn... Remember, my TA opinion is never personal, some of my favorite people are technical analysts. We see eye to eye on most everything else.
Thanks for these words, Surf, but I must say that's exactly why you cannot also trust many academics who did certain researches and concluded TA "doesn't work". It clearly doesn't... in a way they test it, because they lack necessary inputs. Problem with me as a guru is I don't sell anything. My problem with my "gurus" is they also never sold me anything, never asked or even hinted they would like any sort of material compensation for their help. Being psychologist and having experience of counseling people I can see why some "gurus" charge the money for their lessons, after all there are many business coaches who charge the money too and some cooperate with top corporations/businessmen who unlikely would fall in the trap of some scams. But trading related I am not much interested in providing paid educational services. Too much work for too low compensation, just trading own and friends' money is much more rewarding and less stressful. That's a great attitude, I also try to never "just believe". That's why I asked you to prove me wrong if you with all your experience of interaction with top market players see flaws in my logic. Always appreciate criticism, because it may expose where I actually am wrong and correct me.
The bottom line is I can't argue against your personal experience. No matter what--- All the best and have a wonderful weekend! surf
Have a good weekend too, Surf (sunny but frosty Saturday already started here on our side of the big ball ). P. S. We can argue just about anything, it would only improve quality of discussion, which is always a pleasure to do in constructive and intelligent way.
It's funny how some people can't wrap their head around this; that these "academics" have only began to scratch the surface of testing TA.
Many people blindly adore whatever "official science" claims and forget that's just people after all. Mistakes in scientific world are as often as anywhere else. Sometimes only being a part of "scientific world" gives immunity against this blind trust to whatever "science" says.
<iframe width="560" height="315" src="http://www.youtube.com/embed/_8aes1pZP3Y" frameborder="0" allowfullscreen></iframe> TheBeautifulAndTheDamned
Many search and never find what they are looking for and so conclude it doesn't exist - just like surf saying trends don't exist and TA can't be shown to be profitable. Others use different inputs and find evidence that TA is a powerful way to beat the markets. There are many scientific papers that support this but surf ignores them when I and others post them because it doesn't agree with his hypothesis. I think a true investigator will sit up and pay attention when the Research Division of the Federal Reserve states.... "Abstract: This article introduces the subject of technical analysis in the foreign exchange market, with emphasis on its importance for questions of market efficiency. âTechniciansâ view their craft, the study of price patterns, as exploiting tradersâ psychological regularities. The literature on technical analysis has established that simple technical trading rules on dollar exchange rates provided 15 years of positive, risk-adjusted returns during the 1970s and 80s before those returns were extinguished. More recently, more complex and less studied rules have produced more modest returns for a similar length of time." The "more complex and less studied rules" are what many are trying to explain in this thread as the key to beating the markets while surf harps back to a primitive from of TA from a bygone era. As the Fed Research Div correctly states, what worked great in TA in the past may not work now at all, but that doesn't mean TA is dead! In fact those who have developed the less studied rules consistently beat the market. The paper concludes "A proliferation of behavioral models can reproduce the trending seen in foreign exchange markets and show that technical trading can be consistently profitable in certain circumstances. The adaptive market hypothesis provides a promising framework in which such models can be further developed. Its emphasis on behavioral decision rules that depart from the standard rational paradigm, and on learning and evolutionary selection mechanisms, indicates a shift in focus in currency market research and, indeed, in financial markets in general." http://www.core.ucl.ac.be/~laurent/pdf/Survey_handbook.pdf "such models can be further developed" and have been by many TA traders.