Yes, I am sure, because there is book about him published. And of course quantitative trading is much more than just visual patters. But of any indicator or any measurement you can make or create a visual pattern too. So that is a definition thing more. The lines are fluent here. Your topic is about whole TA and not only some certain patterns. That is why I answered it this way.
%% I WONDER if he loved math even with out patterns, like candlecharts or mountain\valley charts?? H& Shoulders alone = too subjective. Sure sounds like he loved math + math numbers; he worked as a code breaker+ MIT math teacher. IF i could not have candlecharts, i would find another line of work. Barcharts are > than plain numbers. I read somewhere else/ it took him 10 years to make good money.
Technicals are price, volume, positioning, sentiment, etc., which are typically measured quantitatively or via a chart to assess momentum or mean reversion. I think that’s okay, and there’s some basis for that (momentum anomaly, cointegration between price and volume, the way large orders are distributed as a % of adv, option positioning pinning to round numbers, etc.). What’s stupid is to stop your analysis there or to base a trade on a pattern you believe is forming. The “chartist” or “I only look at price + technical indicators” approach is dumb and I doubt you’ll find people who make excess returns from it. But I mean hey good for your broker lol.
How do you measure cointegration with price and volume (I guess it is on the same symbol or ?) ? Could you make an example here please as I am only aware of cointegration between two time series (close prices) ?
Log chg of both. This a well known phenomenon and is widely documented in academic literature. However, general rules are not so great at timing. Hence, technicals can be useful but not sufficient. If you see a stock rally without volume you should ask “what are the catalysts that would drive investors to this stock”?
So when it is not so great for timing do you say the sharpe ratios are significant lower trading cointegration between price and volume than trading prices of different symbols ?
What do you mean by that ? TWAP or VWAP ? Could you make an example ? Do you have kind of read or study for it too ?
No, I mean that just because volume is low doesn’t mean that a price won’t rally for days. If you make trading decisions off simple analysis, expect to get whiplashed.
You should read into market structure and how large investors trade. Generally, top of book liquidity is not great, which means investors trading in decent size need to be mindful of the Kyle limit and how their total order impacts price. Lots of public research on this & I work in the industry