TA - Objective or Psychological Skill?

This is actually the most enjoyable part of the discussion for me.

The experts prove in myriad ways that TA does not work.

What they can't prove, for obvious reasons, is that nobody makes money using TA.

In the absence of empirical evidence and pure logic, enter creative thinking.....

If you make money using TA, (fill in the blanks).

One of my favourite nobodies (who apparently made the odd buck) is Marty Schwartz.

http://www.curatedalpha.com/2011/curated-interview-with-marty-schwartz-from-market-wizards/

"Did you make a complete transition from fundamental to technical analysis?

Absolutely. I always laugh at people who say, “I’ve never met a rich technician.” I love that! It is such an arrogant, nonsensical response. I used fundamentals for nine years and got rich as a technician."

Of course we all know the answer to that is it can't be done nowadays, nothing that worked then works now.

Question: if you tested TA through the period Marty made money, until today, and the test consistently shows you can't make money using that method, and we know for a fact that Marty made money using that method, does that mean that the 'proof' it won't work today is invalid?

Sorry, forgot, Marty was just one of the billions of monkeys pounding away on keyboards who quite by chance wrote the complete works of Shakespeare. Or perhaps it was crowd sourced, as in a few monkeys came up with the material.

 

In all seriousness, isn't that guy from the 1970's early 1980's? What's he doing today? I can nearly certainly guarantee, it has nothing to do with TA in the way TA is thought of on this board-- price action and predicting the next move with enough accuracy to tilt a series of trades into profitability.

 

From my post;

Of course we all know the answer to that is it can't be done nowadays, nothing that worked then works now.

Question: if you tested TA through the period Marty made money, until today, and the test consistently shows you can't make money using that method, and we know for a fact that Marty made money using that method, does that mean that the 'proof' it won't work today is invalid?

Boringly predictable Surf. Go practise changing diapers.

 

No, it proves he wasn't telling the full truth or his understanding of TA is different than the price action traders of elite. Like Jem said--- he used TA to find stocks out of synch with the overall market ---- this use of TA for intra market analysis is a completely different thing than claiming it provides enough predictive power to tilt the odds into profitability over a series.

PS--- I have been practicing! Any day now....

 

If your definition of TA is using past price to predict future price, what's the difference?

As for tilting the odds, Marty did it a lot better than most.

 

Just curious-- the above statements seem contradictory. The first makes it seem the students are not successful, and the second seems to indicate the opposite.

could you clarify? thanks!

 

I believe that there are many different ways to profit in trading. Objective TA is one of them. Subjective TA is another. Combining the two is yet another. There are also many other ways to profit from trading.

With that said, I believe it is mostly of little value to try to convince a non TA believer otherwise. Doing so leads to them wanting proof, which leads to discussion of edge, or proof of this or that.. blah blah. I believe it's better to let a person remain in the dark, if they are not willing to pay the price, the price being sweat, blood, and tears. As someone once said, "Some things can not be taught. They can only be learned. "

 

NoDoji,

I would be interested in making an attempt at automating one of your setups ... PM me if you want to discuss further.

Cheers
D.

 

But if it makes money... what to do? Drop it?

 

I respectfully disagree, personally knowing people who copied some of patterns I recommended them and are on their way to consistency with the lapses mostly be in the area of discipline than technical side.