Technical Analysis and Common Sense

Discussion in 'Technical Analysis' started by rs7, Jul 26, 2002.

  1. no doubt about this!

    Technical Analysis and Common Sense?
    As to the way common sense seems to be going since the start of this thread (07-26-02): downhill fast.
     
    #91     Apr 11, 2006
  2. Some people just don't know the difference between "common sense" and "good sense".
     
    #92     Apr 11, 2006
  3. btw, did ya mean to post something that makes sense?
    :confused:
     
    #93     Apr 11, 2006
  4. 04-11-06 07:04 AM



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    Quote from DblArrow:



    An indicator based on some mathamatical calculation of price will always remain the same. It will always react to the market in the same manner. Perhaps price action will change, traders perception of the market may change, or the length and breadth of trends, but the indicator will react to that change.


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    Very very good observations!


    Regarding TA and common sense both these comments are dealing on the periphery of TA and making money.

    TA has as a basic precept the focus of extending man's observational skills. This is the same notion that explains why man invented tools.

    The above comments about indicators, as tools, is quite messed up.

    The three elements of concern are the market, the tool and the trader.

    If change occurs over time, there will be consequences. The market and the trader will change; there is no doubt of that.

    These three nodes are the major construct for making money but it becomes very apparent that there is more to the picture.

    I am making this comment slowly with short paragraphs so that almost anyone can take it into consideration. It may be even possible for the reader to self evaluate where he was before he read these comments and then make a comparision to where he may take himself as a consequence of further considerations. Most people will continue to be stuck where they are. Don't worry if you are in this class of people. Sometimes after a period of consideration it is possible to try to become unstuck. The common periods are 48 hours, 2 weeks and 6 months.

    All nodes are connected with links of varying dimensions. Three nodes is a simple construct and can usually be articulated satisfactorily.

    Links and their function also change over time as do the nodes. It is unfortunate to have a views, as stated in the reference quote, that tools are static.

    If a person has not progressed to have all of these systemmic considerations well understood and completely in hand, then he is not operational. as you can see, in 20002 the participants were not operational. and neither are those being quoted and their repondents. Why is this happening? Incompleteness is the causal factor, primarily.

    If you take the time to make a timeline of the last 50 years, you will see significant milestones that affect the links and the nodes. You will find that both gradual and sudden changes affect one of the six elements and then the effect ripples through the system.

    A common myth that edges come and go is related to this "changing over time" phenomena. By looking at an equity curve you can see the results of how a trader performs in the continuing change of the system.

    Here is an incomplete application of TA ( A commercial training and subscriber system). MA, MACD and Stoch are applied to a market element (stocks). The "AND" of these three indicators is a "buy" or "sell" mechanical decision made for the trader.

    It works at one level when it is used by the subscriber as provided to him and it works at an entirely different level (better) when it is modified (by a set of recommendations). This "before" and "after" example was largely improved by dealing with tools (TA indicators).

    My copy of TA from A to Z is annotated to correct the tools to the contemporary settings. My copy of The self-Healing Human is simmilarly annotated for traders. My copy of larry Harris is annotated to have a complete Venn diagram of the three links and three nodes.

    Make a short list of 100 or so events from your timeline. Draw a path with six carrots (>) that shows the order in which the links and nodes were affected (start with the event) Make a parenthetical annotation of what the "change" (effect) was that resulted from the prior cause. Cause and effects ripple through the system in differing orders and intensities.

    Once you have the 600 causes and 600 effects, then you can group them into affiliated sets and subsets. One element of the system will have lots of effects the are causes of other parts of the system. You make even be able to see that loops form as positive feedback and also that some loops are not critically adjusted. One thing you will learn for sure is that the system does NOT deal in opposites but it deals with orthagonal relationships.

    In the example above tha MACD had been modified from the original design 12, 26, 9 to 8, 17, 9 which was not workable. I changed it to one that was compatible with the MA and Stoch and things began to click for the subscriber. The small inherent difficulty with the ommercial system remains in that excessive weight is given to a secondary indicator. But for 19,000 dollars plus subscriptions what can you expect.?

    In another four years (2006 to 2010) we might see whether any improvements were made that better advance the topic compared to the 20002 to 2006 era advances. ET strikes again.
     
    #94     Apr 11, 2006
  5. Cheese

    Cheese

    Has anyone found anything that works consistently over a long period of time? Yes. What works is volatility. Its the money spreader. Go take some money. My often quoted description is 'gyrations' (eg YM).

    The answer expected above would have been to offer the name of an indicator. Same old problem. People want the answer before they have the relevant question.

    What is the first question? It is: where are the biggest money trees? Well a big grove of them are called markets.

    Next what is it I need to notice before anything else? Well you look at the DOW and can you see the obvious? Do you see the magic of the gyrations and lots of big ones.. they just don't stop coming. You see the mother goes up and you can see the mother goes down. Up and down.
    :)
     
    #95     Apr 11, 2006
  6. Great comments here...nothing but a buncha experts, hell CNBC probably cant put together a better line up for a show.

    So where is everyone getting their mentors from, I noticed a few comments and the thread poster saying the mentor was key. Any pointers on where to look, and what to look for?
     
    #96     Apr 11, 2006
  7. Buy1Sell2

    Buy1Sell2

    Oh yes, you mean like how I remember where I was when I heard that Kennedy was assassinated? Oh I get it--neato!
     
    #97     Apr 12, 2006