Technical Analysis = CRAP

dejavu8 · May 8, 2011

quant is much superior than TA IMHO. i have been using it for past more than three months with no losing trade in trading oil futures.

Neenisti · May 8, 2011

Quote from failed_trad3r:

there are barely any technical traders that backtests.
More...

I know tons, you need to travel in more open circles.

failed_trad3r · May 8, 2011

Quote from Neenisti:

I know tons, you need to travel in more open circles.
More...

manual backtests or automatic? i've only known technical analyst who either dont backtest, or backtest with hand and eyes which is prone to errors.

Lucrum · May 8, 2011

Quote from NoDoji:

Some ways to trade it:

Price moved up pretty good from the open. Buy the pullback at the opening price, stop and reverse short just below the opening range low.

Buy a break of the opening range high, sell a break of the opening range low (selling an initial break of the low is a low probability trade because of the buying pressure off the open; waiting for further confirmation makes more sense).

Since price moved up off the open, trail a buy stop just outside each pullback bar's high until a bar break takes you into a long position, stop below the opening range low. This took you long @ 96.57 for an excellent run of well over a point.

Counter-trend: 10:50am ET bar is a bearish bar signaling a likely pullback to the 20-bar moving average at least. Offer to sell a pullback to the low of the last bar that printed a higher low (the 10:45am ET bar low of 97.59). Use a tight stop of .10 to .15 in case the bearish bar signal is wrong and a strong trend is on. Target is a pullback to the 20-bar MA.

Bid to exit the short and reverse long at the 20-bar MA, stop .10 to .15 below the MA, target higher high.

Once price fails to make a new high, tries to break out of the channel and fails again to make a new high (internal double top @ 97.63 and 97.65), short a break of the 20-bar moving average, initial target 96.72 (where the 10:11am ET bar high was interim resistance), then 96.57 (pullback pivot break zone), then a break of the opening range low. (The price swings from this entry on could've been traded in chunks, or you could've just held the position through the pullbacks and even added to it, since no bars closed above the now-falling 20-bar MA and there were no other decent long signals.)

Sell a break of the previous pivot low at the 20-MA (the 97.10 low from the initial pullback off the new high), stop just above the breakout bar. If price fails to break at least .10 through that pivot low, move the stop to b/e and if stopped out, wait for more confirmation to the short side.

Wait for price to make a lower low (break through the 97.10 pivot low), then sell a pullback to the 20-bar MA, stop of .10 to .15, target a lower low or a test of the opening range low.

Virtual double bottom (2:40 and 3:00pm ET), trend reversal signal, buy an upside break of the bar that printed double bottom support, or wait to see if price can break the previous resistance of 96.31 and buy a pullback to the break of the bar that printed DB support. Stop placement can be just below DB support, initial target, test of previous support (96.52), if that breaks, test of next previous support (96.73) and if that breaks, target a break of next resistance (96.88-96.90), and so on.

All these setups were based on a simple chart with S/R levels used for entries and targets, and a mobile S/R level (the 20-bar MA) used to enter on pullbacks in a trending move.
More...

Excellent reading for any of the open minded skeptics.

Neenisti · May 8, 2011

Quote from failed_trad3r:

manual backtests or automatic? i've only known technical analyst who either dont backtest, or backtest with hand and eyes which is prone to errors.
More...

Fully automatic objective algorithmic back-testing.
It's the only accurate way I know.

Frits · May 8, 2011

Quote from NoDoji:

I've found that they do. I've traded stocks, oil futures, stock index futures, and currency futures successfully using all the same chart patterns. I traded FX in a sim account successfully using the same patterns as well.

I guess if you traded large size, you could make a "killing", but that was a pretty narrow price range yesterday.

Some ways to trade it:

Price moved up pretty good from the open. Buy the pullback at the opening price, stop and reverse short just below the opening range low.

Buy a break of the opening range high, sell a break of the opening range low (selling an initial break of the low is a low probability trade because of the buying pressure off the open; waiting for further confirmation makes more sense).

Since price moved up off the open, trail a buy stop just outside each pullback bar's high until a bar break takes you into a long position, stop below the opening range low. This took you long @ 96.57 for an excellent run of well over a point.

Counter-trend: 10:50am ET bar is a bearish bar signaling a likely pullback to the 20-bar moving average at least. Offer to sell a pullback to the low of the last bar that printed a higher low (the 10:45am ET bar low of 97.59). Use a tight stop of .10 to .15 in case the bearish bar signal is wrong and a strong trend is on. Target is a pullback to the 20-bar MA.

Bid to exit the short and reverse long at the 20-bar MA, stop .10 to .15 below the MA, target higher high.

Once price fails to make a new high, tries to break out of the channel and fails again to make a new high (internal double top @ 97.63 and 97.65), short a break of the 20-bar moving average, initial target 96.72 (where the 10:11am ET bar high was interim resistance), then 96.57 (pullback pivot break zone), then a break of the opening range low. (The price swings from this entry on could've been traded in chunks, or you could've just held the position through the pullbacks and even added to it, since no bars closed above the now-falling 20-bar MA and there were no other decent long signals.)

Sell a break of the previous pivot low at the 20-MA (the 97.10 low from the initial pullback off the new high), stop just above the breakout bar. If price fails to break at least .10 through that pivot low, move the stop to b/e and if stopped out, wait for more confirmation to the short side.

Wait for price to make a lower low (break through the 97.10 pivot low), then sell a pullback to the 20-bar MA, stop of .10 to .15, target a lower low or a test of the opening range low.

Virtual double bottom (2:40 and 3:00pm ET), trend reversal signal, buy an upside break of the bar that printed double bottom support, or wait to see if price can break the previous resistance of 96.31 and buy a pullback to the break of the bar that printed DB support. Stop placement can be just below DB support, initial target, test of previous support (96.52), if that breaks, test of next previous support (96.73) and if that breaks, target a break of next resistance (96.88-96.90), and so on.

All these setups were based on a simple chart with S/R levels used for entries and targets, and a mobile S/R level (the 20-bar MA) used to enter on pullbacks in a trending move.

Psssst...in very rare instances, it lasts forever.
More...

This is brilliant !! Pointing out winners afterwards !!!

cornix · May 8, 2011

Quote from Frits:

This is brilliant !! Pointing out winners afterwards !!!
More...

Wasn't that exactly what chart posted asked for?

cornix · May 8, 2011

Quote from failed_trad3r:

manual backtests or automatic? i've only known technical analyst who either dont backtest, or backtest with hand and eyes which is prone to errors.
More...

Can you backtest the play of champion athlete or talented musician?

NoDoji · May 9, 2011

Quote from Frits:

This is brilliant !! Pointing out winners afterwards !!!
More...

The trades are winners because price action trading using basic technical analysis works. Also notice that the risk on each setup was significantly less than the initial profit target.

Frits, how would you have traded BIIB on Friday, using the initial 5-min bar as your starting point?

Quote from cornixforex:

Wasn't that exactly what chart posted asked for?
More...

Yes, it was. I answered the poster's question and every potential trade I pointed out was based only on setups I trade and using trade management rules that I use.

cornix · May 9, 2011

Quote from NoDoji:

Yes, it was. I answered the poster's question and every potential trade I pointed out was based only on setups I trade and using trade management rules that I use.
More...

Yeah, don't see the point to criticize you for "after the fact trades", when that was exactly what the chart poster asked everyone to show.