Quasirandom Sequence A sequence of -tuples that fills n-space more uniformly than uncorrelated random points, sometimes also called a low-discrepancy sequence. Although the ordinary uniform random numbers and quasirandom sequences both produce uniformly distributed sequences, there is a big difference between the two. A uniform random generator on will produce outputs so that each trial has the same probability of generating a point on equal subintervals, for example and . Therefore, it is possible for trials to coincidentally all lie in the first half of the interval, while the st point still falls within the other of the two halves with probability 1/2. This is not the case with the quasirandom sequences, in which the outputs are constrained by a low-discrepancy requirement that has a net effect of points being generated in a highly correlated manner (i.e., the next point "knows" where the previous points are). Such a sequence is extremely useful in computational problems where numbers are computed on a grid, but it is not known in advance how fine the grid must be to obtain accurate results. Using a quasirandom sequence allows stopping at any point where convergence is observed, whereas the usual approach of halving the interval between subsequent computations requires a huge number of computations between stopping points. *****Sorry Marketsurfer if I don't believe you could apply this in any situation of real life or trading.
Technical analysis is science. Trading requires science and art. The art comes from the trader interpreting the science. Technical Analysis is not crap. If results are poor it's most likely due to a crappy trader.
So true. If you put the best electric guitar in my hands I guarantee it's gonna sound like a cat being killed when I play it. Does that mean the guitar is crap? Sure some TA is over the top, like Gann Fans, CCI etc. However, to think there's no use in simple stuff like horizontal lines of support and resistance, SMA's is to be foolish. When using TA if you (KISS) Keep It Simple Stupid, it's hard not to have an edge. Sure some guys will come on here and vehemently crap on this, but do they make any money trading? Proof is in the pudding. Always has been, always will be.
You are right it is not predictive, but that is not to say you can't make money using it IF one understands the finer points of relationships of both price and the indicator, but very few people will take the time to completely learn about both. And anyone who just uses what they call "Price action" is using a form of TA, it might not be something you look at below the chart, using a trendline has the same probability of being successful as a signal generated like TSI (True Strength Indicator), it is still 50/50. The only thing that truely makes the money is your Money Management Rules. But using Price Action alone has not Predictive powers either. You certainly can't predict if your heart will be beating three minutes from now, why would anyone think an indicator or trendline will be any different.
I think you have provided the answer to the 2 questions with your post - the people who do not, and perhaps never will, believe in TA. And no, I would not think them dumb, they just have a different way of evaluating things. But spot on about cutting short the losers and letting the winners run - that turns a 30% winners system into an overall winner, and if you can get 50% right, that will finance a champagne lifestyle. Cheers.
Me thinks the OP is confusing an indicator with a Buy-Sell Trigger. An indicator does what all indicators do in a complex situation - it alerts to a condition that may or may not require action, depending on other factors. It helps to illuminate details that might otherwise go unnoticed. A money making Buy-Sell Indicator is very different weapon. It requires a 60 second learning curve and can turn an idiot into a bigger fool in next to no time. Those who are experts in such triggers learn to despise TA because they believe they have proved to their entire satisfaction and therefore to the world at large, that TA doesn't work. Of course it doesn't work: nothing works! Those who succeed are just lucky.
You're right, so everybody sees something else! Matthew uses a 12 tick breakout chart, Denise uses a point & figure chart, Victor uses a 10 minute candlestick barchart, Pedro uses a 20 tick breakout chart, Donald uses a 1 minute candlestick barchart, etc. etc. I don't think I need to go on. Furthermore they all have different settings in the timeframe of their technical indicators. One has RSI over 7 periods, the other over 15 periods, etc. etc. Besides that there are over 50 technical indicators and the professionals (salespeople with their courses) tell you a combination of three is most solid. That's 50x50x50= 125000 combinations!! And that's without all the options of different charts and different time frames. So every individual with is own settings for TA sees something different. And unfortunately one individual trader is not able to "give the market a certain direction". And if everybody sees something different what is the predictive value of TA... Zero. Shaka , Frits
This thread is about TA mate. If you want to trade on price action you don't need a chart with lines in it. A DOM-trader will do to see price action and volume. Nevertheless I personally think price action is very interesting and if you want to know more about it, start here. www.nobsdaytrading.com It's quite informative and good for a few laughs! Shaka, Frits