Technical Analysis Doesn't Work

ProfLogic · Aug 21, 2007

Marktsurfer,

Still waiting on your pretend debate. I can not wait.

Until then you can stuff your fantasy comments.

jamie4418 · Aug 21, 2007

Quote from rcanfiel:

This is a thread dedicated to the principle that Technical Analysis (by and large) has little to no value. It is contended that people continue to learn, sell, promote or believe in technical analysis, contrary to the many studies that continually demonstrate little to no <i>special</i> predictive value from TA indicators or chart patterns [also including Fibonacci levels, Elliott Wave, Gann, and probably Volume.]

The consideration of Price action, free of all indicators or other philosophies mentioned above, is not included in the definition for purposes of this thread. This seems to be one of the few ways that many successful traders use that actually works.

Those dissenting will usually try to defend TA via some of the following methods:

1) Stating "of course method a or indicator b has value. You just have to know how to apply it."

2) Anecdotal or testimonial evidence (often unverifiable or presented in an unrealistically positive light), in which a poster says "it works for me" or "I know a successful trader who..." or other variations on this theme. Often the person known may only use a certain technique or a (small) part of his trading method.

3) Throwing mud at a well-designed test by pointing out a perceived flaw or parroting the fine print of such a test. Usually, the poster will ignore other parts of the survey and offer little evidence of their own. This is mostly a distractive technique, not something that would hold up under academic/scientific rigor. To fully discredit something requires equally rigorous evidence, that is accepted by the other knowledgeable individuals in the invest community.

4) Point to some successful guru "who I know used it" However, rigorous independent monitoring is usually absent and longterm tracked performance results will generally be missing, spotty, ancient, or questionable. Or again, the particular method might only be a fraction of the trading methodology, where something else such as money management might explain the outperformance.

5) Use other distracting or verbose arguments that have little value if examined "under the hot lights."

6) Point to a few well-chosen examples of success, when a true test requires a large sample to demonstrate value.

None of these arguments would hold much weight as compared to longterm, rigorous statistical sampling & testing of a mentioned method or indicator, over a diversity of markets and market time periods.

It is further noted that since some 95% of leveraged traders are said to lose their trading capital, and that technical analysis is the preferred method by most traders, that there is a primary link between these two facts.

One definition of Technical Analysis is:

<i>Technical analysts (or technicians) identify non-random price patterns and trends in financial markets and attempt to exploit those patterns. While technicians use various methods and tools, the study of price charts is primary. Technicians especially search for archetypal patterns, such as the well-known head and shoulders reversal pattern, and also study such indicators as price, volume, and moving averages of the price. Many technical analysts also follow indicators of investor psychology (market sentiment).

Technicians seek to forecast price movements such that large gains from successful trades exceed more numerous but smaller losing trades, producing positive returns in the long run through proper risk control and money management.

There are several schools of technical analysis. Adherents of different schools (for example, candlestick charting, Dow Theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one school. Technical analysts use judgment gained from experience to decide which pattern a particular instrument reflects at a given time, and what the interpretation of that pattern should be. Technical analysts may disagree among themselves over the interpretation of a given chart.</i>
More...

Rcanfiel, I think you make a good point. I think TA is good, but only up to a point. I think general, simple TA is good. But once one overanalyzes it, it gets closer to random. TA certainly has its place, but I would take it with a grain of salt and put it in proper perspective.

The best traders say they use TA and FA.

marketsurfer · Aug 21, 2007

Quote from ProfLogic:

Marktsurfer,

Still waiting on your pretend debate. I can not wait.

Until then you can stuff your fantasy comments.
More...

are you accepting the challenge?

surf

rcanfiel · Aug 21, 2007

Quote from ProfLogic:

It's obvious you do not understand what the words; exact, precise, strict or absolute means.

No, it is obvious you don't know what words, in general, mean.

There are over 35 different types of snowflakes:
Simple Prisms
& More (doesn't include the many more associated with man made snowflakes)
...

You forgot "ProfLogic"

Only 8 of these 35 listed forms are predominately 6 sided. And not even those 8 are ALL 6 sided. These are courtesy of CalTech. Of course rcanfiel/Smurf is far smarter than all of the specific snow researchers there or at least he and his trusty encyclopedia THINK they are.

Courtesty of caltech? Of course you didn't bother to include the link for this. Try this one from caltech, why snowflakes are 6 sided:

http://www.its.caltech.edu/~atomic/snowcrystals/faqs/faqs.htm

Now that I have made an idiot out of you regarding snowflakes should I proceed with ocean waves?

If this is your idea of how to make an idiot out of someone, you should go back to practicing in the mirror.

Oh, you forgot to comment on my last paragraph as well but you obviously didn't understand what was stated there either.

Since you tend to gloss over and ignore most content as in many posts in this thread, this statement has little value. Try just rereading the last couple, you gloss over much...

I'm still waiting on the one facility member still willing to speak to you after you dropped out of grad school to contact me.

Who said anyone dropped out? I was wondering whether you ever passed your GED.

It's almost cruel having a battle of wits with an unarmed person.

An overused cliche. Your admiration for your ability is highly misplaced.

rcanfiel · Aug 21, 2007

Quote from ProfLogic:

I don't need a "Snowflake" scholar. I know that information blindfolded.

Now that is one of the funnier things I have heard. You just happened to know there were "35 types of snowflakes, and only 8 were 6-sided"? Your posts are conceited, but that statement is really out there.

Common sense is a trait I have in spades.

Not based on your writings...

ProfLogic · Aug 21, 2007

Quote from rcanfiel:

Quote from ProfLogic:

I don't need a "Snowflake" scholar. I know that information blindfolded.

Now that is one of the funnier things I have heard. You just happened to know there were "35 types of snowflakes, and only 8 were 6-sided"? Your posts are conceited, but that statement is really out there.

Common sense is a trait I have in spades.

Not based on your writings...
More...

I did a paper in college on snow and have a good memory. Sorry your brain cells are in a crack pipe.

Another marketsurfer alias on ignore.

trader225 · Aug 21, 2007

What gives?

Didn't I say that the market is a pinball machine?

Does anyone doubt that?

rcanfiel · Aug 22, 2007

Quote from ProfLogic:

I did a paper in college on snow and have a good memory. Sorry your brain cells are in a crack pipe.

Yes, I am sorry I did not guess that you did a paper on snow. But unsurprising, since you are mostly snow jobs...

Another marketsurfer alias on ignore.

If only; the peace would be welcome...

oddiduro · Aug 22, 2007

It has been a long time since I have posted, but I have to ask surfer this.......

Surf, you stated in a prior interview that you use NeoGann channels, which is made of your rendition of the squaring of price and time.

The simple fact that you say anything about Gann indicates that you use TA to make your calls.

How can you say that TA does not work when you use TA to make your calls?

Are you admitting that you are only guessing?

What are you doing when you talk about the "death zone"?

Are you long, short and flat for any reason at all?

It is worth mentioning that ANYTHING other than fundamental analysis is some form of TECHNICAL ANALYSIS.

I am very confused about your position on this debate.

Also, not to sound redundant, but I know both Hershey and ProfLogic's methods very well. Jack does not say when DU is coming, but we know what to do when it does come. If this signal is confirmed by an FTT, then that is all the better. ProfLogic does not know when the next challenge of a price level comes, but we know what to do when it become apparent that the challenge will be made.

TA is about what to do when a market situation presents itself. You, surf, are long or short based on when a breach of your neogann channels occurs for longer than 3 minutes.

It that not TA ????

Best Regards,
Oddi

oddiduro · Aug 23, 2007

Wow, I guess surferman ran away with that exposure