Technical Analysis Doesn't Work

Discussion in 'Technical Analysis' started by rcanfiel, Jul 16, 2007.

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  1. Thanks. You saved me 10-15 minutes talking to a potted plant. This is just a rehash of what came earlier in this thread. "What about this guru? or that one? Doesn't that cinch it? Huh? Huh?"
     
    #851     Aug 30, 2007
  2. Vienna

    Vienna

    Whatever. I give up. This is a self-fulfilling prophecy for you and the originator of this thread:

    1. Technical Analysis does not work
    2. Ah, but there are examples of people who CAN make it work consistently . But lest your brain gets stuck on Marty Schwartz, let me repeat: Marty is JUST ONE EXAMPLE. I know plenty of others.
    3. So these people must be black swans, anomalies, using vodoo. (btw, Martys hit-rate- over 75%, for many years. This is one hell of a black swan). What is your hit-rate using "tested" criteria?
    It can not POSSIBLY be that these people have trained their brains to analyse multiple data inputs in real time, REPRESENTED ON A CHART, creating a binary trade decision scenario. Why? Because:
    4. MY instruments can not MEASURE their edge (even though it seems to exist)?
    5. It could not possible be that my instruments are too coarse or wrongly tuned to pick up the right signal. So? Return to 1.

    Repeat at nauseam. Bye.
     
    #852     Aug 30, 2007

  3. yes, thats entirely possible. its called subjective TA, that which i have no issues with, as i have no issues with picasso. however, this can't be taught or learned as a series of rules--- its the intuitive process at work which is a very powerful tool.

    surf


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    #853     Aug 30, 2007
  4. Maverick1

    Maverick1

    Surf, I find your logic very weak. I think that calling Marty Schwartz a black swan only makes sense from the perspective that, yes, it is 1 in 10000 traders that has the fortitude to overcome the initial losses associated with learning the business. He turned profitable after 10 years of trying and losing money. How many of us can handle that? I would say most of us would want to quit after 1 year, not 10. Not to mention not having the resources to keep going in the early years.

    Also, would you walk up to Tiger Woods and tell him, you know, you're really not a tiger, you're just a black swan. Afterall dude, out of the hundreds of thousands of golfers worldwide, there just HAD to be one with so many trophies like you, wouldn't it? huh, huh? Have you heard of Taleb and fooled by randomness Tiger? You're just a random anomaly!

    LOL. I doubt you would. Because you know that it's Tiger's immense hard work and technique that has earned him top spot, not randomness. The bottom line is that trading is like any sport, the top is reserved for a select few. So the lack of top traders is not an indictment of the methods used by traders, especially when evidence has shown that the top traders' methods are varied and unique. Rather it's an indictment of the lack of hard work, perseverance and talent in the general trading population.

    For one to know without fail that Tiger's record is not a fluke, or a statistically random occurrence, all one has to do is compute the statistical significance of his repeatedly excellent performance over the last ten years and try to reject the null that his trophy winning is not significantly different from that of the average pro golfer. We know what the answer will be. Marty is no different.

    Again, all it takes is one black swan to refute the hypothesis that all swans are white. Your hypothesis is that objective TA does not work is like saying all swans are white. There are not one, but many black swans that disprove it, as Vienna has pointed out. So you argue that it is 'subjective' TA that works. Well guess what, subjective TA is TA nonetheless.

    Re JP Getty, really a silly argument and red herring. Listen, Roger Federer keeps a tweety bird stuffed toy in his bag for good luck. Yet, do you hear anyone attributing his success to tweety? In Marty's case, ask him or read his book, and he will tell you TA was a huge part of his success.

    So fess up, some intellectual honesty would be nice from time to time coming from you.
     
    #854     Aug 30, 2007
  5. There is only one problem here. When they are actually put under the microscope, TA falls on its face. Many times.

    The response from TA believers is never "here is a 30 year study on this setup. It clearly shows a significant outperformance edge" The response is either a claim of 2-3 months "well, it works for me", or the constant appeal to Brand X guru , who "makes it work".

    Of course, it is never demonstrated that the reason for the outperformance is ONLY due to TA. Little attempt is made to eliminate the portions of profitability possibly due to: Money management, portfolio management, interest, trade management, luck in leveraging a rising market, fees from running hedge funds/speaking fees/running an advisory, outright lying about the profitability, the fact that out of a thousand major investors - a few of them wind up on top due to sheer probability even over many years, etc. etc. THIS IS CALLED CONTROLLING FOR OTHER EFFECTS AND IS REQUIRED TO BE STATISTICALLY VALID. Testimonials and Anecdotal appeals have ZERO value.
     
    #855     Aug 30, 2007
  6. I agree if you are saying a person cannot use only a hammer to build a house and that there is a minimum level of skill needed to properly use a hammer. If instead you mean a hammer cannot be used to build a house, that is a conclusion I do not understand.
     
    #856     Aug 30, 2007
  7. taowave

    taowave

    Your crusade is a bit ridiculous,to say the least.

    Dan Zanger has done exceedingly well using pure T.A.
    You will find 100 reasons to the contrary,but he is the hugely successful trader..not you

    Do successful traders really give a shit if their wealth is derived from soley T.A.,or from an art based predominantly on T.A..

    What would you call a trader who scans the stock universe for high relative strength/reasonable P/S ratios and growing earnings,but only buys on retracements and/or technical patterns??Does the fact that he employs strict money management and ATR stops below key pivots render T.A. meaningless???

    No offense,but you border on the absurd and are clearly on a crusade.What percent of ALL traders regardless of style are profitable??And how many of those are super profitable??

    Of course T.A doesnt work for the majority...Most traders lose money,T.A. or not.So,in your eyes NOTHING works...

    But do not be so completely naive to think that there are not some exceedingly successful people trading "pure technical analysis"....

    Once again,just because you have fell flat on your face,does not mean everyone has take a nosedive...You cant be that dumb...Can you??

     
    #857     Aug 30, 2007
  8. Let us not forget that rcanfiel has previously announced that he will likely be selling a service of some kind or other in due course. Trading-related, naturally. Perhaps this thread is a build-up and a lead-in to the grand moment. I just can't wait. Can you?
     
    #858     Aug 30, 2007
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    #859     Aug 30, 2007
  10. Maverick1

    Maverick1

    Ok mr wikipedia wielding rcanfiel, let me ask you a question:

    Would you walk up to Tiger Woods or Roger Federer and tell them that their track record proves nothing about their technique and hard work and that there are merely random/lucky statistical outliers among the very large population of golfers and tennis pros?

    The question also is posed to Marketsurfer and anyone else taking his stance, btw
     
    #860     Aug 30, 2007
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