You would have to look long and hard to find these "big players" using tech indicators to determine their trading Research consistently debunks tech indicators and TA in general, especially after considering all trading costs. This is not popular here, so a howl of protests will ensue, but mostly from the wounded pride of the indicator lovers. The proof to the contrary will not materialize of course, just the howls
Who cares what 'research' shows, there are MANY ways to use indicators that are not "traditional", meaning not how they were intended to be used. Its certainly possible to take an indicator and figure out some way to make it work, doesnt mean it has to be anywhere close to the traditional packaging of said indicator. Have you ever considered that some people can think outside the box or do you only think that things must be one way or not at all? Also 'proof to the contrary' is essentially allowing the masses of idiots entry into a world that they shouldn't be allowed in to in the first place........consistent profitability. Not happening pal.
I thought I saw one of Andrew Lo's papers on quantitatively defining trading patterns such as h&s, double top, etc and he showed significant returns post fees. Or is this no longer TA?
MA'S , you have to tune them to your chart..each chart , new ma's for support and res.- get the indexes as they relate to your stock , then move in on your weeklies, then your dailies ..as much confluence as possible- use several time frames..throw in some GANN with that ..you are looking for overlap..as much as possible
Quote from Fireplace: Who cares what 'research' shows, there are MANY ways to use indicators that are not "traditional", meaning not how they were intended to be used. ouch. we gotta another alternative med person, here... Its certainly possible to take an indicator and figure out some way to make it work, doesnt mean it has to be anywhere close to the traditional packaging of said indicator. Proof to the opposite needs proof, not beliefs and assertions. Have you ever considered that some people can think outside the box or do you only think that things must be one way or not at all? People who dump evidence and chase leprechauns need help, not consideration. Show me a UFO and I will consider it. Show me evidence and I will consider it.
Ok, I'll tell you the secret. Big players use the indicator shown in this thread: http://www.elitetrader.com/vb/showthread.php?s=&threadid=192786
Yes, I was mistaken and had mixed up the results of this paper with another, although there may be some promise: "We find that certain technical patterns, when applied to many stocks over many time periods, do provide incremental information, especially for Nasdaq stocks. Although this does not necessarily imply that technical analysis can be used to generate "excess" trading profits, it does raise the possibility that technical analysis can add value to the investment process." Foundations of Technical Analysis: Computational Algorithms, Statistical Inference, and Empirical Implementation, with Harry Mamaysky and Jiang Wang, Journal of Finance 55(2000), 1705-1765