http://www.elitetrader.com/et/index...ant-macro-investor.290475/page-2#post-4103131 If you keep the EURO/JPY chart upside down you can proof that I lost money.
I'll poke the bear here... Here's where I respectfully take issue with your general stance, which as you know I don't have a fully-formed opinion on: you have yet to produce credible evidence of failure, to reuse terms seen above. Cautionary tales yes, proof no. It's a lot harder to disprove a whole general theory definitively, than it is to prove the success of a specific implementation of one. (I haven't seen any ghost, but that's not proof that they don't exist.) Whatever you're alluding to that so completely converted you away from auction market theory, you're not sharing, which reduces your argument to: "trust me, I know". So from the limited information that I have and your reluctance to share, it seems to me that you've generalized your limited observations (in the scope of the entire markets) into an explanation of how all financial markets must work. That's a leap you can't expect anyone (skeptical) to make without also going through whatever you have. So unfortunately without any specifics, especially no categorical quantitative proof (which I'm guessing would be insanely expensive to produce), this is just an ideological and thus endless debate. Hold on! Aren't there plenty of successful quant funds around? (Two Sigma, etc.) Aren't those based on automated technical analysis?
The issue is the underlying premise that past price can increase the odds of a single trade or a series of trades being in the direction you are betting on. This makes no sense at its core and is in effect nonsensical. Quant funds have nothing to do with TA or charts. Man, where do you get this information?
In early 1990's, two of the fastest computers were Cray C90 and NEC SX3 (processor by processor). Yet, they are much slower than a high-end Intel i7 or Xenon CPU. If computers had limited shelf life in trading then, the future may look bleak. So far, I do not think computer can replace human creativity. Just my two cents.
Thanks for ignoring the important part of the message to focus on something to quickly dismiss. Unfortunately, you're missing the point here as well. A technical calculation doesn't have to be printed on a chart and reviewed by a human being. MACD is MACD whether it's on a chart or in an automated trading algorithm: it's still an indicator calculated based on past price movement alone, a.k.a. "technical analysis", which according to Investopedia "despite all the fancy and exotic tools it employs, really just studies supply and demand in a market in an attempt to determine what direction, or trend, will continue in the future." Back on quants, from the first hit I found: Investopedia Time, price and volume are quantitative data. Another one: Michael Halls-Moore As you can see, of the 4 types of systematic quant funds he mentions, half rely on price (and possibly volume) action through the past to place bets on the future. Maybe 3, depending on one's definition of "statistical arbitrage". Those are obviously the quants I was referring to. Oh! I thought he merely reformed from technical analysis into running a small fund based on his "Price Drivers™"? My mistake. Well regardless, I gave him 4 opportunities to share his reasoning, without success. It would've been 3, but today's was too enticing to pass up.
To me: Past prices are only used to analyze the behavior of people (or the market). The prices themselves from past are irrelevant and cannot be used for future trading. The behavior of the market in correlation with the moves the prices make and vice versa, are important and can be used for future trading. Because people, or markets, tend to have a build in reaction to certain circumstances, it is possible to "predict" within certain limits, what the prices will do in future. For me it works. I don't know what system Soros uses, but it is astonishing that in the JPY I made the same move in 2012/2013 as he did. Probably based on other systems but with the same result. Soros is according to you probably a genius, and I am an idiot. But we did the same thing, in fact I made more pips than he did because I was already short at least 6 months before he was, and at a much better price. I don't pretend that I am better then Soros, surely not. But in this particular case my not working TA worked very well, despite the fact that is should not work according to you. I now your answer already: I was lucky! No I was not lucky, I was happy.
I can state this simply--- how many moves or series of moves in one direction, or indicator triggers, increase the odds that the next move or series of moves will be in the same or opposite direction? If this simple observation can not be quantified, what are you doing looking at charts? PriceDrivers seek to look behind price to predict how price should move in the future. The things that move price not price itself. Sure, it can be wrong, but its a huge improvement over considering only past price.
I dont think you or any trader is an idiot. Its a very tough game and anyone who participates has my respect. Sure, it works sometimes. Just like random entries ( like going long because the market is down) can work also. But, heck, if it works for you and you are not making anything up, go for it! surf