Why Technical Trading Signals Stopped Working

Discussion in 'Technical Analysis' started by SunTrader, Nov 20, 2019.

  1. Here is a quote about this from Gary Phillips, a guy that knows futures...

    "...markets have changed. given the near extinction of retail participation, and the almost total dominance of professional and algorithmic trading, it is unlikely that the biases and readily "available" cognitive reference points that are the hallmark of the retail trader, still exert their influence on pricing today. more than ever, the market is predisposed to preying on unsophisticated traders..."

    The guy knows a lot about the history of futures trading so he can explain it.
     
    #21     Nov 27, 2019
    pedro0309 and themickey like this.
  2. themickey

    themickey

    Yes, agree, I'm seeing more and more situations on a daily basis on stock prices, of immediately reversing on strong moves. Breakouts collapsing time and again, only to recover several days later.
    Strong moves are met with strong reversals, it seems that markets have taken a much shorter time frame mentality.
     
    #22     Nov 27, 2019
    Overnight likes this.
  3. tommcginnis

    tommcginnis

    If only there were a way to insure against these price swings -- and maybe measure this market jumpiness, too. Someone should invent a financial insurance product by which you could save yourself from price jumps (of the things you wish to buy) and wicked drops (of the things you wish to sell). And *those* people could take the risk. THAT would be wonderful. :thumbsup:

    But the 'strong moves' thing.....? That would be completely different, I guess. The financial insurance people imagined above would have something to say about it, for sure. Maybe they could measure the jumpiness relative to past jumpiness -- make it a ratio, you know? But you'd have to square it and take the root, or all the jumps would add to zero, right? Yeah. How do you get the actual range? The *true* range? Hard. But if you could do that, and get a bunch, you could find their average number -- that would be useful.

    I'll bet the financial insurance people are working on this 'jumpiness' question right now -- that, if they can come up with an insurance product, they will price that jumpiness right into their contract. I'll bet you anything.
     
    #23     Nov 28, 2019
  4. destriero

    destriero

    It's called a varswap you idiot.
     
    #24     Nov 28, 2019
  5. volpri

    volpri

    This is ridiculous thinking. Any donkey can see the red line has way more profit potential than the blue line.....unless the observer of the lines has birdsh?t in his/her eyes.
     
    #25     Nov 28, 2019
  6. volpri

    volpri

    bingo
     
    #26     Nov 28, 2019
  7. rknas

    rknas

    They stopped working? Glad no one told me that. :D
     
    #27     Nov 28, 2019
    tommcginnis likes this.
  8. SunTrader

    SunTrader

    I was making a blanket statement (not just indicators) which point to OB/OS levels/conditions.

    Markets continuously go higher/down lower when they are so-called OB/OS. How can that be?

    An example stock goes up, becomes "over-bought". More buy, does it now become "over over-bought"? Often a mania along the lines of the dot-bomb era takes place. Stock now becomes "over over over-bought" I suppose?

    Stocks top out and go down once there is a lack of buyers (and vice versa lack of sellers at bottoms). If you believe that, as I do, again how can that be if it was just "over-bought" at the top or "over-sold" at the bottom?
     
    #28     Nov 30, 2019
    tommcginnis likes this.
  9. Zodiac4u

    Zodiac4u

    Sorry I don't put too much thought into these type of ideas. Way to much conflict when it comes to thinking this way, at least for me there is. I'm strictly short term. Cheers.:thumbsup:
     
    #29     Dec 1, 2019
  10. SunTrader

    SunTrader

    So in other words you believe that so-called OB/OS levels show when a market is OB/OS?

    If so how do you explain markets going higher (or vice versa lower) when they are OB/OS?

    And sometimes much much higher (vice versa much much lower)?

    You do understand the limitations of indicators that are range limited to the 0 - 100 spectrum?

    Also this discussion, which you seem to want to end fair enough, has nothing to do with short or long term.

    "Cheers"
     
    #30     Dec 1, 2019