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How many of Technical Analysis based systems are junk?

  • #21
  • Apr 21, 2007 5:19pm Apr 21, 2007 5:19pm
Quoting melpheos
...

Give a Ferrari to a apprentice, he will run in the wall pretty quickly. Give it to Schumacher and see the difference

STOP ! STOP ! STOP

Ralf ramped it TWICE !! Don't tell me Ralf Schmacher is an apprentice !!

  • #22
  • Apr 21, 2007 5:21pm Apr 21, 2007 5:21pm
Quoting Mother
only a fool whoud ignore the economic news.
??

I guess i know a lot of fools
  • #23
  • Apr 21, 2007 5:34pm Apr 21, 2007 5:34pm
"only a fool whoud ignore the economic news."

that might be too radicaly sad. As news they give one perspective to look how it reflects on technical behavour.
  • #24
  • Apr 21, 2007 5:34pm Apr 21, 2007 5:34pm
Majority of traders use indicators, in a evergoing cycle of fine tuning, combining, searching. Majority of traders loose. Can anybody see a connection?
  • #25
  • Apr 21, 2007 5:40pm Apr 21, 2007 5:40pm
Quoting Mother
"only a fool whoud ignore the economic news."

that might be too radicaly sad. As news they give one perspective to look how it reflects on technical behavour.
I remember one night, sitting in front of my Laptop, waiting for a Interest Rate statement from Japan. It's a tentative report, so nobody knows when it's going to come out. So we have all these traders with itchy trigger fingers. My audio news feed suddently went of: Japan will not raise interest rates. I bought USD/JPY, made a few pips, then a few seconds later another audio: Correction, Japan MIGHT not raise interest rates. It's moments like these when you really see the human element of the market. It was quite an experience making money on that Non-news.

When you talk about technical behavour, it's not really technical, in a TA kind of sense. It's more phycological, which is less scientific. there is a big difference.

Best regards,

Vlad Zapletin
  • #26
  • Apr 21, 2007 5:45pm Apr 21, 2007 5:45pm
Quoting zek132
When you talk about technical behavour, it's not really technical, in a TA kind of sense. It's more phycological, which is less scientific. there is a big difference.
i am not sure eanymore what is what. it goes really Dark Areas of horisont when it comes to Randomness and Chaos. people still observing and "starting" to study it.
  • #27
  • Apr 21, 2007 5:46pm Apr 21, 2007 5:46pm
Quoting zek132
Don't forget, 10-20 years ago almost nobody used TA. People still lost and made money in very similar ways. TA is new hype idea imho.

Best regards,

Vlad
I take acception to your inscolance you young whippersnapper.

TA is New is News to Me.

Hey. It's all good.
  • #28
  • Apr 21, 2007 6:01pm Apr 21, 2007 6:01pm
Quoting Mother
i am not sure eanymore what is what. it goes really Dark Areas of horisont when it comes to Randomness and Chaos. people still observing and "starting" to study it.
Chaos, that's an interesting subject. It seems quite reasonable that a lot of the time, market is "chaotic" in the scientific sense of the word. however, there are clearly times, when market is behaving in much simpler ways. in every market, there are times when it's possible to make abnormal returns, e.g after news events, and this is well documented. Rather then trading chaos, it seems like a better idea to trade inefficiencies and irregularities.

Best regards,

Vlad
  • #29
  • Apr 21, 2007 6:13pm Apr 21, 2007 6:13pm
Quoting zek132
Chaos, that's an interesting subject. It seems quite reasonable that a lot of the time, market is "chaotic" in the scientific sense of the word. however, there are clearly times, when market is behaving in much simpler ways. in every market, there are times when it's possible to make abnormal returns, e.g after news events, and this is well documented. Rather then trading chaos, it seems like a better idea to trade inefficiencies and irregularities.
When breaking that "chaos" of noise in small fragments of time and space. observing the market as 3 dimensional view. Every move can be confirmed tru thos fragments. Focusing only in small fragment of market movement. And how it behaves in that current fragment of time.

It will not tell what will occure next but it tell the charasteristic similaryties what market contains. Out come of that fragment is never the same. But there is similarityes in behavour.
  • #30
  • Apr 21, 2007 9:54pm Apr 21, 2007 9:54pm
I'm going to jump in and say, most don't understand what is going on in the first place, and what theories will work.. and they throw indicators on, and so you add what you don't know onto what you don't know, and you are expecting profit from that.. hmm...
google:
  • #31
  • Apr 21, 2007 10:01pm Apr 21, 2007 10:01pm
As if.

Quoting Mother
It will not tell what will occure next but it tell the charasteristic similaryties what market contains. Out come of that fragment is never the same. But there is similarityes in behavour.
  • #32
  • Apr 22, 2007 5:35am Apr 22, 2007 5:35am
Quoting tdion
As if.
By observing the market data from two diffrent angels of perspective. Combining two time lines on information to create thight boundyes aroud the market movement. By thos boundaryes its possible to observe dimension of time how market behaves. Combining in two of more time lines. Can give indication in reactions inside short timeline. Thos reactions might create change on events, what will occure is more distant perspective.
  • #33
  • Apr 22, 2007 6:03am Apr 22, 2007 6:03am
Without TA to be fair, alot of people wouldn't be able to make the money they do, as they'd have no basis to communicate system to people to take there money.

Sadly, none of these pay systems actually work.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #34
  • May 1, 2007 6:31am May 1, 2007 6:31am
any indicator that has open or close in it
  • #35
  • May 1, 2007 7:59am May 1, 2007 7:59am
Put a bunch of oscillators (CCI, Stoch, MACD, RSI, %R, Awesome, Ultimate, Alligator, Momentum, etc.) on one chart with the same time period, and tell me how many of them look almost the same, except more or less choppy/noisy.

Put a bunch of MAs (SMA, EMA, WMA, AMA, MAMA, etc.) on one chart with the same time period, and tell me how many of them look almost the same, except more or less choppy/noisy.

I did this a couple of years ago and came to the realization that all the indicators are almost the same thing. The reason why TA doesn't work is that instead of understanding what these indicators are and how they work and don't work, everyone spends too much time trying to tweak them to become the perfect indicator. This is as absurd as buying a brand new car, and knowing nothing about auto repair, taking out some random parts, and slapping in new random parts, and expecting to win the next Daytona 500.

As for "magic numbers" (Fibs, Fib retracements, Camarilla levels, Pivot Points, Gann, Murray Math, etc.), I absolutely hate these so-called indicators. They have almost zero basis as to why they should work, and the typical answer I get when I ask someone if it works or not is: "I don't know how it works... it just does"

The one that gets me really upset is Pivot Points... because no one knows why or how they came about... they just blindly follow it because it was the latest, greatest thing a few years ago. Pivot Points come from commodity floor traders; if any of you have ever seen or been on a trading floor, one thing you'll notice is that there are no charts, no indicators, and you're lucky to see the past five trades simultaneously. Also, the floor traders themselves have no cell phones, no palm pilots, no laptops, no calculators... just a stack of cards and a pencil. So the only information you get to see as a floor trader is basically the current price... and that's it.

Pivot points were developed because the floor traders needed to know what are considered important price numbers, based on the previous day's close and volatility... they were sort of agreed on price numbers to "start paying attention". Considering their use was intended for commodities with live traders, they have absolutely no basis for working with say, individual stocks, the currency market, or electronic markets, which are replacing more and more floor traders each day (virtually all the European markets have no floor traders).
  • #36
  • May 1, 2007 8:06am May 1, 2007 8:06am
Quoting bluebuddah
As for "magic numbers" (Fibs, Fib retracements, Camarilla levels, Pivot Points, Gann, Murray Math, etc.), I absolutely hate these so-called indicators. They have almost zero basis as to why they should work, and the typical answer I get when I ask someone if it works or not is: "I don't know how it works... it just does"

The one that gets me really upset is Pivot Points... because no one knows why or how they came about... they just blindly follow it because it was the latest, greatest thing a few years ago. Pivot Points come from commodity floor traders;
I lean this way too... at least until proven wrong.
  • #37
  • May 1, 2007 8:26am May 1, 2007 8:26am
its a round subject. Let say there is real fundamental analysist. and he can confirm existing market movements by fundamentals(news/economy/politics). Technical analysist confims thos moves by studying the existing market pattern. and she/he can confim the moves what matket made tru tecnical analysis.

both of the goals of Technical and Fundametals is to confim actions what market made. they have same goal diffrent pespectives.

Let say Fundamentals move market. but thos fundamentals can be observed by tehnical analysist. the message is the same. only two ways to look at it.

creating desission becous of the news or the pattern what was forming there.
  • #38
  • May 1, 2007 10:58am May 1, 2007 10:58am
Indicators all look the same, because they are all based on price action. That's all they are: historical price action. If you compare them to the movement of the price, it turns out to be identical to the movement of the indicator most of the time. The only time they are valuable is when it is not the same. People keep debating between price action and indicators, but when you get right down to it price action is the primary indicator and the others reflections of it, and to be honest it tells you no more than the other indicators. Just because price went up today, does not mean it will go up tomorrow. I have lots of moving averages and a couple of bollingers, but I trade on the basis of trend and dynamic and static S/R. I don't actually take trades off the indicators. For me they function to show trend and S/R and act as reference. Even then I'm just looking for an edge. S/R can always be broken by any big trader, who chooses to ignore the line and send the market into a tizzy. Price action is no holy grail either.
  • #39
  • May 1, 2007 1:31pm May 1, 2007 1:31pm
Quoting bluebuddha

I did this a couple of years ago and came to the realization that all the indicators are almost the same thing. The reason why TA doesn't work is that instead of understanding what these indicators are and how they work and don't work, everyone spends too much time trying to tweak them to become the perfect indicator. This is as absurd as buying a brand new car, and knowing nothing about auto repair, taking out some random parts, and slapping in new random parts, and expecting to win the next Daytona 500.
That's because all indicators are based off MAs. Look into the metatrader code of each of them and you'll see.
  • #40
  • May 1, 2007 1:49pm May 1, 2007 1:49pm
Quoting aicccia
That's because all indicators are based off MAs. Look into the metatrader code of each of them and you'll see.
but thats only >way< to analyze mathematical pattern to see how it behaved behour? why it is it sounding so bad? it can be great tool if used right.

the intrest what have come during the time of fundamentals. as more market data have come available and people seek to understand this phenomen as an pattern what have charasteristic of chaotic behavour.

dont blame indicators if the user is only intrested how to press the buttons without studying why this phenomen is happening. andhow this is reflected on non-linear science.

whole idea between fundamentals and technicals is blurred becous 80% traders dont know what is exacly fundamental and tehnical analysis to the end.

is fundamentals that you look from FF dayly news calendar and deside that numbers comes up and what down. Or use indicator what was recommended to use variables 4, 8 and 12. and buy below 20 line? to be an tehnical analysist?
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