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Is 90% of TA useless?

  • #21
  • Oct 23, 2010 8:21am Oct 23, 2010 8:21am
Quoting Razzle
David Aronson's book evidence based technical analysis
There are proper research and then there are wrong research.

I mean, how can you test something if you don't even know how to use it. If David Aronson was a successful trader, he wouldn't have approach his research in that approach. Heck, I could have told him that the results would be null in the beginning before he went on to do the testings.

If I told him to test the indicators in a different approach, he would get a different result. At least he did prove one thing that I agree with: when an indicator indicates buy or sell and you traded according to those signals, you will never make any money. I could have told him that in the first place. And then he would be confused on how I trade using indicators and very successful at it.
  • #22
  • Oct 23, 2010 8:52am Oct 23, 2010 8:52am
Quoting mahdiquant
Yes! I think that would be the easiest answer to the question, but I'm not sure if it is the most appropriate answer.
(tough crowd...)

It's the easiest and best answer, because the high rollers use the best (perhaps insider fundies or order flow) and a lot of TA tries to derive as closely as possible from what others know of their methods.
That's not to say doing this necessarily improves results.

It seems you're set on finding someone else's TA method and borrowing/learning it. It's a nature-nurture argument:
Go through all of the TA available now, learning each popular method by definition and at the same time looking for its variations and weaknesses.
Once you can refer to any of them, move on to making your own variations or to combining the popular ones' strengths.
Finally, specialize in one or a group of the popular methods and/or their variations and turn it around, that is, apply this method to the bigwigs' and to vastly simplify and standardize the data the method processes.

The 5% has probably gone down this road, eliminating most of TA into what they can work with. The 5% also likely has dynamite psychology and mm, which'd counterweight what they lack in technical edge.
  • #23
  • Oct 23, 2010 10:26am Oct 23, 2010 10:26am
Is 90% of TA useless?

So long as 90% of thinking and questions remain useless, then yes
  • #24
  • Oct 23, 2010 2:15pm Oct 23, 2010 2:15pm
Every single indicator has at least a 50% chance of being correct in any situation.

With that information alone, you should be well on your way. If that doesn't get the gears turning... well, you have more studying to do.

I am purely technical trade based and have gone 14/15 good trades for the last ones.

I am on what we call a winning streak. It will end soon enough, but that surely doesn't mean what I do doesn't work.

I expect no worse than a 50% win ratio. As long as that is in check... well, you should be able to figure it out.
  • #25
  • Oct 23, 2010 2:41pm Oct 23, 2010 2:41pm
If every indicator has 50% success rate, this doesn't mean using more indicators will increase the success rate...
  • #26
  • Oct 23, 2010 2:43pm Oct 23, 2010 2:43pm
And to answer the question of the thread itself.

90% of TA isn't useless, unless it's exclusively indicators.
  • #27
  • Oct 24, 2010 1:10am Oct 24, 2010 1:10am
So you mean other than indicators, other public TA concepts (Price Action, Candlesticks, S/R lines ... ) are useful to make profit.

But I have heard that traders must have an edge in this market. When could be edge for a trader then?
  • #28
  • Oct 24, 2010 7:33am Oct 24, 2010 7:33am
PRICE is the only technical indicator which does not LIE.

The super millionaire traders who swallows all the money in zero sum game are discretionary traders who take trades based on both left brain logical thinking + right brain intuition.

Trading is mystical because ultimately trades are taken on intuition. Intuition is as good as the training and experience it receives.

The day i discovered how money is made in trading using both left and right side of brain, i wanted to weep but controlled my emotions.

The tears were joyous expression of finally going in the right direction.

"The great irony of trading is that it is difficult precisely because it is so very simple."
  • #29
  • Edited 8:17am Oct 24, 2010 7:58am | Edited 8:17am
So if one person makes consistent profits using one MA and another loses using same ma is it the MA's fault the loser lost?

Just because someone can pickup a scalpel does not mean I am gonna let them cut my chest open with it.....

If a ball player can't hit a fast ball buying a new more expensive bat ain't gonna help....
Working with a hitting coach and learning to hit that fast ball is one solution....

jmo.
  • #30
  • Oct 24, 2010 9:04am Oct 24, 2010 9:04am
Quoting mahdiquant
So you mean other than indicators, other public TA concepts (Price Action, Candlesticks, S/R lines ... ) are useful to make profit.

But I have heard that traders must have an edge in this market. When could be edge for a trader then?
The broker has the edge.

Namely, the spread/commission.
Enter Signature
  • #31
  • Oct 24, 2010 9:30am Oct 24, 2010 9:30am
Quoting CrucialPoint
If David Aronson was a successful trader, he wouldn't have approach his research in that approach. Heck, I could have told him that the results would be null in the beginning before he went on to do the testings.
I agree 100%

David Aronson's knowledge of TA is practically non existant, and his ideas regarding strategy design are extremely weak.

HOWEVER, its the PROCESS thats of value, not his mis appliction of the process.

As I said, anyone stupid enough to believe that the book provides the answers is going to disapointed. To use TA you need experience, and you need to get creative and start thinking outside the box, and above all else, you need to stop reading weak idea's on forums !
  • #32
  • Oct 24, 2010 9:35am Oct 24, 2010 9:35am
Come on, they're not ALL weak ideas.
Enter Signature
  • #33
  • Oct 24, 2010 9:57am Oct 24, 2010 9:57am
Psychology plays a big role in trading, read: trading in the zone by mark douglas. He explains it quite well.
  • #34
  • Oct 24, 2010 10:14am Oct 24, 2010 10:14am
Quoting vosterfxandy
Come on, they're not ALL weak ideas.
Maybe I'm being a little harsh, it's possible that the idea's tested in the book where selected simply to demonstrate the principle without giving away an edge.

Still, there's something really unsettling about that book, I'm always left with the impression that the author really doesnt understand the nature of the problem that he's trying to solve. But it's still a great book.
  • #35
  • Oct 24, 2010 10:16am Oct 24, 2010 10:16am
Quoting Razzle
Maybe I'm being a little harsh, it's possible that the idea's tested in the book where selected simply to demonstrate the principle without giving away an edge.

Still, there's something really unsettling about that book, I'm always left with the impression that the author really doesnt understand the nature of the problem that he's trying to solve. But it's still a great book.

Agreed. TA works as much as it doesn't... it's in the hands of a holder.
  • #36
  • Oct 24, 2010 5:11pm Oct 24, 2010 5:11pm
Quoting Venice
Agreed. TA works as much as it doesn't... it's in the hands of a holder.
Hello everyone as it's my first post o the board


Reading this thread i came up to the conclusion - learn TA from the basics and try to use it in the trade but adjust it every time to the situation.

Am i wrong / correct?

Cheers
  • #37
  • Oct 24, 2010 6:49pm Oct 24, 2010 6:49pm
Quoting Razzle
Maybe I'm being a little harsh, it's possible that the idea's tested in the book where selected simply to demonstrate the principle without giving away an edge.

Still, there's something really unsettling about that book, I'm always left with the impression that the author really doesnt understand the nature of the problem that he's trying to solve. But it's still a great book.
I agree that the book has its flaws but the fundamental ideas are very accurate, the mindset required to become a successful trader is like no other and it is really all in your hands if and when you become a profitable trader. Learning or building a profitable strategy is not hard at all, but implementing one is where most traders fail.
  • #38
  • Oct 24, 2010 7:27pm Oct 24, 2010 7:27pm
Quoting mario83
Hello everyone as it's my first post o the board


Reading this thread i came up to the conclusion - learn TA from the basics and try to use it in the trade but adjust it every time to the situation.

Am i wrong / correct?

Cheers
I would say the best way to use TA is to use it consistently... the part you must understand is that it tells you different things at different times... you must learn and understand what the different scenarios are and what they are telling you.

So yes, and no. Yes to understanding that TA will tell you different things and react different, No to the fact that your reaction must be the same, consistent, if you will to what the TA is telling you.
  • #39
  • Oct 24, 2010 8:07pm Oct 24, 2010 8:07pm
Quoting mario83
Hello everyone as it's my first post o the board


Reading this thread i came up to the conclusion - learn TA from the basics and try to use it in the trade but adjust it every time to the situation.

Am i wrong / correct?

Cheers
Keep in mind, in every field of endeavor, there are professionals that have success down to a science. They have to. Their business, jobs and future growth depend on it. I'm not talking about traders who make a living -- the privateer; but large corporations / banks. From what I've been able to see, they use only 3 tools; price, volume and some benchmarking tool, which is, usually, a derivative of a MA.

Now, with all time, resources, money and graduate students; and if the above is true, you have to ask yourself why aren't the TA tools we normally see in these forums/our trading platforms being used.

So, next time you whip open your browser on some fx forum, see hundreds/thousands of threads, posts, and screenshots with unprofessional (level) indicators, remember you are looking at rank amateurs without one clue (present company included).
  • #40
  • Oct 25, 2010 6:21am Oct 25, 2010 6:21am
Quoting Razzle
I agree 100%

David Aronson's knowledge of TA is practically non existant, and his ideas regarding strategy design are extremely weak.

HOWEVER, its the PROCESS thats of value, not his mis appliction of the process.

As I said, anyone stupid enough to believe that the book provides the answers is going to disapointed. To use TA you need experience, and you need to get creative and start thinking outside the box, and above all else, you need to stop reading weak idea's on forums !

I absolutely agree! You might like Aronson's book if you're a statistics freak but for those who are unwilling to digest the painstakingly presented statistical concepts, little value can be derived from his book.
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