Does technical analysis work or not?

[EnlightenedJoe]

TA is not much more than curve fitting to the data, I believe

It's only curve fitting if it projects forward.

TA is good for assessing the past but people mistakenly believe it has predictive abilities, that the banks future behaviour is mechanical in nature and subject to control by the TA.

 

[dbphoenix]

But they are willing to buy. I can see people here banging the door down just to get a piece of the action. They'd get angry with me if I tell them it's a bad idea.

Typical retail buyers for financial assets are pretty dumb. All the bank has to do is to lift the price and people will be queuing up for it. This doesn't occur at Walmart, and this is the reason I use Walmart as an example. People should buy from the market in the same discerning way as they do at Walmart.

They're not always willing to buy in an auction market. If they were always willing to buy, price would never decline. Wal-Mart is irrelevant, as are banks. They are not auction markets. And this is supposed to be about trading.

Db

 

[EnlightenedJoe]

They're not always willing to buy in an auction market. If they were always willing to buy, price would never decline. Wal-Mart is irrelevant, as are banks. They are not auction markets. And this is supposed to be about trading.

Db

Banks are irrelevant for currencies ? Okie dokie.

 

[dbphoenix]

Banks are irrelevant for currencies ? Okie dokie.

The subject is how transactions are consummated on the auction market. Banks are of course pertinent. The examples you gave regarding banks are not.

Db

 

[EnlightenedJoe]

The subject is how transactions are consummated on the auction market. Banks are of course pertinent. The examples you gave regarding banks are not.

Db

How does this auction market relate to retail forex ?

 

[dbphoenix]

How does this auction market relate to retail forex ?

Supply and demand.

Db

 

[EnlightenedJoe]

Supply and demand.

Db

So you don't know where the auction is taking place ?

Well, retail forex is an OTC market, we buy from them like we buy from Walmart, over a counter of some sort.

This should give your more ideas, just a random article I found:

https://www.investmentlawgroup.com/a-new-era-of-regulation-for-the-otc-retail-forex-market/

 

[dbphoenix]

So you don't know where the auction is taking place ?

Well, retail forex is an OTC market, we buy from them like we buy from Walmart, over a counter of some sort.

The OTC market is an auction market. Wal-Mart is not.

Db

 

[EnlightenedJoe]

The OTC market is an auction market. Wal-Mart is not.

Db

Well Walmart's goods are supplied by people who had to bid for the privilege to supply them. So it's an auction market too.

So how those this auction help us ?

 

[dbphoenix]

Well Walmart's goods are supplied by people who had to bid for the privilege to supply them. So it's an auction market too.

So how those this auction help us ?

You really don't understand how auction markets work, do you, much less how the imbalances between supply and demand move prices?

Best of luck to you with your trading.

Db

 

[EnlightenedJoe]

You really don't understand how auction markets work, do you, much less how the imbalances between supply and demand move prices?

Best of luck to you with your trading.

Db

Thanks for the wish, but I don't need luck.

As I stated previously supply and demand does not move prices, inventory does.

 

[userque]

Thanks for the wish, but I don't need luck.

As I stated previously supply and demand does not move prices, inventory does.

Semantics.

 

[EnlightenedJoe]

Semantics.

No. His supply and demand can't be quantified. But the inventory can and it is specifically related to the operator of a market. Same way you can quantify Walmart's inventory by a quick peek at the back. What they have at the back is what determines the prices in the shop front. Same principle for all markets.

 

[darktone]

you sound like a man who thinks he knows something joe.

What you think about Oscars pic?

 

[EnlightenedJoe]

you sound like a man who thinks he knows something joe.

What you think about Oscars pic?

I know nothing about supply and demand since I don't even know where the auction is taking place. Maybe in a back room somewhere.

Cute cat.

As for the pic, nothing tells me where the inventory is at. Can't trade it.

 

[babyjake1961]

On Forex, the inventory of Euros traded for dollars and vice versa is virtually infinite. No shortage of either at any point - yet the price of Euros in dollars changes all the time.

 

[EnlightenedJoe]

On Forex, the inventory of Euros traded for dollars and vice versa is virtually infinite. No shortage of either at any point - yet the price of Euros in dollars changes all the time.

If the price doesn't fluctuate, there's no way to take out stops and make profits or to attract new suckers. So it moves because it is highly rewarding.

When people are paid to move prices, they will, and they won't care about supply and demand. The interesting question is: if they move the price and you don't pay them, what then ? Might they not get a bit confused ?

 

[babyjake1961]

How do they move it? By continuously transacting with each other merely for the sake of the fluctuations?

 

[EnlightenedJoe]

How do they move it? By continuously transacting with each other merely for the sake of the fluctuations?

Is it profitable ? If they can transact with themselves, there would be no real costs. From my observations, that appears to be the case.

Also price set by the market maker needn't be a transaction. They set the price cos they feel like it. The sucker who takes the price then makes it a reality. Nothing to stop the MM's chum to play a dumb sucker to get the ball rolling.

Precisely who is doing what is unknown, and it doesn't really matter. What does matter for anyone hoping to have a chance is that he needs to account for all possibilities the opposition is capable of. After a while it will be realised what they can do is only a limited set of actions.

 

[darktone]

I know nothing about supply and demand since I don't even know where the auction is taking place. Maybe in a back room somewhere.

Cute cat.

As for the pic, nothing tells me where the inventory is at. Can't trade it.

You get nothing from that pic? At all??

Whats this inventory stuff all about, can u explain in brief, as you would to a 10yr old.

Is it profitable ? If they can transact with themselves, there would be no real costs. From my observations, that appears to be the case.

Also price set by the market maker needn't be a transaction. They set the price cos they feel like it. The sucker who takes the price then makes it a reality. Nothing to stop the MM's chum to play a dumb sucker to get the ball rolling.

Precisely who is doing what is unknown, and it doesn't really matter. What does matter for anyone hoping to have a chance is that he needs to account for all possibilities the opposition is capable of. After a while it will be realised what they can do is only a limited set of actions.

That makes good sense to me joe. Also helps to know who the opposition is.