The Problem with Technical Analysis

[wallstreetwarrior87]

Why try to forecast based on numerical data of which we have no chance of understanding what it reflects?

Numbers don't move markets, people do. That is the reason to drop the numbers and focus on human nature. (To answer the question in the 1st paragraph on the opening post)

 

[wisefoolx]

Perhaps you should not have included Technical Analysis in the title of your thread. Then I wouldn't have posted here at all.

OOOOhh gosh , you not posting here , oooo my how terrible that would be.

 

[wisefoolx]

Why try to forecast based on numerical data of which we have no chance of understanding what it reflects?

Numbers don't move markets, people do. That is the reason to drop the numbers and focus on human nature. (To answer the question in the 1st paragraph on the opening post)

Again you keep going back to this cr*p and it will always be wrong ! Not interested in what " moves " anything.

its TA's calculation , hardly ever objective and almost always subjective which is the problem.

Reflect what ? Ghosts in your mirror , perhaps that of some long dead TA hero of yours ?

Whatever you say this will always be a truism: price forecast is about future prices which is a number and that is based on time, another number. So numerical forecast should always be based on numerical analysis (maths ) .

I can see you're a copy & paste job

 

[EnlightenedJoe]

Not interested in what " moves " anything.

This is why you can't trade, and too terrified to even try ? So the reason you lost your shirt gambling £5-£30 a point is because TA wasn't precise to the 5th decimal place ? You truly are a mickey mouse thinker.

 

[wallstreetwarrior87]

Again you keep going back to this cr*p and it will always be wrong ! Not interested in what " moves " anything.

its TA's calculation , hardly ever objective and almost always subjective which is the problem.

Reflect what ? Ghosts in your mirror , perhaps that of some long dead TA hero of yours ?

Whatever you say this will always be a truism: price forecast is about future prices which is a number and that is based on time, another number. So numerical forecast should always be based on numerical analysis (maths ) .

I can see you're a copy & paste job

You is well funny:cheesy:

Me tinks you is a wind up merchant.

Copy and paste my as*e.

You need to tink about the markets more, not waste time with forecasting.

You will be better trying to predict:cheesy:

07651226785. He is great at helping those with anger issues.

G/L with whatever you are trying to achieve.

 

[wisefoolx]

You is well funny:cheesy:

Me tinks you is a wind up merchant.

Copy and paste my as*e.

You need to tink about the markets more, not waste time with forecasting.

You will be better trying to predict:cheesy:

07651226785. He is great at helping those with anger issues.

G/L with whatever you are trying to achieve.

Oh dear, the trollers are really triggered aren't they ? They don't know their decimals and the difference between $1.00 and $100.0, they trade minnie mouse pennies and think they are Soros ! LOL. Obviously one of the 90 %. If they could " THINK " about what they were doing then they might get somewhere.

HAHAHA !

 

[mpups]

The problem with TA is simple, it's in its calculation, which is hardly ever objective and almost always subjective.

Let's take the old example of drawing trend lines...Solution: Use linear regression...

Now let's come to another bugbear of mine RSI. This is supposed to measure changes in the momentum...

So why is it calculated by this concoction:
RSI = 100 - (100 / 1+ RS)

hi WF, interesting thread..

im not sure where you are coming from here.. are you saying you are more of a systems trader using robots and don't like discretionary trading? (genuine question)

why does TA need to be objective? good teachers of the subject would not give you the impression that its objective, that wouldn't be accurate no

the calculation of RSI is maths, its objective, it measures what it measures. Who says its an objective measure of market momentum? not a good teacher of TA

 

[tomorton]

hi WF, interesting thread..

im not sure where you are coming from here.. are you saying you are more of a systems trader using robots and don't like discretionary trading? (genuine question)

why does TA need to be objective? good teachers of the subject would not give you the impression that its objective, that wouldn't be accurate no

the calculation of RSI is maths, its objective, it measures what it measures. Who says its an objective measure of market momentum? no good teacher of TA

Its a good try Kaeso to get to the heart of the argument but its not going to go anywhere.

Vehement critics of TA set it up as something which it is not, they set it up to do something which it cannot do. Then they can easily knock it down and say "Ha-ha, TA doesn't work and I've proved it!" Even highly reputable authors and organisations are guilty of this sort of trick. What they can then criticise is a TA method that no winning trader uses, so of course they can say it doesn't work.

TA's like any sort of tool - used wrongly it won't work, used correctly it will.

 

[mpups]

Its a good try Kaeso to get to the heart of the argument but its not going to go anywhere..

cheers :cheesy:

Vehement critics of TA set it up as something which it is not, they set it up to do something which it cannot do. Then they can easily knock it down and say "Ha-ha, TA doesn't work and I've proved it!" Even highly reputable authors and organisations are guilty of this sort of trick. What they can then criticise is a TA method that no winning trader uses, so of course they can say it doesn't work.
TA's like any sort of tool - used wrongly it won't work, used correctly it will.

youve seen this in some detail then, nicely put thanks

 

[wisefoolx]

hi WF, interesting thread..

No, not really , if it were you would not have misquoted me.

im not sure where you are coming from here.. are you saying you are more of a systems trader using robots and don't like discretionary trading? (genuine question)

You need to re-read original post, never saind anything about " robots ".

why does TA need to be objective? good teachers of the subject would not give you the impression that its objective, that wouldn't be accurate no

Once again, this has been dealt with but I will c&p if you insist:

A future price is a number in the future which is itself based on numbers. Therefore why should we not use the calculation of number to analyse prices (maths which is objective) ?

the calculation of RSI is maths, its objective, it measures what it measures. Who says its an objective measure of market momentum? not a good teacher of TA

Momentum is a concept well establish in physics and is calculated by p = m * v, where is p = momentum , m = mass and v = velocity.

What not use that instead of something concocted by Welles Wilder ?

 

[wisefoolx]

hi WF, interesting thread..

im not sure where you are coming from here.. are you saying you are more of a systems trader using robots and don't like discretionary trading? (genuine question)

why does TA need to be objective? good teachers of the subject would not give you the impression that its objective, that wouldn't be accurate no

the calculation of RSI is maths, its objective, it measures what it measures. Who says its an objective measure of market momentum? not a good teacher of TA

Its a good try Kaeso to get to the heart of the argument but its not going to go anywhere.

Vehement critics of TA set it up as something which it is not, they set it up to do something which it cannot do. Then they can easily knock it down and say "Ha-ha, TA doesn't work and I've proved it!" Even highly reputable authors and organisations are guilty of this sort of trick. What they can then criticise is a TA method that no winning trader uses, so of course they can say it doesn't work.

TA's like any sort of tool - used wrongly it won't work, used correctly it will.

Give me one quote where I have said " TA doesn't work " , don't put words in my mouth, thank you.

Tea leaves , crystal balls and even TA may work .... so what ?

 

[wisefoolx]

cheers :cheesy:



youve seen this in some detail then, nicely put thanks

All the mutual glad handing and other kinds of handing won't hide the fact that you made up your mind on this topic even before I replied you, so what is the point of even asking me a question ?

The troller inside you is beginning to show.

 

[EnlightenedJoe]

Tea leaves , crystal balls and even TA may work .... so what ?

But it doesn't because you can't demonstrate it to work.

 

[barjon]

.........A future price is a number in the future which is itself based on numbers. Therefore why should we not use the calculation of number to analyse prices (maths which is objective) ?



Momentum is a concept well establish in physics and is calculated by p = m * v, where is p = momentum , m = mass and v = velocity...........

I'm assuming that you do want to discuss rather than just have us accept your assertion without question.

It seems to me that we are all looking for momentum but, so far as I know, there is no decent indicator like a speedo or rev counter to help us. Watching how price is moving is probably the best we've got.

I don't think any mathematical formula is going to help, particular since you'd be hard pressed to define the variables - what's "mass" for example. Furthermore, if price movement can be reduced to formulaic mathematics then the mathematicians would have had the market cracked long ago. There's no evidence that they have.

 

[wisefoolx]

I'm assuming that you do want to discuss rather than just have us accept your assertion without question.

It seems to me that we are all looking for momentum but, so far as I know, there is no decent indicator like a speedo or rev counter to help us. Watching how price is moving is probably the best we've got.

I don't think any mathematical formula is going to help, particular since you'd be hard pressed to define the variables - what's "mass" for example. Furthermore, if price movement can be reduced to formulaic mathematics then the mathematicians would have had the market cracked long ago. There's no evidence that they have.

It'd be a start. I wasn't going to say this publically but how about volume for mass... ? Mathematicians know maths but they don't know the markets , you need both. Also they tend to use statistics and not maths.

 

[wallstreetwarrior87]

Mass = volume
Volume = decision
Decision = Reason

There for, without an understanding of reason, volume (mass) = nothing of value.

Whether it be mathematical, objective, subjective.

 

[EnlightenedJoe]

Forget all this sh*t and just bet £30/point should get things moving in a jiffy. I guarantee it, and you won't have time for math after that.

 

[tomorton]

Give me one quote where I have said " TA doesn't work " , don't put words in my mouth, thank you.

Tea leaves , crystal balls and even TA may work .... so what ?

I refer back to the title of the thread and the first line of your opening post. You spent the bulk of that post criticising trend lines and RSI. I already said I agreed with reservations on the use of these two tools but you haven't gone on to explain in any depth how your approach works better.

As you so curtly said to me, "please re-read".

Obviously, your anti-TA bias is further revealed as you rank TA alongside tea leaves and crystal balls.

 

[barjon]

It'd be a start. I wasn't going to say this publically but how about volume for mass... ? Mathematicians know maths but they don't know the markets , you need both. Also they tend to use statistics and not maths.

Ok, so rate of change (?) of price (or some other definition) x volume = momentum. Mmmm, maybe.

For me, directional momentum is one way traffic - minimal pullbacks before charging off again. Therefore, I don't see volatile price as having any directional momentum even when it has changed hugely from 10am to 11am (or whatever period) during which time it may have hit the highs and lows several times. As DBP has it, price is continuous and that change would just be an accident of timing.

 

[mpups]

No, not really , if it were you would not have misquoted me. You need to re-read original post, never saind anything about " robots ". Once again, this has been dealt with but I will c&p if you insist: Momentum is a concept well establish in physics and is calculated by p = m * v, where is p = momentum , m = mass and v = velocity.What not use that instead of something concocted by Welles Wilder ? Give me one quote where I have said " TA doesn't work " , don't put words in my mouth, thank you.Tea leaves , crystal balls and even TA may work .... so what ?.All the mutual glad handing and other kinds of handing won't hide the fact that you made up your mind on this topic even before I replied you, so what is the point of even asking me a question ? The troller inside you is beginning to show

ok no actual answers to the questions just more confused babbling.. ill leave you to it