The Problem with Technical Analysis

[wisefoolx]

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.

That should be volume x velocity. To me, You can use any indicator for anything , it's your free choice but I would insist on objective calculations. So as for momentum indicators, we have been told by TA these are supposedly for range bound markets but we all can use it for whatever we like.

 

[wisefoolx]

Why is it that it's always mostly the same group of trollers going around and around trying to get attention ? It's destroying this forum.

 

[wisefoolx]

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

If you really wanted an answer you would have been respectful enough to read the entire article properly or at least try ask genuinely for clarification instead you did the the T thing.

 

[EnlightenedJoe]

To me, You can use any indicator for anything

Not really. You haven't been able to use anything at all (tea leaves, TA, or anything else) to make proven profit for instance.

 

[darktone]

 

[wisefoolx]

And what's wrong with estimate ?

 

[brewski1984]

In my opinion, TA doesn't work because numbers are meaningless.

 

[mpups]

You can use any indicator for anything , it's your free choice...

thats brilliant thanks:clap:

.. but I would insist on objective calculations...

how about this one for RSI:

RSI = 100 - (100 / 1+ RS)

?

 

[wisefoolx]

RSI = 100 - (100 / 1+ RS)

Where RS = Average of x days\' up closes / Average of x days\' down closes

This has no foundation in any concept in hard science and has been plucked out of the air or even other places by Welles Wilder. It is thoroughly unobjective and totally subjective. What true value does it have ?

Solution : Use equations based on proven hard science concepts.

 

[EnlightenedJoe]

Solution : Use equations based on proven hard science concepts.

You cannot use it to demonstrate a profit. The solution is useless.

 

[mpups]

RSI.. is thoroughly unobjective and totally subjective

RSI is objectively this: 100 - 100 / (1 + RS)

What true value does it have ?

RSI values range from 0 to 100

Solution: Use equations based on proven hard science concepts.

i think you are taking the word momentum too literally

 

[tokyojoe]

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.

haha like it, been there

There is only momentum days at the end of the day, grinding chop days are to be avoided, recognising a decent flow day is the only way to make a pound these days, the consistent large 500 point + swing days seem a thing of the past.

 

[wisefoolx]

RSI is objectively this: 100 - 100 / (1 + RS)



RSI values range from 0 to 100



i think you are taking the word momentum too literally

Momentum in Physics is a fact proven a million times over - in other words it is an objective standard of measure. Rsi is invented by wilder. I personally prefer to follow the objective laws of physics rather that some random idea.

But nothing to stop you using both if that's your cup of tea.

 

[EnlightenedJoe]

Momentum in Physics is a fact proven a million times over. Rsi is invented by wilder. I personally prefer to follow the laws of physics rather that some random idea.

Physics is irrelevant for trading. Trading is about economics. It's is about what your counterparty chooses to do with the £5-£30/point money that you hand over to them. Invariably it becomes their money for beginners who don't understand what the game is about.

 

[wisefoolx]

In my opinion, TA doesn't work because numbers are meaningless.

And I'm not necessarily disagreeing with that.

 

[barjon]

Momentum in Physics is a fact proven a million times over - in other words it is an objective standard of measure. Rsi is invented by wilder. I personally prefer to follow the objective laws of physics rather that some random idea.

But nothing to stop you using both if that's your cup of tea.

Momentum in physics is about the movement of physical bodies. Why should that have any relevance to something non-physical like the price of shares other than as a descriptive analogy?

 

[mpups]

Momentum in Physics is a fact proven a million times over - in other words it is an objective standard of measure. Rsi is invented by wilder. I personally prefer to follow the objective laws of physics rather that some random idea. But nothing to stop you using both if that's your cup of tea.

i currently don't look at RSI myself but if it interests me in future ill look at it again

ok so you use a physics equation of motion as an analogy to market movement, whatever floats your boat. if it works for you then that's great.

 

[wisefoolx]

i currently don't look at RSI myself but if it interests me in future ill look at it again

ok so you use a physics equation of motion as an analogy to market movement, whatever floats your boat. if it works for you then that's great.

Yes exactly , something that the trollers don't seem to want to get, as I play the copy and paste game with them. No one is putting a gun to anyone's head to use this or that indicator. We can do what we want.

But I prefer objective measures of standard not made up ones, at least as an addition to standard TA.

 

[wisefoolx]

Momentum in physics is about the movement of physical bodies. Why should that have any relevance to something non-physical like the price of shares other than as a descriptive analogy?

Welles Wilder seems to tell us the RSI is a measure of momentum, He is not saying it is anything else, but the only proven objective standard of measure is momentum in physics, not what he made up.

Though no one is forcing you not to believe him, however I would argue RSI is highly subjective. But whatever floats your boat. if it works for you then that's great

Also are you so sure movement of price is non physical ? Is it not a representation of the physical and physical as well, as least previously.

 

[EnlightenedJoe]

Also are you so sure movement of price is non physical ?

For the clueless, price movement is economical not physical. Lager your bet, the faster it move against you. This is why I like to see you put down £30/point. This will teach you some real anti-gravity physics.