Originally posted by: LegendKiller
Originally posted by: jjsole
I'm not going to argue that whatever you've read works, or if you ever applied it and its your fault for it not working. Like I said, I've never read any TA books nor used any known practices. I'd be the first to call support/resistance and shapes and lines etc. are BS.
Things I do are with movement over time and accel/decel. I doubt you have ever read anything about it in your efforts to prove TA is false, and for that matter I doubt it has ever been written about yet. It will be tho because its a critical factor.
Atleast you're acknowledging the sophisticated program trading uses a 'TA' approach, but to suggest they're too smart for everyone is naive again. They've only started to affect my results this year, and previously I was able to rely on their predictability to profit from. But having been successful for such a long time doesn't account for anything? Your head can't be that far up, can it?
I never read TA books either, I know through statistical studies of investment strategies and results, that TA (in the sense discussed in OP) is bullshit. I never did read about accel/decel.
Perhaps you're an aberration, perhaps you use more than just regular TA, perhaps you use far more sophisticated forms similar to what is used by the banks/prop traders or other high-end traders. That's fine because there's always something to account for smart people, or people who use TA+others.
People can, and most often do, fail at every other approach to investment management, which is why index funds are often the best solution. For Seemingly Random to compare them to savings account is stupid, especially when compared to TA, which has NO proven benefits by any proven statistically relevant study.
There are a lot of people that make money that have gone the more traditional TA route, so as long as that is the case, it can't be completely discounted (even if its very difficult find methods to apply successfully over time.) The ones that do find success over a long period of time don't take TA that they read in a book and apply it like a static signal to solve all their life's problems.
But all in all, there are two constants in analyzing stocks (or other instruments) in every TA approach...its historical prices, and time. So the ones that can put together successful methods will most likely understand what they are looking at, what time frames, and what additional 'TA tools' compliment or support their analysis of the so-called bigger picture.
I've always said I never use TA, but when they said if I 'use a moving average, then I use TA', I had to eat my words. It's that broad. I know TA is considered by many as BS, but it actually can be very foundationally sound at times.
For example, take a common signal term tossed around like "double top", suggesting a supposed reversal soon, supposedly identifiable thru looking a chart (from the correct direction, right side up, lol.)
That in itself is not just a catchy pattern, but is an indication of short term rate of change increasing and possibly accelerating, while longer term rate of change decreasing or decelerating (it is the 'valley' between the two 'peaks' that creates the lowered averaging of the longterm rate of change values, and thus a decreased rate of change or atleast deceleration of it that happens as a results.) This is an opportunity, or can definitely lead to one developing.
I highly suspect this TA pattern hasn't been quantified like this in books since I never hear anyone discussing it this way. However over time I've realized that what I might look and been trying to quantify mathematically has already been recognized in TA analysis, but simply not into an equation and published for the masses yet. Another TA term for that can be 'diversion', again a general term that few really understand mathematically, but is a very sound observational tool and significant in mathematically quantifying a so-called 'double-top' and the respective relationships of this movement.
3rd party software packages out there don't have strong or sophisticated analysis capabilities for this type of quantification tho. It is very data and calculation intensive, and most people are focused on a simple red light/green light approach with pre-fabbed "indicators", which is among other reasons a great reason why most fail.
Another thing I stumbled upon early that helped quite a bit is that it often doesn't matter where something goes as much as how it gets there, which is what I believe many sophisticated professional program trading algorithms focus on. That's why I've always considered "support and resistance" to be BS because it doesn't account for this. However moving averages can be relevant when coupled with a more thorough analysis of movement over time.
Anyhow, those are thoughts about the subject, but I admitted earlier I'm not doing so well lately (atleast not for supporting a family/mortgage), and am definitely not a know-it-all who finds this an easy game (and make no mistake about it, it is nothing more than a game and of course its gambling.)
But it is a do-able one and I hope/expect to make it work...if for no other reason, so people like you, no offense, can't ever say "I told you so."