i don't know if i spelled charlitans right. i spelled it two different ways just to cover both possibilities
i don't know if i spelled charlitans right. i spelled it two different ways just to cover both possibilities
...ask Richard Dennis....
completely useless.
Get one of them to explain last friday, or the last several months.
Brawndo the thirst mutilator wrote:
Get one of them to explain last friday, or the last several months.
...and a bottom analyst can do any better?
We all have our lucky rabbits feet....
TA is very useful. Charts are documented human thoughts and activity at different price levels. How you chose to use those levels is your choice, but anyone who tells you charts are useful, doesn't trade for a living.
you c''ked it up twice!
There are 3 forms of market efficiency (paraphrasing):
1) weak form => past price movements tell you nothing
2) semi-strong form => all relevant public data is incorporated into stock prices
3) strong form => all public and non-public data is incorporated into stock prices
Academics are in almost 100% agreement that the market is weak form efficient => therefore technical analysis, momentum analysis, statistical analysis based on prior price movements has zero predictive value.
Most academics believe the market is semi-strong efficient for the most liquid / most followed stocks. In other words, you may be able to find an undervalued gem by researching publicly available information for small stocks (`` 250MM market cap), but you are unlikely to pick up something everyone else has missed in, say Microsoft.
Most academics believe the market is not strong form efficient =%% in other words, you can generate abnormal returns trading on inside information.
When used correctly, TA isn't used to make predictions. It's used to tell you what is going on now and filter out the noise. When combined with a good money management system it is a powerful tool when trading the markets.
Anyone who says they can tell you where the markets are going based on TA, fundamental analysis, or a crystal ball is either lying or self delusional.
Two good posts in a row....that is unusual.
both are actually wrong. It's charlatan. I only reply since you seem to want to know the correct spelling not to be a grammar nazi.
i like trees wrote:
i don't know if i spelled charlitans right. i spelled it two different ways just to cover both possibilities
erm wrote:
There are 3 forms of market efficiency (paraphrasing):
1) weak form => past price movements tell you nothing
2) semi-strong form => all relevant public data is incorporated into stock prices
3) strong form => all public and non-public data is incorporated into stock prices
Academics are in almost 100% agreement that the market is weak form efficient => therefore technical analysis, momentum analysis, statistical analysis based on prior price movements has zero predictive value.
Most academics believe the market is semi-strong efficient for the most liquid / most followed stocks. In other words, you may be able to find an undervalued gem by researching publicly available information for small stocks (`` 250MM market cap), but you are unlikely to pick up something everyone else has missed in, say Microsoft.
Most academics believe the market is not strong form efficient =%% in other words, you can generate abnormal returns trading on inside information.
HAHAHA....Academics. Academics are not traders. I've traded with many academics with PhDs, Masters, multiples of both. They couldn't trade their way out of a f@cking paperbag. I can tell you TA is very valuable as far as where prices have been and important levels. I'm not saying it works everytime, but it improves my odds......been at this for 11 years. Ever see a trader trade without charts?? I haven't.
The most valuable thing I know of is information.....(Gordon Gekko).
Technical analysis sees everything 100% in hindsight and is 50/50 as a predictive tool. But, it is useful at EXTREMES, as yesterday's ridiculously oversold condition (we've had about four of those since late last year). At the end of the day, it all comes down to the trader. You may think exponential moving averages and stochastics and the like give you an edge or at least increase the probability of a given trade being right (like a hand in blackjack or poker really), but if you can't manage risk well and don't have an exit strategy that you're willing to execute, it's worthless. Moreover, all there really is is price and volume. Does volume confirm or not confirm price action? That's it. Technical analysis is simply myriad variations of that simple fact. But I don't ignore it.
I saw a recent academic study suggesting that past price movements were in fact THE BEST PREDICTOR of future price movements. So much for the claim about academics.
Study after study has shown that no one can predict the stock market. Fundamentalists and technical analysts are both full of it.
Nice post Sag. It does come down to risk management. I am a chartist, but I don't put stock in stochs, ADMs and such. Charts are human actions that you can see. I like trends and hop on those. When trends are working, add and press. If it's volatile, cut your size and work your risk. I don't need to be right 50% of the time. Hell, last year my winners were only 32%, losers 41%, and 28% were scratches.
TA is useful so long as there are sufficient momentum traders to exploit.
I certainly understand the academic argument against it, but I *cannot* argue with RESULTS:
TA 1-, 3-, 5-, 10-yr returns (annualized), respectively:
1.8%, 4.2%, 8.4%, 20.1%
Oh, and to Caveman:
Sure, I keep a well balanced portfolio, but my fortune (such as it is) was made in the tech bubble, when my TA account exceeded 500% return.
Sure, I agree: no one can predict the stock market. But my TA guy sure is doing a good job regardless!
It's 93% hogwash.
FWIW, Citigroup eliminated its entire staff of technical analysts in 2005, after coming to the same conclusion.
^^^^^^^ Then how do you trade??
webby wrote:
It's 93% hogwash.
FWIW, Citigroup eliminated its entire staff of technical analysts in 2005, after coming to the same conclusion.
93% eh? How do you arrive at that number? I'd put it at 50% myself, but it's worked well this year.
And FTR, webby, because you are always mischaracterizing my orientation toward the MARKET (not the economy), I do think we are merely kicking the can down the road and flows stay strong through the end of the year, if not into early next. That's actually been my market orientation for awhile, even as I've been selling on the way up.
But structurally speaking, we are simply filling in the cracks in the foundation, not fixing the subfloor or the house or the lot itself.