in defense of technical analysis - page 2.

Richy_T

legendary

Activity: 2576

Merit: 2267

1RichyTrEwPYjZSeAYxeiFBNnKC9UjC5k

Quote from: stillfire on March 08, 2013, 10:58:14 AM

So rather than shooting for a "controlled and verified" test, perhaps just taking a statistical sampling of the average success rate of TA traders versus the norm could be a reasonable test. Setting such a study up would require finding a large group of traders willing to be studied though.

You could test with play money to see how TA would work for investors not big enough to (significantly) affect the market. TA probably isn't as applicable to the big players anyway as they will be adopting more active strategies.

stillfire

full member

Activity: 124

Merit: 101

Quote from: Ichthyo on March 06, 2013, 10:24:05 PM

And (2) we need to execute that method under controlled and verifiable conditions and yield a significant score of prediction.

To show that TA works I don't think "controlled and verified" conditions would be a feasible experiment. You'd have to round up every Bitcoin trader in the world and somehow control them, because they are the "conditions".

When executing an experiment itself affects the outcome of future attempts of the same experiment, that experiment is not very valuable. For instance, let us assume there was something to TA and we could identify the patterns we wanted to test.

If we ran many "controlled" experiments with real money, other traders would react by changing their strategy to take our particularly rigorous and predictable behaviour into account. If we ran the tests with play money we'd lose the vital component of how the trader's own actions affect the market.

So rather than shooting for a "controlled and verified" test, perhaps just taking a statistical sampling of the average success rate of TA traders versus the norm could be a reasonable test. Setting such a study up would require finding a large group of traders willing to be studied though.

BitcoinAshley

sr. member

Activity: 448

Merit: 250

Quote from: Puppet

...reversing Alepo's predictions so far has demonstrated a statistically higher chance of paying off than throwing dice.

Pretty much, this.

ITT: Someone who's very bad at technical analysis, so bad that virtually all of his predictions have been dead wrong - tries to prove to us the virtues of TA.

Now, Arepo, I have no doubt that somewhere in the world, hidden in a mahogany-trimmed office full of computer screens with charts and books about fractals and logarithms, there are a few geniuses who manage to make significant profits off of TA.

You ain't one of those guys ;-)

And you can argue the virtues of TA all you want but where are the results, bro?

Some people say "Judge by results, not theory." I think we should judge by both results AND theory. But right now I haven't seen enough results to make me even remotely interested in spending 6 months studying the theory so that I can be as bad as you at it. If the learning curve is incredibly steep just to be worse than a dice at predicting the market, and we are struggling to come up with even a couple names who have used TA to attain anywhere near the wealth of the value investors in the top wealth brackets, well... good luck trying to "prove" your system.

Puppet

legendary

Activity: 980

Merit: 1040

Quote from: KTE on March 07, 2013, 05:04:12 PM

What the hell arepo?

Why do you talk about the difficulty of disproving TA, when you provide nothing to prove it.

There is his prediction track record. I just browsed his posting history. Some semi random quotes. Note the date, and if you have any doubt, look up the charts:

Quote from: arepo on December 25, 2012, 08:15:00 AM

merry christmas to all, and to bitcoin's value, goodnight.

i'm targeting $12.50 before a bullish correction to $12.85 and then only down from there...

short term targets: $13.00, $13.10, $12.85, in order

Quote from: arepo on January 26, 2013, 05:16:22 PM

the smaller picture you mean.

right now we're bouncing off of the 61.8% mark from the low of $15.63 to yesterday's peak of $17.81.

unless we break through there is no way but down.

clear consolidating market making new lows in the ADX

Quote from: arepo on February 14, 2013, 10:42:00 PM

Quote from: theymos on February 14, 2013, 10:05:31 PM

I'd buy, but I'm out of USD. Sad

you and all of the other irrational bulls. ready for the squeeeeeze

Quote from: arepo on February 14, 2013, 03:14:50 AM

down we go

Quote from: arepo on February 17, 2013, 04:45:55 PM

yes, i suspect that this move is far from over and that the 'real' correction is starting. we should settle into a downtrend and continue until we bounce off of a strong support like $21.

...
i called down. the next move was down.

etc, etc. And yet bitcoin doubled and tripled during this period despite his endless strings of predictions of imminent crashes, bulltraps and what not.
Proof enough for me that reversing Alepo's predictions so far has demonstrated a statistically higher chance of paying off than throwing dice.

KTE

member

Activity: 69

Merit: 10

What the hell arepo?

Why do you talk about the difficulty of disproving TA, when you provide nothing to prove it.

That's like the classic argument for religion, "you can't disprove god doesn't exist". Then again, I guess TA does require blind faith as well.

nanopene

newbie

Activity: 49

Merit: 0

Quote from: ineededausername on March 07, 2013, 10:08:48 AM

Quote from: nanopene on March 06, 2013, 09:17:32 PM

Lets talk about empiricism, lets talk about real world cases of people who became filthy rich by doing only Technical Analysis.
How many TA do you find among the Forbes richest people?
So, far I find... lets see... one, two... NONE!

Lets see those who followed the value investing methods proposed by Ben Graham and David Dodd... how about their direct disciple Warren Buffet? Then followed by Carlos Slim, Li Ka-shing, David Koch, Charles Koch.
Value investing was born as a direct response against the chart reading, which is as effective as any pseudo-scientific school.

Investing is investing if you invest. Swallow that truism.
Also, data without context is meaningless.

PS: Oh, btw, don't exclude "elliot waves" as more prone to apophenia, we are prone to anything and everyone as long as we have human brains.

http://en.wikipedia.org/wiki/James_Harris_Simons is pretty rich.... from advanced quantitative trading techniques.

First of all, you chose a wrong example, he doesn't use TA to manage his hedge fund.

Richy_T

legendary

Activity: 2576

Merit: 2267

1RichyTrEwPYjZSeAYxeiFBNnKC9UjC5k

Quote from: humanitee on March 07, 2013, 02:09:02 PM

Quote from: Richy_T on March 07, 2013, 02:06:40 PM

Quote from: gmiwenht on March 07, 2013, 01:45:49 PM

This thread is pretty pathetic. If this is really the sum total of what this forum has to offer in defense of technical analysis then it really paints it in a much worse light than I originally thought.

I'm sure it has its uses. The problem is, people tend to think "Look, something we can measure and fit a curve to, let's apply it to everything". You need to know what you're using, why it is what it is and if, why and how it applies to Y when it was derived from X.

If you want an example from a hard science outside the field, look at the black body radiation curve. Classical physics produced models that didn't match reality. Einstein came along and resolved the conflict by inventing the quantization of electromagnetic radiation. Just because something works in one scenario, doesn't mean it'll work in another.

Planck*

Planck assumed that the energy of the oscillators in the cavity was quantized, Einstein took it to the quantization of electromagnetic radiation. I did unfairly leave out Planck though so good observation.

humanitee

hero member

Activity: 1302

Merit: 502

Quote from: Richy_T on March 07, 2013, 02:06:40 PM

Quote from: gmiwenht on March 07, 2013, 01:45:49 PM

This thread is pretty pathetic. If this is really the sum total of what this forum has to offer in defense of technical analysis then it really paints it in a much worse light than I originally thought.

I'm sure it has its uses. The problem is, people tend to think "Look, something we can measure and fit a curve to, let's apply it to everything". You need to know what you're using, why it is what it is and if, why and how it applies to Y when it was derived from X.

If you want an example from a hard science outside the field, look at the black body radiation curve. Classical physics produced models that didn't match reality. Einstein came along and resolved the conflict by inventing the quantization of electromagnetic radiation. Just because something works in one scenario, doesn't mean it'll work in another.

Planck*

Richy_T

legendary

Activity: 2576

Merit: 2267

1RichyTrEwPYjZSeAYxeiFBNnKC9UjC5k

Quote from: gmiwenht on March 07, 2013, 01:45:49 PM

This thread is pretty pathetic. If this is really the sum total of what this forum has to offer in defense of technical analysis then it really paints it in a much worse light than I originally thought.

I'm sure it has its uses. The problem is, people tend to think "Look, something we can measure and fit a curve to, let's apply it to everything". You need to know what you're using, why it is what it is and if, why and how it applies to Y when it was derived from X.

If you want an example from a hard science outside the field, look at the black body radiation curve. Classical physics produced models that didn't match reality. Einstein came along and resolved the conflict by inventing the quantization of electromagnetic radiation. Just because something works in one scenario, doesn't mean it'll work in another.

gmiwenht

member

Activity: 115

Merit: 10

This thread is pretty pathetic. If this is really the sum total of what this forum has to offer in defense of technical analysis then it really paints it in a much worse light than I originally thought.

Richy_T

legendary

Activity: 2576

Merit: 2267

1RichyTrEwPYjZSeAYxeiFBNnKC9UjC5k

Quote from: ineededausername on March 07, 2013, 10:08:48 AM

http://en.wikipedia.org/wiki/James_Harris_Simons is pretty rich.... from advanced quantitative trading techniques.

Maybe, maybe not...
http://en.wikipedia.org/wiki/Survivorship_bias

ineededausername

hero member

Activity: 784

Merit: 1000

bitcoin hundred-aire

Quote from: nanopene on March 06, 2013, 09:17:32 PM

Lets talk about empiricism, lets talk about real world cases of people who became filthy rich by doing only Technical Analysis.
How many TA do you find among the Forbes richest people?
So, far I find... lets see... one, two... NONE!

Lets see those who followed the value investing methods proposed by Ben Graham and David Dodd... how about their direct disciple Warren Buffet? Then followed by Carlos Slim, Li Ka-shing, David Koch, Charles Koch.
Value investing was born as a direct response against the chart reading, which is as effective as any pseudo-scientific school.

Investing is investing if you invest. Swallow that truism.
Also, data without context is meaningless.

PS: Oh, btw, don't exclude "elliot waves" as more prone to apophenia, we are prone to anything and everyone as long as we have human brains.

http://en.wikipedia.org/wiki/James_Harris_Simons is pretty rich.... from advanced quantitative trading techniques.

Puppet

legendary

Activity: 980

Merit: 1040

Quote from: nanopene on March 06, 2013, 11:57:05 PM

Who's TA have expected the price to jump again to $42 after that crazy drop?

Nostradamus' did.

Quote

At five and forty ~~degrees~~ dollar, the sky will burn,
Fire approaches the great new city,
Immediately a huge, scattered flame leaps up,
When they want to have verification from the Normans.

Those at ease will suddenly be cast down
The world put into trouble by three brothers,
The enemies will seize the marine city,
Famine, fire, blood, plague, all evils doubled.

Two times put high, two times put low,
The East also the West will weaken:
Its adversary after several battles,
Driven out by sea will fail at the time of need..

Quite obvious and much less open to interpretation that all that TA nonsense.

humanitee

hero member

Activity: 1302

Merit: 502

CHECKMATE BULLS

prof7bit

hero member

Activity: 938

Merit: 500

https://youengine.io/

I love chart patterns. I don't use any other technical indicators, only patterns. This pattern (yesterday) has the potential to indicate a spike to 55$ (next few days, maybe even today!).

piramida

legendary

Activity: 1176

Merit: 1010

Borsche

As long as we run above 32, this ain't no reversal. If it goes below that, to 29 at least, then maybe it could reach 22. But I still don't believe that, my voodoo charts analysis tells me it's just slowing down of pace, which been craaaaazy for a couple of days there. Back to a comfortable 1% per day growth for us.

Dargo

legendary

Activity: 1820

Merit: 1000

Well, that "crazy drop" bounced exactly off the 20 day EMA, which has been tested several times during this run, so by this measure the uptrend is still intact. "Support bounces" off of rising moving averages (i.e. for securities that are in a nice uptrend like Bitcoin is) is a very common set-up for technical traders, so this bounce is not at all unexpected from technical analysis. My two cents in this debate is that technical analysis does work, but you have to understand how to use it. My sense is that most people who claim it doesn't work don't know how to use it. It takes at least 6 months of intensive study to learn technical analysis, and that would be for someone who picks it up pretty quickly. However, it is also true that really good fundamental investors make more money than technical traders. But technical traders make bank too. Personally, I take the fact that we have bounced so hard off the 20 EMA as a sign that the bears shouldn't get too excited yet. I can't speak for the OP's analysis - not familiar with it, and I take the successful 20-day EMA test as more significant, though it hardly guarantees that we will go on to new highs from here.

nanopene

newbie

Activity: 49

Merit: 0

Quote from: omarabid on March 06, 2013, 11:38:41 PM

There is money in TA, and I guess the HFT in Wall-Street are not a myth and they DO make money (actually lots of it).

However, let's see the following: Can TA predict the Apple Stock growth? How can TA knows that Steve Jobs will make the iPhone and iPad?

It can't. Simple. and that's why Apple stock was almost dead in the first few years.

What TA can do is analyse past trends and try to predict future trends based on these past trends. This works on a very short period of time levels, and assuming that nothing changed.

For example, in the last bubble, there have been certainly a pattern to the quick raise and full. This bubble it might be similar or different. What TA bet, is that it's similar (or the analyst bet that his prediction based on his knowledge/skills will happen).

However, when it's a small market like Bitcoin (and a relatively long period) between the two bubbles, things have certainly changed (people holding the bitcoin wealth, the mentality of the new owners, past experience with the last bubble...) which mean there will be a different pattern.

Who's TA have expected the price to jump again to $42 after that crazy drop?

Everyone knows this will end somewhere in the bottom, unjustifiable high increases in BTC value with no accompanying economic value will certainly result in a burst.

If you are talking about HFT, it is algorithmic trading, not charting (TA). In HFT there are many strategies and factors weighted in that are beyond the capabilities nor interests of a charter. I can guarantee you that if you make a HFT software based solely on TA principles, you will lose all your capital in no time.

omarabid

full member

Activity: 133

Merit: 100

There is money in TA, and I guess the HFT in Wall-Street are not a myth and they DO make money (actually lots of it).

However, let's see the following: Can TA predict the Apple Stock growth? How can TA knows that Steve Jobs will make the iPhone and iPad?

It can't. Simple. and that's why Apple stock was almost dead in the first few years.

What TA can do is analyse past trends and try to predict future trends based on these past trends. This works on a very short period of time levels, and assuming that nothing changed.

For example, in the last bubble, there have been certainly a pattern to the quick raise and full. This bubble it might be similar or different. What TA bet, is that it's similar (or the analyst bet that his prediction based on his knowledge/skills will happen).

However, when it's a small market like Bitcoin (and a relatively long period) between the two bubbles, things have certainly changed (people holding the bitcoin wealth, the mentality of the new owners, past experience with the last bubble...) which mean there will be a different pattern.

Who's TA have expected the price to jump again to $42 after that crazy drop?

Everyone knows this will end somewhere in the bottom, unjustifiable high increases in BTC value with no accompanying economic value will certainly result in a burst.

bitcoinBull

legendary

Activity: 826

Merit: 1001

rippleFanatic

Quote from: arepo on March 06, 2013, 08:35:19 PM

let me also open with a well-defined hypothesis:
"Since there exist time-dependent autocorrelations in price data, past performance sometimes correlates with future results."

That's not a hypothesis. You have a premise "there exist autocorrelations", and then you restate that premise in the form of a definition. There is no inference/conclusion, so no hypothesis here.

Quote from: arepo on March 06, 2013, 08:35:19 PM

evidence against TA would be evidence that time-dependent autocorrelations do not exist in price data.

Of course there exists time-dependent autocorrelations in price data. Why else would people be buying on speculation? Because there's an upward channel going up, a (highly correlated) time-dependent autocorrelation. Pretty much everybody here loves TA, I don't know who you are talking about by making a general address to "TA nay-sayers". You should qualify it by bearish TA nay-sayers.

Quote from: arepo on March 06, 2013, 08:35:19 PM

do you see what i see?

I don't know, what do you see? Are you (again) calling the top, a reversal?

Topic: in defense of technical analysis - page 2. (Read 3743 times)