Technical analysis is total bunk. - page 2.

tripper22

full member

Activity: 188

Merit: 100

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

Quote from: KTE on February 17, 2013, 04:19:34 PM

Wait a minute, are you saying that today's brief dip was a correct call for the correction you predicted? I thought you said that the dip before the weekend was supposed to be smaller temporary dip and today we were supposed to have a real correction to a lower level.

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.

but tripper gave me very simple criteria:

Quote from: tripper22 on February 16, 2013, 10:23:46 PM

[snip]
Make some TA predictions in advance so we can be in awe of your future predicting abilities. It's easy, all you have to do is say up, down or trade in a range and there will be a good chance that you will pick the right one. 1 of 3. TA is bunk. If it's not, prove it.

i called down. the next move was down.

I am watching. If I am proven wrong I will admit it here in the forum. I believe that TA has no value and you believe that it does. My point in the earlier post was that it is easy to pick one of three options and have a good chance of being right. I respect that you will stand up for and explain why you think TA has value. I haven't followed your previous calls. Are you saying that your analysis is suggesting to you that we will have a correction to the $21.00 level? Can you explain how you have come to this conclusion?

arepo

sr. member

Activity: 448

Merit: 250

this statement is false

Quote from: KTE on February 17, 2013, 04:19:34 PM

Wait a minute, are you saying that today's brief dip was a correct call for the correction you predicted? I thought you said that the dip before the weekend was supposed to be smaller temporary dip and today we were supposed to have a real correction to a lower level.

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.

but tripper gave me very simple criteria:

Quote from: tripper22 on February 16, 2013, 10:23:46 PM

[snip]
Make some TA predictions in advance so we can be in awe of your future predicting abilities. It's easy, all you have to do is say up, down or trade in a range and there will be a good chance that you will pick the right one. 1 of 3. TA is bunk. If it's not, prove it.

i called down. the next move was down.

KTE

member

Activity: 69

Merit: 10

Wait a minute, are you saying that today's brief dip was a correct call for the correction you predicted? I thought you said that the dip before the weekend was supposed to be smaller temporary dip and today we were supposed to have a real correction to a lower level.

arepo

sr. member

Activity: 448

Merit: 250

this statement is false

Quote from: tripper22 on February 17, 2013, 01:29:44 PM

You have to do better than 1 correct call. Wink

In a previous post I said that there was a chance you could be correct. Let's see how your future calls pan out. I'm not holding my breath.

three. three correct calls. but i'm not holding my breath as far as winning you over because you've already demonstrated that you weren't actually looking for evidence and it won't affect your predetermined opinion anyway.

as for

Quote from: Nesetalis on February 17, 2013, 01:39:23 PM

Until that Analysis can tell you that such and such group is going to announce bitcoin tomorrow to a few million people... its always going to be imprecise. It is trying to predict an unpredictable path. To be able to predict it, you need every single datapoint involved with the situation, because all it takes is one single announcement, or one single guy deciding "today is the day I cash out." and it will throw everything completely off course.

However A technical analysis is great at plotting history.

i've already written a response for this:

Quote from: arepo on February 17, 2013, 11:31:33 AM

this is a terrible misconception that just about everyone has. charts are not meant to predict the influence of news, but rather make observations about market forces like the behavior of an asset that is overbought.

as price goes up, the incentive to take profit goes up. if an asset were incredibly overbought and an influx of new money began flowing into it, market forces may prevent the 'obvious' rally from happening because selling pressure would increase in proportion.

kind of like what is happening right now, in spite of the reddit announcement.

charts will never predict single movements by large actors, or anything like that, and no one is claiming that they have the power to.

Nesetalis

sr. member

Activity: 420

Merit: 250

Until that Analysis can tell you that such and such group is going to announce bitcoin tomorrow to a few million people... its always going to be imprecise. It is trying to predict an unpredictable path. To be able to predict it, you need every single datapoint involved with the situation, because all it takes is one single announcement, or one single guy deciding "today is the day I cash out." and it will throw everything completely off course.

However A technical analysis is great at plotting history.

tripper22

full member

Activity: 188

Merit: 100

Quote from: arepo on February 17, 2013, 12:05:19 PM

@OP

Quote from: arepo on February 16, 2013, 10:53:34 PM

Quote from: tripper22 on February 16, 2013, 10:23:46 PM

[snip]

Make some TA predictions in advance so we can be in awe of your future predicting abilities. It's easy, all you have to do is say up, down or trade in a range and there will be a good chance that you will pick the right one. 1 of 3. TA is bunk. If it's not, prove it.

[snip]

since my reputation is on the line...

this was a good one,

and this bearish divergence predicted the flattening of prices (=trading within a range, as opposed to continuing the trend).

and i may be wrong in my new call. but that doesn't disprove TA either. it obviously can't predict the future because markets are anti-inductive and some irrational or large players or big news events can add additional pressures to the underlying market forces. but the fact is, we're overdue for a correction. the indicators all agree.

and it's certainly better than 50/50 though, i can tell you that. you do need to understand stochastic calculus for that point, though.

also, are you going to respond to any of my points? do you understand the basic principle that momentum changes before price, at least?

i just want to thank you for the spectacular timing of this post. i can now add my most recent call to the above list. even if technical analysis is bullshit -- which it is not -- you really put your foot in your mouth with this one.

You have to do better than 1 correct call. Wink

In a previous post I said that there was a chance you could be correct. Let's see how your future calls pan out. I'm not holding my breath.

tripper22

full member

Activity: 188

Merit: 100

It's nice to see a lot of back and forth on this topic. I enjoy the reading all the varied opinions. Grin

Zangelbert Bingledack

legendary

Activity: 1036

Merit: 1000

Quote from: arepo on February 17, 2013, 12:06:21 PM

Quote from: Zangelbert Bingledack on February 17, 2013, 12:01:40 PM

TA ain't bunk, but there is also the maxim: "Just because something is true doesn't means it's always useful."

Provided you believe in Bitcoin's potential, trying to trade on volatility in this market, even with the advantage TA can provide, strikes me as incredibly piggish. 1000% growth every 18 months not good enough for ya? There's such a thing as being too smart for your own good.

holy hindsight bias, batman!

-facepalm-

Not hindsight: note the bolded text. If you're not investing because you think you'll be able to buy a house with a single bitcoin in the future, the statement doesn't apply to you.

arepo

sr. member

Activity: 448

Merit: 250

this statement is false

Quote from: Zangelbert Bingledack on February 17, 2013, 12:01:40 PM

TA ain't bunk, but there is also the maxim: "Just because something is true doesn't means it's always useful."

Provided you believe in Bitcoin's potential, trying to trade on volatility in this market, even with the advantage TA can provide, strikes me as incredibly piggish. 1000% growth every 18 months not good enough for ya? There's such a thing as being too smart for your own good.

holy hindsight bias, batman!

-facepalm-

arepo

sr. member

Activity: 448

Merit: 250

this statement is false

@OP

Quote from: arepo on February 16, 2013, 10:53:34 PM

Quote from: tripper22 on February 16, 2013, 10:23:46 PM

[snip]

Make some TA predictions in advance so we can be in awe of your future predicting abilities. It's easy, all you have to do is say up, down or trade in a range and there will be a good chance that you will pick the right one. 1 of 3. TA is bunk. If it's not, prove it.

[snip]

since my reputation is on the line...

this was a good one,

and this bearish divergence predicted the flattening of prices (=trading within a range, as opposed to continuing the trend).

and i may be wrong in my new call. but that doesn't disprove TA either. it obviously can't predict the future because markets are anti-inductive and some irrational or large players or big news events can add additional pressures to the underlying market forces. but the fact is, we're overdue for a correction. the indicators all agree.

and it's certainly better than 50/50 though, i can tell you that. you do need to understand stochastic calculus for that point, though.

also, are you going to respond to any of my points? do you understand the basic principle that momentum changes before price, at least?

i just want to thank you for the spectacular timing of this post. i can now add my most recent call to the above list. even if technical analysis is bullshit -- which it is not -- you really put your foot in your mouth with this one.

Zangelbert Bingledack

legendary

Activity: 1036

Merit: 1000

TA ain't bunk, but there is also the maxim: "Just because something is true doesn't means it's always useful."

Provided you believe in Bitcoin's potential, trying to trade on volatility in this market, even with the advantage TA can provide, strikes me as incredibly piggish. 1000% growth every 18 months not good enough for ya? There's such a thing as being too smart for your own good.

arepo

sr. member

Activity: 448

Merit: 250

this statement is false

Quote from: piramida on February 17, 2013, 07:49:49 AM

Yeah, TA is the same as a coin toss - but only if the coin would generate similar results for everybody tossing at the same time. So what Puppet said - instead of being 50% random, TA gives the edge of knowing when to enter / exit the market because of herd mentality, markets are all about herds actually.

Not always right, but even more than 50% is good enough.

technical analysis works in ways other than simple herd behavior. this point has been addressed in this thread already. in fact, the most objective comment is by far this one:

Quote from: ciphermonk on February 17, 2013, 02:10:52 AM

Technical analysis is based on one assumption: that there exists time-correlations in market prices.

If someone manages to formally prove the existence of these correlations, that would settle it for me.

I've seen very complex attempts at extracting these correlations, through artificial intelligence algorithms such as high-dimensional support vector methods. These algorithms can find extremely complex correlations in the data that would be very hard for us humans to grasp, or completely unintuitive. If these methods fail at detecting correlations, I have a hard time with the credibility of "toy functions" used in classical TA.

My 2 bitcents. I could be completely wrong and thats fine.

(note: finding correlations amounts to predicting the price better than random. Of course, random can be right sometimes, but it's predictive power is useless.)

i also added my own 2 cents about the relationship between technical analysis and calculus, which i believe is why it is effective.

xxjs

sr. member

Activity: 280

Merit: 250

TA promoters should be aware of the fact that the value of a bitcoin was zero from the time of genesis, so the appreciation of one bitcoin (in percent or fraction) is always infinite. You can therefore not go too far back in time with your formulas. Personally I think the crash of 2011 is not relevant any more, too much have changed.

KTE

member

Activity: 69

Merit: 10

Quote from: tripper22 on February 16, 2013, 01:36:57 PM

PRICE and only PRICE should dictate your actions as a trader.

I'm sorry but that's a ridiculous statement and unfortunately does show inexperience in financial analysis. Price is a completely arbitrary metric, and has zero effect on trading decisions. Market cap is what is relevant, and as a trader even that is only relevant if you can estimate the future perceived market cap of what you're trading.

piramida

legendary

Activity: 1176

Merit: 1010

Borsche

Yeah, TA is the same as a coin toss - but only if the coin would generate similar results for everybody tossing at the same time. So what Puppet said - instead of being 50% random, TA gives the edge of knowing when to enter / exit the market because of herd mentality, markets are all about herds actually.

Not always right, but even more than 50% is good enough.

Piper67

legendary

Activity: 1106

Merit: 1001

Even Proudhon is right twice a day... TA is just so much snake oil, as the number of unknown variables is greater than 1.

ciphermonk

newbie

Activity: 50

Merit: 0

Technical analysis is based on one assumption: that there exists time-correlations in market prices.

If someone manages to formally prove the existence of these correlations, that would settle it for me.

I've seen very complex attempts at extracting these correlations, through artificial intelligence algorithms such as high-dimensional support vector methods. These algorithms can find extremely complex correlations in the data that would be very hard for us humans to grasp, or completely unintuitive. If these methods fail at detecting correlations, I have a hard time with the credibility of "toy functions" used in classical TA.

My 2 bitcents. I could be completely wrong and thats fine.

(note: finding correlations amounts to predicting the price better than random. Of course, random can be right sometimes, but it's predictive power is useless.)

arepo

sr. member

Activity: 448

Merit: 250

this statement is false

i dont want to derail the thread. but let me clarify:

you suggested a formulation that might take a parameter like "number of large players". i am more in favor of a (mental) model of the price that looks like a taylor expansion and which acts like a polynomial with local minima and maxima that can be anticipated by tracking the derivative, or rate of change (price 'momentum' in trader terms). it wouldn't actually be a good method to try to model price as far as fitting of a curve.

in other words, it was merely an example to show that the idea of tracking the derivative of a much simpler polynomial can be applied to tracking the momentum of the 'price function'. a thought experiment, if you will.

notme

legendary

Activity: 1904

Merit: 1002

Quote from: arepo on February 16, 2013, 11:59:00 PM

Quote from: notme on February 16, 2013, 11:47:33 PM

If you're going past x^4 and you don't have a damn good reason you are overfitting. Why would you try to model price like that?

i wouldn't. i was contrasting a taylor expansion-style price estimator with a function that takes multiple parameters.

Can you give me an example of what a taylor expansion-style price estimator is? I understand taylor expansions, but I have no clue how to use that to "estimate price". I also don't see how building an equation to guess the price is not modeling the price, but maybe your example can clear that up too.

arepo

sr. member

Activity: 448

Merit: 250

this statement is false

Quote from: notme on February 16, 2013, 11:47:33 PM

If you're going past x^4 and you don't have a damn good reason you are overfitting. Why would you try to model price like that?

i wouldn't. i was contrasting a taylor expansion-style price estimator with a function that takes multiple parameters.

Topic: Technical analysis is total bunk. - page 2. (Read 8191 times)