Singapore Entrepreneurs Network & Startup Organization

This is a continuation from an obscure thread buried inside
http://www.projectsenso.com/index.php?name=PNphpBB2&file=viewtopic&p=2624&highlight=#2624



Let's focus on TA alone for now.

To save time and space, let's go straight into the exact evidence instead of further cross-fishing.

My due diligence into TA has yielded me good third party empirical results showing what TA can and cannot do, both facts and myths!

A reliable empirical test on TA is one where you conduct hundred thousands of test cases and beyond, but certainly not just a few hundred cases.

>My main disgust is not with TA but rather the amount of crap spilled forth
>by TA users who are simply too lazy or too naive to do some backtesting >work.

This statement is fair but harsh. In my opinion, TA newbies are certainly better than people who dabble into stocks based on the herd mentality or worse, recommendations from their stock broker - you and I know why. Furthermore, as the wise sayings goes "The journey of a thousand miles begins with one step.". No worries newbies, you will eventually reach your thousand mile! The journey will be tough and most likely expensive but I know that it is worth the while, just remember to *pay it forward* when you reach there.

CC, note that you are changing your stand now... in the previous threads, you claimed that TA is stupid, now you say that TA users are lazy, naive, etc. Anyway, It's now clear to me where you are coming from , so let's move on from here to a constructive conclusion.

Ok, now that I've stated my case where I have empirical results to back up TA's reliability or unreliability. What about you? Wealth Labs and Tradestations are just software tools, I'm interested in TA's actual results (with hundred thousands of test cases and beyond),

Do you have it OR do you not have it? If you have it, 'show us the money' and I'll show you mine. Let's put our credibility publicly on the line here!

PS: You could be (1) direct in your reply or (2) indirect and thus unnecessarily dragging this discussion on. Your choice.

Whats wrong with that?

TA = technical analysis used to "predict the market" or "guage market direction" or "give higher chance on entry" or "make your aim more accurate".

I think TA is stupid and that most but not all TA users are lazy, naive, etc.

Happy now?



Good for you! One less person using stupid "TA techniques".



10,000 trades are about enough actually.



Nice trick attempting to trick me into giving you free due dilligence research. Since you refuse to share yours in the Walton thread, I don't see why I should share mine.

Sure. Will be happy to share.

As part of public record, I've compiled extracts and references to empirical results of TA from the research work of 3 authors (TB, JK and DM) - from two independent publications. The compilation is in a single jpg file and has already been uploaded to a web server. Will reveal the url in days to come.

Filename: TA-EmpiricalResults.jpg
Filesize: 276,575 bytes
Date stamp: 14-Oct-2005
Time stamp: 22:16

Stay tune. Hopefully, those who are sincere in contributing to genuine financial literacy will do so without hurting others.

In the mean time, am hoping to hear from TommyShi who is seemly also passionate and professional about TA and possibly knows how to use it.
Reference: http://www.projectsenso.com/PNphpBB2-viewtopic-t-290.html

Anyway to lighten up the mood, watch this video. Hilarious!
http://www.viknluda.com/foe/video/

Well i started off using indicators too. However i don't find them effective after a while. Simply because i always seem to receive contrasting signals with different indicators. Nowadays, i just look at RSI, MACD and stochastic. But i don't take it too seriously. Candlestick provides a good clarity. But i find that you cannot use it alone on its own to predict the market. After reading the book, "The successful investor:what 80 million people need to know to invest profitably and avoid big losses" by William O'Neil,the founder of CANSLIM method, i realised that reading a chart just based on price and volume is so much more effective in predicting the trend in the short to medium term. Everything is so much clearer. If you are a serious trader, you may want to consider getting the book. For me, i'm more of a long term investor, so i just read for general knowledge and get a broader picture.



The book i mentioned teaches you how to look out for signs of institutional buying and selling. A recent example of a stock showing signs of accumulation by the big players is GlobalVoice. Quite obvious signs actually.



Ok since your are US-based, all the more, CANSLIM is relevant for you. Heard of Investor Business Daily? The founder is none other than William O'Neil himself. It's US based. You can subscribe to this service to look at stocks that fits the CANSLIM criteria. As far as i know, there is no mechanical stock screener that is sorely based on CANSLIM. The IBD website is good enough if you want to learn more. Do visit www.investors.com
You can learn more about the method under the "how to invest" section. Good luck!

Anyway i'm not an expert on TA lah. Just like to apply the chart reading techniques i learnt in the book, and so far, i must say i'm plesantly surprised to find that so far, everything has been fairly accurate. Good enough for me. But as i mention in another thread, i'm yet to be convinced TA really works, as there are many articles of evidence of randomness out there. So i'm just keeping an open mind about this.

Woah, i'm glad i didn't post my research which are obtained from years of testing.

This is your "emprical results"?? Three books with questionable content and severe conflict of interests??? You're killing financial literacy.

Maybe you need to do some due dilligence first by reading this:
http://en.wikipedia.org/wiki/Efficient_market_hypothesis

Think about this carefully. If "empirical evidence" for TA can be found off the shelf in some trading books, why does Efficient Market Hypothesis still exists? Why is EMH in university syllabus? Why has entire departments in banks been setup to make money based on it?

If you think mathematicians and scientists are dumber than 3 commerical authors, maybe you should send your "findings" to the scientific community. You'll get a PhD if not the Nobel prize for solving a problem thats a couple hundred year old!

If you think you can get successful in trading following "tecniques" found in books, why do you think 90% of traders still fail? Why is it that YOU are not consistently making big money?

This is why doing due dilligence is so important! Newbies will come into this game thinking they can get rich by buying a book or paying a guru for his seminar. Then they do some due dilligence and realise that no one has been able to prove that TA work since hundreds of years ago and that 90% of traders fail.

 Carrotcake, since vision3001 has offered to share his, why not yours too? I'm sure everyone can make a good judgement call on which set of evidence carry heavier weight. Even if the other is not, we can still gain something out of it. The effectiveness of 'TA' has been debated for god-knows-when. However millions out there still relies on it. Big institutional traders for the likes of Morgan Stanley, Goldman Sachs and others included. In fact, even in universities, there are courses covering area in technical analysis. So i wouldn't completely wash it away just like that, though personally i'm not a big TA fan. With your sharing, we all can only benefit. Your credibility will be enhanced too, and much appreciated.

I did.

I already showed him how he could have tested ANY TA method to see if it really works.

You can do it too. Get Tradestation, Wealthlabs or Amibroker. Test any TA method you think works.

It so straight forward and clear cut.



Strongly Disagree

There are no university courses covering areas in TA. Millions don't rely on it.

Big institutions run departments where the basic assumption is that TA doesn't work. Universities run courses where they teach that TA doesn't work.

Seriously, TA isn't mainstream. Its like an unordothox "yet to be proven" part of finance. The "debate" between TA and non-TA is so lopesided against TA that you'll start asking why are people still into TA.

jag82,

why not you do some testing and try to see from another perspective first? be the impartial third party judge.

Find a TA method that supposedly works. Test it over 10-20 years of data. Come back and tell us the results.

Simple as that. I think practical actions is the best way to show that TA is crap.