Technical Analysis
John
discussion centered around the validity of technical analysis, I
thought I would start a thread here where everyone could voice their
opinion.
Feel free to discuss TA in general or if you want to actually discuss
technical levels in the market or on individual stocks, that is fine
too.
Maybe we can get some lively discussion in here just like we had at our
last meeting. So have at it everyone!
John
Michael Catolico
i've been trading for over 20 years and have to admit that my first
forays into trading were based on reading a number of technical analysis
writers. i studied, modeled and absorbed 100s of these books and
methods. i never found the magical formula. none of this knowledge
helped me one bit in my actual trading. in fact i believe that TA
inhibited my ability to trade successfully.
why? it goes back to my original point. there has never been any
statistically sound reason for any TA method i've encountered. if any
TA tool actually worked, rationally it would be a very short lived
phenomenon since everyone would trade it (or the few that might know it
would grow so rich that they'd become the market). i've spent more time
than i care to admit testing and backtesting every quantifiable
oscillator , moving average, fibonnaci this, and point and figure that.
no system proved better than chance. i also tried pattern recognition
and my only conclusion is that these methods ultimately seem to be
rorschach-like confirmations of whatever my hopes or fears for the
market were at the time.
one further reason i don't like TA is that 90%+ of these methods are
designed to pick market entries. but where options are concerned, it is
clear that ANY entry is a negative expectancy event for a retail trader.
that means that all available opinions are already built into the prices
of options - whether those opinions are based on insider trading,
discounted cash flow analyses, or elliott wave theory. entry can be
accomplished just as effectively by throwing darts and flipping a coin
(in fact i recommend this method to help you learn how to trade - it at
least eliminates any bias that might cloud your judgment). trading
success has everything to do with what you do with the trade AFTER
entry. TA is mostly silent on the "what comes after entry " part of trading.
to me TA is too simplistic, arbitrary and unscientific. it gives the
illusion of mathematical rigor without the slightest grasp of
probability. it describes the markets just well enough to seem
legitimate but it does not explain anything and certainly has a dismal
record of prediction. it's more like astrology than astronomy.
some might object that prices are mostly or even entirely psychological
(i.e. value is a matter of perception vs. intrinsic quality). if this
is true, the argument goes, and a significant number of traders believe
something works - like a "support" or "resistance" level - then that
perception, though possibly delusional, will impact the market. thus
the presumption is that if a TA method is well known and believed then
it will be followed. my counter-argument is that this works only until
it doesn't. and then the problem becomes something of a next level
analysis in which you have to guess when the "momentum" of a particular
technical fad is going to bust.
anyway, like john, i too know a handful of long term successful traders
that swear by TA and, to a degree, i've heard the majority of traders
cite some TA influence at one point or another. but i am not convinced
that any of the TA tools any of these winners use has any material
benefit. it still comes down to trading. the proof: if it were the TA
method, they would simply have programmed some black box system to do
the work for them and have gone to live out a life of luxury on a
tropical island somewhere.
michael
John
said. Only now you get to be the bad guy instead of me. LOL.
I think another argument against TA is how it is possible for two
expert technicians to look at the same chart with the same indicators
and have two completely different outlooks. One of them sees the
indicators as bullish and the other as bearish. So which is it? How
can an indicator or chart pattern give out two completely different
forecasts?
But then I will hear someone say well, it's more an art then a science.
It all depends on how you look at it. Well what does that mean? If
that is true then what you are really saying is that your outlook is
completely subjective and that would defeat the purpose of TA.
The whole idea of having TA is to rid yourself of subjectivity and
emotion, not to create it.
I agree with you Mike on the aspect of getting rid of your bias. I
think having a bias is like a cancer. It just infects your ability to
think critically. My worst trades were because I had a bias that I
couldn't shake. I would manufacture reasons to stay in the trade.
When you don't have a bias it's much easier for you to go with the flow
and change directions.
Of course I am always open to hear arguments in favor of TA. I've just
never been able to hear anyone make a compelling case. The only thing
I can think of, is without TA, what would all these get rich seminars
sell to people? What about all the book sales, newsletters, and
advisory services. All would be gone without TA.
And if TA is so effective, why did Solomon Smith Barney fire their
entire TA staff citing they added no value to the firm. I mean surely
they could have kept one guy around, perhaps the star of the group.
But no, not one was found to have any redeeming value.
So do we have anyone on here that can make an argument for TA? Don't
be shy. I will listen with an open mind.
John
John
someone that can take the other side of the TA argument. I don't want
anyone to think this is a one sided argument. We must have some people
on this board that have had positive experiences with TA.
John
beze
gathering our thoughts in defense of Michael and your persuasive
arguements???
Hello all!
My name is Adam and I joined the group today and look forward to making
new trader friends and sharing ideas, mistakes and successes in an
effort to help us all trade better and have a some fun.
Now, in defense of TA!
It is helpful to think of TA in its simplist form and not get caught up
in the more esoteric hocus pocus crystal ball stuff. TA is simply
observation of mass psychology using REAL price action. As with
everything else in trading, it needs to be taken with a grain (or two)
of salt and is far from fool proof. But can't most of us make money by
being right only a little more than 50% of the time with good money
management? By comparison, if fundamental analysis is so reliable,
why are so called good analysts about as accurate as the local weather
man? TA is merely a set of tools that some are more proficient at
using then others. I dabble in woodcarving, but I am not good at it.
My tools could create masterpieces in the hands of a master carver, but
in my hands they only create firewood.
Imagine there is square in a place called Widgetville. In this square
people gather everyday to buy and sell widgets to each other. We want
to trade widgets too, but we are wise and decide to watch the people
trading these widgets before jumping into this market. What do we see?
Some days a lot of people come to the square to trade and other days,
most people just stay home with their widgets. Sometimes the smaller
traders go into the market and sell the few widgets they have while the
few bigger traders leave the market with pallets full of widget.
Sometimes the bigger traders bring in boat loads of widgets and the
little traders line up to buy them as fast as they can. Sometimes the
mayor of widgetville or the manager of the square whispers something
into the ears of the bigger traders. The mayor and the square manager
are too important to whisper anything into the ears of the small
traders. Some of the times, usually a few days after the bigger
traders buy up a bunch of widgets (trying not to be noticed in the
process), there is a story in the Widgetville Financial Times about
some event that makes everyone think that widgets will be worth more in
the near future. When this happens the little traders line up and try
to buy widgets, but the bigger traders don't want to sell that much so
the little traders offer more money for the widgets. The price goes up
and the little traders buy their widgets feeling good about their
investments because of the article they just read in the Widgetville
Financial Times and because the analyst on CNN told them it was a good
time to buy widgets. Do you think you could trade widgets better now
that you studied these small and big widget traders???
Enough fiction, here is a real world example in my wife's IRA (she
foolishly lets me trade it).
Analysis Data For 8/1/2005 - 9/1/2005
Trade Date Action Symbol/Desc. Qty Price Comm. Net Amount Gain/Loss
for symbol
KOMAG INC
08/26/2005 S Sell KOMG - KOMAG INC 100 $38.40 $14.95 $3,824.89
07/19/2005 S Buy KOMG - KOMAG INC 100 $34.14 $14.95 ($3,428.95) 395.94
Total Realized Gain/Loss for KOMG $395.94
Yes this is a stock transaction and we should be talking options. At
first you may think, big deal he made about 10% in 5 weeks. However,
it is after the trade that things get interesting. KOMG gapped down
yesterday closing at 33.45 That is 13% lower than when I sold it only
three trading days ago! Here is what the charts and indicators in my
TC 2005 told me: On 8/23 there was a candlestick pattern (hey you
fundamentalist laugh if you want, but candlesticks have worked for
thousands of years) called appropriately enough a "hanging man".
Hanging men can (but don't always) indicate an end of an uptrend. So
on 8/23 I was put on alert, but not wanting to react to a false signal
I decided to WAIT FOR CONFIRMATION. The next two days had black
candles (were down days) and the 2nd down day was on increasing volume
(the greater the volume, the louder the chart is talking to you). That
was my confirmation that the hanging man was indeed hung and I sold on
8/26. Look at the charts for yourself. I strongly recommend setting
the options for candles rather than bar charts, it is way easier to
visualize what is going on. What is really interesting if you have TC
2005 is the Balance of Power (BOP) indicator. BOP attempts to measure
the institutional money. The day before the gap down, BOP was modestly
positive. The day of the gap down, BOP is alarmingly negative. I will
bet someone my $10 September meeting fee that the news will follow the
chart in this case. When you run a mutual or big hedge fund, you can
call up the CFO and talk to him or her, I don't think they would take
my call so I will try to shadow the big/smart money. Incidentally, the
Zack's analyst still have KOMG as a buy.
I think the most skeptical of traders have to admit they can often see
resistance and support in most sideways moving stocks. TA methods very
often give of false signals, a key to using TA effectively is to wait
for the confirmation. You may get into the trade a little later than
ideal, but you will make many many less mistakes. For example when I
get a buy signal, I make my buy contigent on the next day's price
breaking the previous day's (the signal day) HIGH by .25c. I also will
not pay attention to signals on low volume. This keeps me out of a lot
of weak trades.
Hope to see you all in September.
Happy and profitable trading to all!
Adam
Michael Catolico
you raise some interesting issues. first of all, whatever vehicle we
trade, when we enter positions, by default we have some kind of
forecasting bias. with options every single trade can be viewed as a
either a bias on future price expectations and/or future volatility
expectations. how do we arrive at these perspectives? for some it is
based on fundamental macro or micro economic analyses. for others it is
based on technical features or pattern recognition. yet others merely
enter randomly with the expectation that future opportunities and
circumstances will modify the position.
from my point of view, if we use any kind of analysis (other than random
entry) there should be some kind of empirical basis for the decision.
with the amount of data available, it should be a simple task to collect
a statistically sound sample of whatever combination of conditions that
we care to devise. for instance, it should therefore be easy to gather a
large number of different examples that meet the specific criteria Adam
has introduced - hanging man candlestick, followed by two down days, 2nd
day accompanied by greater than normal volume - and test for returns.
that's all i ask of any theory (technical, fundamental, political,
spiritual or whatever): does it really work?
someone at that last meeting argued an often heard market "truism" that
head & shoulders tops are accurate predictors of market declines 70% of
the time. again all i ask is that someone provide the test data to
confirm or deny this. [though, as with all situations involving my
money, i will suspect that some theory is false until proven true.]
a second issue raised by Adam is the assumption that price and volume
data telegraph future price direction. this seems rational and logical
from the very basic notion that "smart" money has privileged
information prior to the rest of us. while it is indisputably true that
someone somewhere knows if a drug test is going well or not or which
firm is going to be awarded a big defense contract, it is not entirely
clear that those insiders will impact prices enough to show up on some
kind of TA radar detector. and if on the other hand the insider trading
is massive enough, there is no reason to expect that all the future
price movement isn't already reflected in the current price. further
when we are discussing options, the leverage that is implicit in them
makes any of this insider or smart money perspective rapidly apparent
and untradeable. again my question is can we prove that this information
can be detected and traded upon with anything better than random expectancy?
finally Adam underscores that the money management is critical to
success. it does no good to be right 65% of the time if our losses are
twice as big as our winners (.65*1-.35*2 = -.05 or an expected loss of
5% on every trade). so if TA (or any analysis tool) improves our chances
of being right it still has to be assessed for the magnitude of gains
and possible drawdowns which can come from that tool.
i'm all for any means that makes my trading decisions more objective
(i.e. less emotional) and improves my overall expectancy. but i still
want to look at facts and the testable reality behind the theory. i'd
love for someone to direct me to some research or on-line forum that
provides this kind of proof.
thanks again,
michael
Richard Pergler
John
made some very good points about TA and most of them are the common
ones I hear when people try to defend TA to me. Don't get me wrong,
there is no right or wrong answer and Mike did an excellent job of
saying what I would said. So I won't repeat what was already said.
However, as I talked about at our last meeting, one of the issues I
have with TA is the bias that it creates with traders. In other words,
I think traders that follow TA are less flexible. They tend to be very
stubborn and when they think they know where the market is going, they
don't deviate.
I'm a much more defensive trader. Very agile and very flexible. I
admit I am wrong about 98% of the time yet I still make money and that
is the way I like it. When I was younger and when I first started
trading, I was very much into the TA thing and also very much into
being right. Being right about the stock, the market, the economy. I
thought I had it all figured out and everyone else was stupid. Then I
realized, that even if I was right, it wasn't adding up to profits.
Remember, at the end of the day, all we care about is profits, not
being right. This is what I find is tough for Technicians to
understand. They live in a world where everything they do is based on
being right. I find that traders who trade that way never make money.
It's the traders that think the opposite that tend to be successful.
They work backwards, assume they are wrong all the time and take
appropriate action.
In my opinion, a trader's bias is what often gets him into the most
trouble. A bias is very hard to get rid of. Here you can test
yourself. How many of you would change your religious beliefs today
right now on a dime? Raise your hand. How about your political
beliefs? How about leaving your spouse right here, right now?
Anybody? See, it's hard. Now the reason most of you probably answered
no to all these questions, is probably because deep down inside, you
think you are right about your beliefs and you see no reason to change
them. This is why beliefs and biases can be so dangerous.
Oh yeah, I know it's all about high probability setups, I understand.
But your sub conscience does not think that way. It holds on to the
biases and doesn't let go. That's why so many of us behave and act
like and have the same beliefs as our parents. Because growing up, our
parents instilled a belief system into our sub conscience. We may not
know it's there, but it is. Now there is nothing wrong with having
beliefs about life and issues and what have you, but when it comes to
the market, it tends to be a liability.
Most of us when money is on the line, will make decisions that
detrimental to our financial well being. That's because we are
emotional creatures. Nothing we can do about that. This is why we
must take the emotion out of trading and we must not have a bias in the
market or pretend to know what the market is going to do.
Now when I say bias, I don't mean one can't lean long or short or setup
a position that performs more favorable to one side over the other, I
just mean don't get these thoughts in your head that you know where the
market or where the stock is going. When you say high probability set
up, you are basically telling me where the stock is going.
Richard, in response to your question, I trade like a tennis player. I
just hit the ball back. If I get an opportunity to put it away, I do.
And Steve, who I play tennis with in the group will tell you, that's
all the time. LOL. But if I were really serious about playing tennis,
my goal would not be to predict what my opponent was going to do, but
rather play off his weaknesses. I would try to be patient and when an
opportunity presents itself, I would try to put it way. I have no idea
what my opponent is going to do or how he is going to play, all I can
do is react. That's how I trade. I play defense. I put a market
neutral position on and play defense, just hit the ball back. And when
there is an opportunity to take a shot, I take it. This is probably
the best analogy I can give right now.
John
Richard Pergler
----- Original Message -----From: JohnSent: Thursday, September 01, 2005 2:01 PMSubject: Re: Technical Analysis
John
I'm not sure I understand the question. Are you asking me to define
TA? I look at charts all the time. I look at the charts the same way
I look at a 5 day weather forecast. I just want to have a general idea
of the weather. Are we talking 90's and high humidity or low 70's and
pleasant? I know it's not going to be right on 100%, but it gives me a
general idea.
I look at charts to get a general idea of what the ranges are in the
indexes and the stocks. I'm not really forecasting anything per se, I
just want to know what I have to play with. I also look at trend. Uh
oh, does that make me a technician? I hope not. LOL. Trend is very
simple and it doesn't require me to really make any predictions.
I use the old Okam's Razor precept, that all things being constant, the
simplest explanation is usually the right one. So if an index is in a
nice solid up trend, like it is now, then the path of least resistance
is probably higher. I'm not predicting it will go higher, just that is
the path of least resistance. So I might structure a position that
performs more favorable to a rally but also will allow me to do
something if the market goes lower.
I don't really consider looking at trends TA and most technicians seem
to agree with me. A trend is only useful in hindsight and also over
the correct time frame, of course we don't know what that time frame is
ahead of time.
I have to make a confession. Back in my TA days, my drug of choice in
the TA field was Bollinger Bands. I still like them actually.
Although I don't really use them to predict price action but more as a
way to look at volatility. Since Bollinger Bands measure volatility, I
felt they had some usefulness to options trading. I have studied all
of John Bollinger's work and he seems to have some pretty unique ideas
as to how to use them to predict price action. Of course, there is no
statistical evidence showing their effectiveness. Although I do think
they do a decent job of predicting volatility and at the very least
showing you a range that you can play with.
I kind of use them now for decoration. But I glance at them from time
to time especially in range bound markets. I understand your point
Richard about needing something to guide you so you figure you need to
use TA by default. But think about what I said earlier, you don't need
to bullish or bearish all the time, neutral is also an option. You
just might not feel as comfortable trading market neutral.
One thing I will promise you, once you take the bias and the emotion
out of your trading, i.e. removing directional predictions, you will
become much less frustrated by the markets. All my TA friends bitch
and moan about why there are no follow throughs on the selloffs and my
fundamental friends are bitching that this market should have crashed
by now after Hurricane Katrina, inflation worries, housing bubble
concerns, slowing earnings, etc... Both these groups just yell at
their computers all day and at CNBC thinking the market owes them
something, at least an explanation. But it doesn't. The market will
always know more then we do and no amount of analysis will put us ahead
of the market. All we can do is react to it. Remember, just hit the
ball back.
John
Richard Pergler
From: JohnSent: Thursday, September 01, 2005 3:51 PMSubject: Re: Technical Analysis
beze
am really enjoying this thread and the opportunity to have this
discussion with traders more experienced than I.
Regarding testing TA: Greg Morris in his book Candlestick Charting
Explained does indeed show the results of candlestick pattern testing
that was done. I haven't looked at the book in a while, but I think
what his point was was to show how much more reliable the patterns are
when they are coupled with certain indicator values. Also, the
Optionetics people are all over Elliot Waves now and the Profit Source
program. They were saying that the signals were something like 70%
reliable when in conjuction with certain oscilator values. So they or
the makers of Profit Source may have indeed done some testing (or
perhaps it was a guestimation of their experience). I recently
purchased Profit Source, when I get it I'll ask the customer support
people if there is any testing they can share with us. Having said
this, I too have thought it would be great if more testing of some TA
theories were done. However, I am less bothered by the lack of testing
than I used to be. For one, I am "less dumb" now than I was a year ago
and I owe it to TA. A year ago, I would have gotten nailed in the KOMG
trade I discussed (incidentally it went down another 1.38 today).
Secondly, there is a problem with what would be considered a failed
pattern. It was TA that got me into KOMG and it was TA that got me
out. So was my original bullish TA bias wrong? I would argue not and
that things changed. However, others may rightfully believe TA failed
me when I bought the stock. Thirdly, while at first blush it seems
like something that could easily be tested and perhaps so, I believe
experienced technicians could outperform the tests because they would
take several things into consideration and not weigh all those things
the same. The tests could not do that. Also, just like the good chess
players who claim they can "feel" the right move, very experienced
technicians probably have a big pattern database somewhere in their
subconcious.
What I would suggest is this: take your favorite stock or index or
whatever you like to trade and look at the past charts. And just see
if historically, when certain things occur do other things often (never
always) happen afterwords. For example, was there an uptrend 4 out of
the last 5 times there was a bullish stochastics crossover. Or did the
security continue to decline when the price dropped below the neckline
on the last head & shoulders. If you find some things that have a much
stronger correlation than coin toss
odds could we not expect those greater likelihoods to exist in the near
future. We also need to bear in mind that some indicators or more
reliable for some securities than others, etc.
John you described your experiences with technicians as them being
inflexible and not profitable. I would agree that their inflexibility
is what is killing their success. As you mentioned, it seems though
that this very significant and avoidable problem directly comes from a
desire to be right that greatly outweighs a desire to make money.
Consequently, I would argue it is not TA that fails these traders, but
their own stubborness. Perhaps we are in agreement here. As someone
once said about trading, "being wrong is not an option, but staying
wrong is". Mechanical exit rules are so much better, because we don't
have to wrestle with our ego when trades go against us. As you or
Michael implied, making money has more to do with cutting off your
losers than making a lot of winners.
John, I am curious as to how you trade. It sounds like you use delta
neutral strategies and adjust as things move around? Are you a
straddle player?
Thanks for all the input!
Adam
Margaret
Interesting discussion! I have placed delta neutral positions over the
last couple of years in an attempt to trade without TA and lost money
in the effort with fees compounding those losses. In fact while my TA
based directional trading has been net profitable (albeit stressful for
the need "to be right") my delta neutral trading has unfortunately
produced larger losses than I gained on directional trading. I am
sure this is due to lack of "know how" - but where can the retail
trader learn how to trade delta neutral successfully without TA? It is
a goal I would like to achieve as I spend many hours working on charts
and would love to reduce the stress levels!
A couple of years ago, we paid a few thousand for "options education"
on the understanding that it would teach us all we needed to know for
successful options trading to find we had pretty much only paid for
kindergarten level and that more courses costing several thousand each
would be required to follow through for more advanced options
techniques. We are now quite nervous at parting with money for courses
that may or may not be useful.
I have been following some of Mike's discussions on other boards
(thanks Mike!) which has been an eye opener into different
possibilities of delta neutral trading - and makes me realise that
there are probably better ways of trading options. Just not sure if
the retail trader can overcome the hurdle of fees should frequent
adjustments be required.
John, when you say "hitting the ball back" do you mean locking in
profits? What criteria would you be looking for to initiate a delta
neutral position? Do you feel a retail trader can overcome the cost
of fees should frequent adjustments be required?
Looking forward to your reply!
Margaret.
John
I'm am not a very big fan of delta neutral trading Margaret. Delta
neutral trading means you are making implicit volatility bets. I'm not
sure how that is easier then making directional bets. Speculation is
speculation no matter what form it takes. I do not trade that way
although a few years back I did give it the old college try. I didn't
like it. That's not to say it doesn't work, I just think that betting
on volatility is not easier then betting on direction.
People ask me all the time how I trade and I always get nervous that
when I answer this question, some will think this must be THE way to
trade. That I have exhausted all other methods and therefore the way I
trade now must be the correct way. This is not true. I trade the way
I do now because I am the most comfortable trading this way. It's very
agreeable with my personality.
I basically try to buy as much curvature as I can for as little as
possible. By curvature, I mean gamma. The idea is to buy this
curvature and finance it with the selling of other options. Once this
position is established I look to sell as much premium as humanly
possible against the long curvature that I own. I am not net short
contracts. Very important point. For those most part I do not have a
bias in direction. I sell when I can. For now I am trading mostly NDX
options. That is a very big contract but there is a tremendous amount
of edge in trading the NDX over the MNX and QQQQ's. This edge also is
apparent over equity options. Although the plan is to add NDX
components to the mix later down the road.
I'm sure there are going to be many questions asking for more details
about this. It's not that it's a secret or that I don't want to tell
people how I do this, it's just that I'm afraid the conversation could
go on for hours as there are a million ways to execute this strategy
and covering all of them would be exhausting.
But needless to say, it requires me to use no TA. It does require me
to have a very thorough understanding of option theory as well as the
ability to price theoretical values accurately down the road. This is
not that hard if you have decent option software. But you need to know
what you are doing. While the strategy itself is pretty conservative,
one could hurt themselves if they don't understand options.
Before I trade this way, I engaged in other strategies that were
similar albeit more risky. The less risky of the strategies I did were
simply butterfly variations. These were limited risk trades that
offered high payoffs in exchange for small debits.
I also engaged in pretty aggressive ratio spreading that DID involve
naked options. But the theme was similar, buy cheap options and
finance them with the sale of other options at higher strikes.
I also made a lot of volty skew trades that involved selling positive
skew straddles (ITM calls & OTM puts) with a stock position.
And another of my favorites, diagonal calendars, again same theme here.
Buy options, sell others to finance them, this time over different
strikes and different months. As you can see there is a theme here to
all these strategies. That is, I don't like owning premium
outright!!!!!!!
So I do what ever real estate investor does today, I finance
everything! The only thing that has changed over the last year or so
is that I have pulled in the risk some and not allowed myself to hold
naked contracts on my sheets. And when I did sell premium naked, my
one rule of thumb is never never never sell naked puts. Although my
straddle skew plays were an exception. Even though the put skews are
very very attractive, selling them to me was like injecting yourself
with a virus and hoping you don't get sick. No thanks.
I hope I didn't veer too off topic here. I guess it was only fair that
I reveal a little bit of what I do while talking down TA. LOL. I will
also add, that the way I trade today involves very little emotion. I
don't care where the market goes and none of these trades are going to
blow me out of the game. Like my tennis analogy, I just hit the ball
over the net. Nothing fancy. Back and forth, try to be patient, and
when the opportunity presents itself, seize it.
John
Michael Catolico
Richard Pergler wrote:
Going back to Michaels Catolico post [...] How he made the stretch to inkblots is anyone's guess.
i thought my point was clear : people see what they want to see in TA the way that an inkblot supposedly can be used to examine subjective psychological perceptions.
I couldn't disagree more regarding his tiff about entries and recommending the dart and coin thingy what-ever and astrology over astronomy?
i don't use any of these unless you consider looking at any change in price to be a form of TA. when prices change i react by either adapting, doing nothing or closing an existing position. my decision process is complex but is essentially a matter of judging risk/reward based on changing conditions. i have built up habits (some good, some bad) from years of trading experience and i react to markets based on that experience. i generally fade opening gaps, i look to adjust positions if that will lead to owning zero cost options, i trade mostly net long units to avoid disasters, i try to have net zero cost or credit positions to not worry about theta decay, and on and on. absolutely none of this has squat to do with TA. i guess somebody needs to pass me the oxygen tank.I really don't want to go round and round with this. My point is anyone using charts, moving averages, volume graphs, Bollinger bands,stochastic, MACD, CCI, take your pick, you're using TA. To say you don't use any TA is like someone saying they don't breath air.
michael
John
meetings is to in a way prove or disprove part of this TA theory. That
is, by breaking up into three groups, long, short and neutral, the idea
is to see if we can get all three groups to make money on the position
regardless of who is originally right on their bias.
I think if this experiment goes well, it will go a long way in perhaps
showing some of the TA people on this board and in the group, that
regardless of the direction you pick, you can make money on any trade
if you manage it well. We'll see how it pans out.
John
Cedrick Johnson
Although in the tsys we don't use it for our intraday trades, we use TA to
analyse and act on long term trends.
I can elaborate more on Tuesday. I've been up since 3AM, it's now 12:30, and
I have to be up at 3am again. Have a excellent weekend, and when's the next
meeting of COT? I'm moving to NYC in late Sept, so at least want to meet you
guys before I transfer to the Big Apple. I also want to try this TA
experiment :)
-c
John
Did you get a job in NY? What are you doing?
Our next meeting is Monday Sept 12th at 7pm. See you there!
John
John
going forward in regards to the indexes, or stocks? Don't be shy, let's
hear your what the charts are saying. Since we have so many guys in
our group using TA, surely somebody has some good stuff to post.
John
FredS...@aol.com
beze
330's for both by end of October.
John
Care to explain that a little bit further. I'm bullish on on GOOG and
CME too. I understand the basics of Elliot Wave but perhaps you could
explain how you come up with a specific time frame for making that
prediction. Thanks.
John
beze
The price and time targets are generated by Profit Source. I am new to
Elliot Waves and just got Profit Source (a TA program centered on EW).
This is the first time I have seen a TA tool forcast time and price
targets. I really do not know if the forcasts are a function of
traditional Elliot Wave theory or if they are proprietary to Profit
Source.
My CME position I put on a few weeks before, the GOOG position was
inspired by my recent attendance at an Optionetics seminar where they
were demonstrating Profit Source and GOOG met the criteria very well so
I took a leap of faith and put the trade on after the seminar.
Here are links to a Profit Source demonstration by Tom Gentile (of
Optionetics). You may need to load webex or something like that. It's
pretty neat stuff, I encourage TA believers and non-believers to watch
it when they have time.
http://www.optionetics.com/products/profitsource/default.asp (click on
Profit Source in action).
Fun and profitable trading to all!
Adam