# TA for prediction



## It's Snake Pliskin (18 September 2007)

Is TA a viable tool for predicting future prices? 
If so, why?
If not, why not?
What alternatives are there and are they any better?
(forget tainting the thread with money management and regurgitated lines borrowed from books)
I am interested in what people think or believe.


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## nizar (18 September 2007)

It's Snake Pliskin said:


> Is TA a viable tool for predicting future prices?
> If so, why?
> If not, why not?
> What alternatives are there and are they any better?
> ...




Hi Snake,

What does TA or technical analysis actually mean?
Is it the study of:

*Price action?
*Volume?
*Indicators?

All of the above?

We should define this before we move further.


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## It's Snake Pliskin (18 September 2007)

nizar said:


> Hi Snake,
> 
> What does TA or technical analysis actually mean?
> Is it the study of:
> ...




Nizar,

Nice to have you comment. 
TA might mean different things for different people. I believe it is the analysis of visual action of price historically displayed in hindsight on computer or paper. It can and often does involve the above or can involve other tools that posters may want to talk about. It may be a bit simple to simplify it to the small list you gave.(expand on indicators, uses, studies etc) Why not include all of the available visual stuff in the meaning?


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## wayneL (18 September 2007)

It's Snake Pliskin said:


> Nizar,
> 
> Nice to have you comment.
> TA might mean different things for different people. I believe it is the analysis of visual action of price historically displayed in hindsight on computer or paper. It can and often does involve the above or can involve other tools that posters may want to talk about. It may be a bit simple to simplify it to the small list you gave.(expand on indicators, uses, studies etc) Why not include all of the available visual stuff in the meaning?



Yeah it's a very broad church.

There are three broad churches as far as I know

1/ fundamental - the study of value via company reports 
2/ quantitative - the development of mathematic models
3/ technical -  study of price movement, volume  and interpretation of such.

IMO there can be a blurry line between quantitative and technical, but basically, if there's a chart involved, it's technical.

My 2c. I'll leave the question of prediction to others.


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## It's Snake Pliskin (18 September 2007)

wayneL said:


> Yeah it's a very broad church.
> 
> There are three broad churches as far as I know
> 
> ...




Wayne,

Your comments bring some perspective to the discussion. That blurry line is there indeed.


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## theasxgorilla (18 September 2007)

It's Snake Pliskin said:


> Is TA a viable tool for predicting future prices?



 Techniques don't predict the future, people try to and no-one can...it's just not possible...my unshakable belief.  I think there are people who make bets, get it right and say, "see, I told you I knew what would happen!".  Some people are better guessers than others.  Betting with probabilities is not prediciting the future.



It's Snake Pliskin said:


> What alternatives are there and are they any better?




I actually don't believe there is anything better for trading the stock market for retail level investors than technical analysis.  Fundamental analysis is too time consuming and you're too distanced from where the real wheeling and dealing happens to stand a chance at getting it right.  I don't care for a discussion about why I'm wrong...I believe it and am not currently at a place in time where I'm willing to accept counter arguements, sorry.

The only superior alternative to technical analysis IMO is macro economic analysis...in other words, the big picture.  The stuff that Richard Farleigh made his fortune doing.  But even he describes using what I interpret to have been a rudimentary form of trend analysis to make sure that he was getting with the herd.  The big picture analysis helps you identify imbalances and build theories about what trends _could_ occur and trend analysis tells what trends _are_ occuring.


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## ducati916 (18 September 2007)

It's Snake Pliskin said:


> Is TA a viable tool for predicting future prices?
> *No*
> 
> 
> ...




The method must suit the individual, no point mis-matching the individual with a strategy they cannot understand, or feel stressed by.

jog on
d998


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## Frank D (18 September 2007)

Some people have the skill to chart-read by forward-thinking of likely events happening because those same patterns have occurred in the past. This is the theory of all forward looking methodologies. Some people like to call it predictions. But they are simply modeling patterns of likely events that might or might not take place.

These type of traders will use this skill, but will only trade when the alignments occur and subject themselves to trade when it conforms with the view. Elliot-wave is an example of forward-looking methods. So is mine. Whether the trade works or not, they simple move on to the next.

There are others like ASX gorilla who can’t, or don’t want to forward-think in probabilities using modeling patterns. They believe it can’t be done and believe that no one else can. They don’t understand it so they dismiss it. These traders rely on systems and price-based indicators to trade, and don’t give a rats-**** about trying to predict the market. When the trade comes along they take it regardless of any view, prediction or perception others make. Whether the trade works or not, they simply move on the next.

Both methods are the same: - Whether the trade works or not, they simply move to the next.

 Regardless of whether you can or can’t, it makes no difference whether you use forward-looking models or not. The only thing that matters is making money by subjecting yourself to the markets, whichever method you use. 

But in reality, every ‘systematic’ trade placed is literally ‘predicting’ the market, because of the belief that the past will repeat into the future. If not you wouldn’t place the trade.

I don’t think there are to many dart throwers amongst us.

BTW…fundamentals and fundamental analysis is the only thing that will make you wealthy in the market. 

Technical analysis is at its best; only good for lifestyle choices and achieving an income. Sadly most traders using technical analysis would be lucky to be making more money than if they were working for someone else.

Just my view

Frank Dilernia


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## >Apocalypto< (18 September 2007)

Frank D said:


> Some people have the skill to chart-read by forward-thinking of likely events happening because those same patterns have occurred in the past. This is the theory of all forward looking methodologies. Some people like to call it predictions. But they are simply modeling patterns of likely events that might or might not take place.
> 
> These type of traders will use this skill, but will only trade when the alignments occur and subject themselves to trade when it conforms with the view. Elliot-wave is an example of forward-looking methods. So is mine. Whether the trade works or not, they simple move on to the next.
> 
> ...




That is a excellent post!

You make some fantastic points in there Frank. You also hit some painful truths! 

Great you made a comment here, I would also like to see Wavepicker and Magdoran make a comment here as they both use TA for prediction and do a damn good job at it, like yourself.

I believe you can use TA to predict, I am far from getting to that level of skill but I am working on it. Time fames is what I am still trying to get my head around weather u chase the smaller times or look at trading the actual market on a weekly to monthly time frame catching the real trend not minor jumps and dips.

Like Frank pointed out you also need to be aware of fundamentals. 

Try factor them into the price yourself to try to gage the possible affect on the market. that can be a set up for disaster if not done correctly.

What I do know is getting some where in this business takes time and hard work.

my


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## disarray (18 September 2007)

TA is viable otherwise why would people get so excited about repeating patterns (head & shoulders, triangles etc.) ?

the market is a chaotic system and chaotic systems throw up patterns all the time - chaos is the mother of order. recognising and trading these patterns is purely TA and even if you can't predict exact prices you can predict trends, ally that with FA and you can predict the most probable strength of the trend.

anyway lines on charts look cool


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## tech/a (18 September 2007)

Motorway put it best I think.

Technically we *Anticipate* rather than predict.
I like this.


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## explod (18 September 2007)

theasxgorilla said:


> Techniques don't predict the future, people try to and no-one can...it's just not possible...my unshakable belief.  I think there are people who make bets, get it right and say, "see, I told you I knew what would happen!".  Some people are better guessers than others.  Betting with probabilities is not prediciting the future.
> 
> 
> 
> ...




This is close for me but I dont' think the macro economic is required.  I like a trading Average as an indicator of overal sentiment but I like a basic fundamental big picture.   Oil Serach, in focus at the moment, is a case in point, looking at a five year weekly chart an MA gives a good idea of when to get in an out.  I am comforted to know that they have a great resource, oil coming out and gas reserves to be tapped and the world cant' get enough of the stuff.  This wide view works well for me and dont' consider this punting but investing.


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## nizar (18 September 2007)

tech/a said:


> Motorway put it best I think.
> 
> Technically we *Anticipate* rather than predict.
> I like this.




Yeh he has responded to this same question elsewhere on another thread.
He said: Recognise and Anticipate, not predict.


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## rub92me (18 September 2007)

It's Snake Pliskin said:


> Is TA a viable tool for predicting future prices?
> If so, why?
> If not, why not?
> What alternatives are there and are they any better?
> ...



You can not _predict_ the future no matter what tools you use. If it could be done it would have been done by now. Spending a lot of time trying to 'perfect' your predictive tools is therefore time wasted imho. Makes for entertaining reading though..


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## >Apocalypto< (18 September 2007)

rub92me said:


> You can not _predict_ the future no matter what tools you use. If it could be done it would have been done by now. Spending a lot of time trying to 'perfect' your predictive tools is therefore time wasted imho. Makes for entertaining reading though..




So W.D Gann was a lier and he wasted his whole life learning to predict markets accurately.


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## DTM (18 September 2007)

Frank D said:


> Some people have the skill to chart-read by forward-thinking of likely events happening because those same patterns have occurred in the past. This is the theory of all forward looking methodologies. Some people like to call it predictions. But they are simply modeling patterns of likely events that might or might not take place.




I totally agree with this as I base my judgements on business cycles and recurring patterns based on those cycles.  For shorter time frame traders/investors, T/A is very important because of how they look at the market and how it gives them a fair indication of when and where to invest or gamble.  As you said, everyone's pretty much guessing based on past performance whether based on mathematical models or on price indicators.

At the end of the day in my opinion, there's no fool proof method of trading.  

Investing long term based on fundamentals builds wealth but at a much slower pace.




Frank D said:


> But in reality, every ‘systematic’ trade placed is literally ‘predicting’ the market, because of the belief that the past will repeat into the future. If not you wouldn’t place the trade.
> 
> I don’t think there are to many dart throwers amongst us.
> 
> ...





Although I am a big fan of fundamental analysis and T/A, I do believe that they have an important but seperate roles in investing.  

I don't believe that Fundamental analysis is the only way to sure riches.

I constantly do my own fundamental research and find it quite enjoyable and helps me understand the broader picture of the markets and how it responds to those develping reasons.  

Where I have gone wrong in the past is letting that knowledge cloud my judgement when it came to trading.  From my own experience, fundamentals moving the markets is more akin to a train wreck in slow motion.  It takes a while to move.  

Trading skills are a totally different kettle of fish and for my style, totally reliant on T/A.  When I look at the longer term charts, I can see the fundamentals in play.  In shorter term charts, you have every man and his dog jumping in and out and its everyone for themselves. 

Even with Fundamentals, placing your investments at the wrong time can have serious draw down consequences.  The money flows to where the markets thinks best returns will be achieved, not necessarily where the best business is located.  More like a stampede to the next bubble.  A good example would be the internet bubble.  There was serious money to be made when the going was good.   If you had good timing and smart money usually does, you would have left at the right time waiting for the market to crash to pick up bargains based on Fundamentals.  

I believe that Fundamental Analysis is best served by using T/A as a timing tool.  T/A is a good gauge of investor mood. 

*When the market crashes, T/A and Fundamentals go out the window.*

Daniel


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## DTM (18 September 2007)

Trade_It said:


> So W.D Gann was a lier and he wasted his whole life learning to predict markets accurately.




I think Gann had a great understanding of the markets and how prices move and I use some of his methods.  I still don't quite fully understand what he was about but I'm sure there's a lot of people out there in the same boat.  

Some people like him, some don't.  

For me personally, I think he's alright.


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## It's Snake Pliskin (18 September 2007)

ASX Gorilla,


> Techniques don't predict the future, people try to and no-one can...it's just not possible...my unshakable belief.  I think there are people who make bets, get it right and say, "see, I told you I knew what would happen!".  Some people are better guessers than others.  Betting with probabilities is not prediciting the future.



You may have noticed I used the word "TOOL". (see red) Yes, which is why I started the thread on PREDICTION.



> I actually don't believe there is anything better for trading the stock market for retail level investors than technical analysis.  Fundamental analysis is too time consuming and you're too distanced from where the real wheeling and dealing happens to stand a chance at getting it right.  I don't care for a discussion about why I'm wrong...I believe it and am not currently at a place in time where I'm willing to accept counter arguements, sorry.



Biased?



> The only superior alternative to technical analysis IMO is macro economic analysis...in other words, the big picture.  The stuff that Richard Farleigh made his fortune doing.  But even he describes using what I interpret to have been a rudimentary form of trend analysis to make sure that he was getting with the herd.  The big picture analysis helps you identify imbalances and build theories about what trends _could_ occur and trend analysis tells what trends _are_ occuring.



So your philosophy is disclosed. Thanks.


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## It's Snake Pliskin (18 September 2007)

rub92me said:


> You can not _predict_ the future no matter what tools you use. If it could be done it would have been done by now. Spending a lot of time trying to 'perfect' your predictive tools is therefore time wasted imho. Makes for entertaining reading though..




Actually we can predict, but the achievement of the prediction is what we cannot GUARANTEE. 

What predictive tools do you refer to?


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## It's Snake Pliskin (18 September 2007)

tech/a said:


> Motorway put it best I think.
> 
> Technically we *Anticipate* rather than predict.
> I like this.




Prediction is prophecy, so anticipation is anticipation of what?


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## It's Snake Pliskin (18 September 2007)

Frank D said:


> Some people have the skill to chart-read by forward-thinking of likely events happening because those same patterns have occurred in the past. This is the theory of all forward looking methodologies. Some people like to call it predictions. But they are simply modeling patterns of likely events that might or might not take place.
> 
> These type of traders will use this skill, but will only trade when the alignments occur and subject themselves to trade when it conforms with the view. Elliot-wave is an example of forward-looking methods. So is mine. Whether the trade works or not, they simple move on to the next.
> 
> ...




Thanks for your contribution Frank.


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## tech/a (18 September 2007)

It's Snake Pliskin said:


> Prediction is prophecy, so anticipation is anticipation of what?





Been trading this using VSA and Elliott over on Radges site.
Hit the price target to the cent as you'll see.

Prediction----well I said thats the target.
Anticipation----Thats all you can do.

Makes good reading and trading,although I didnt trade the complete move.
The premise for the trade palyed out to the cent though.

Makes for some reading.


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## It's Snake Pliskin (18 September 2007)

tech/a said:


> Been trading this using VSA and Elliott over on Radges site.
> Hit the price target to the cent as you'll see.
> Prediction----well I said thats the target.
> Anticipation----Thats all you can do.
> ...




So you anticipated the prophecy would hold, not to mention the "LUCK" factor.


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## nizar (18 September 2007)

tech/a said:


> Been trading this using VSA and Elliott over on Radges site.
> *Hit the price target to the cent as you'll see.*
> 
> Prediction----well I said thats the target.
> ...




Good effort soN!


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## motorway (18 September 2007)

> Prediction is prophecy, so anticipation is anticipation of what?




Anticipation stays close to what is happening now.

It is recognizing structure and order
from which a line of least resistance
is defined

Think 

Roger Federer on the tennis court
supreme anticipation
The ability to read the structure 
of the entire play in the moment
and the ability , skills to profit from that anticipation

ie To make winning shots

Prediction focuses on a non existent illusion
called the future

Think of an amateur tennis player
Not playing what is in front of Him

Trying to impose a preconceived ( prediction ! )
play at the wrong time

The line of least resistance 
defines itself . It only needs to be observed

Time = a process , any unfolding process can be used as a clock.

Process has attributes of
evolution and revolution..............

Structure and Process  are the ONE thing
seen as two aspects


Because We deal with unbounded context
Because We are not a God

Prediction is very dangerous and removes Us from what is happening.

It is trying to use feedforward... The Problem is that the future is not a reality We can use like that.
Reality is only Now...

With Feedback We can identify a line of least resistance that is present now

When it comes to endeavors of speculation and investment
Water does and can flow seemingly up hill for longer than We might think...




> Too much money is lost and too much money is missed
> for two simple reasons: One, trying to predict the
> future, and two, fearing the future.





Apologise for the quote 

But there is much much wisdom in those words



motorway


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## Wysiwyg (18 September 2007)

Turning prediction into reality is a matter of convincing/persuading other people that the prediction will happen.That is what professionals do and there is nothing more persuasive to realizing a prediction than money.


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## IFocus (18 September 2007)

Hi Snake

I cringe when ever I hear the word prediction used. The psychology attached to such a position is significant and quite damaging over the longer term I feel. There’s a lot of buy in mental capital if using that term. I have never heard successful full time traders use the term.

To me TA is purely a method based on probability after testing that proves a method of anticipating market moves with the ability to maintain small loses verses larger profits anything eles is noise. 

Focus


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## rub92me (18 September 2007)

It's Snake Pliskin said:


> Actually we can predict, but the achievement of the prediction is what we cannot GUARANTEE.
> 
> What predictive tools do you refer to?



Semantics. You could substitute predict for hope/pray, etc. and equally say that that is a useful exercise, you just can not guarantee the outcome. Prediction without tangible (above statistically random) accuracy won't do us much good.


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## rub92me (18 September 2007)

Trade_It said:


> So W.D Gann was a lier and he wasted his whole life learning to predict markets accurately.



If I was Wayne I would call that a disingenuous straw man argument!


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## wayneL (18 September 2007)

rub92me said:


> If I was Wayne I would call that a disingenuous straw man argument!



No you wouldn't, because it's not really a straw man argument.


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## >Apocalypto< (18 September 2007)

rub92me said:


> If I was Wayne I would call that a disingenuous straw man argument!




What the hell is a straw man?


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## wayneL (18 September 2007)

Trade_It said:


> What the hell is a straw man?




It's a logical fallacy, one of many used by folks when debating.

http://en.wikipedia.org/wiki/Straw_man_argument


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## >Apocalypto< (18 September 2007)

wayneL said:


> It's a logical fallacy, one of many used by folks when debating.
> 
> http://en.wikipedia.org/wiki/Straw_man_argument




I hardly think that my reply was a straw man. It's a damn good point to RUB2me Gann did predict and alot of of his predictions came true.

I wanted to see Rub2me support his claims about people trying to predict markets are wasting there time. Gann is a example of a person that could do it. Magdoran is another. Bill Mclaren another example


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## explod (18 September 2007)

It is very entertaining observing the different approaches to investing.  It reminds me of my era of earlier life when I was a serious aeromodeler.  My specialty was areobatics.   It too was a socialogical smorgasboard.  There were those that had a focus of buidling them, another would be the gadgets, lots of meters on his flying box etc, others worried about the rules, others were frequency nuts (all radio controlled) other just socialising and having a few whiskies out the back.   And others who could not fly well, thought they could and provided spectacular crashes sometimes behind the crowds.

Investing is really on the ballance of probabilities, it is a subjective science and no one way is neccessarily better than others.  IMHO

Gann suceeded because he had measured all the past events and knew the probabilites.  But he also followed current events, what sort of weather for wheat, supply, demand etc., it is a science of experience and knowledge and the longer you are in it the better you will get.

Buffet is the same in the sense that he has the experience and knows how to measure a company before he will make a deal and I suspect he must take into account some of the Gann things like cycles, demand etc.

The new and modern trader goes for the gadgets, the computer predictors etc. etc., but in the final analysis the gadgets merely try to measure those things that the experienced investor already has within his head.   I hear some say they could not be bothered with going to the trouble of fundamental analysis.   Well if I am going to deal with my hard earned I think I have to be bothered with every angle I can find.    I learn something from everyone that posts and that is the reason why I hang around and stir etc., it is rewarding and not just entertainment


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## rub92me (18 September 2007)

Trade_It said:


> I hardly think that my reply was a straw man. It's a damn good point to RUB2me Gann did predict and alot of of his predictions came true.
> 
> I wanted to see Rub2me support his claims about people trying to predict markets are wasting there[sic] time. Gann is a example of a person that could do it. Magdoran is another. Bill Mclaren another example



Your quote was:


			
				Trade_It said:
			
		

> So W.D Gann was a lier[sic] and he wasted his whole life learning to predict markets accurately.



How is that a damn good point?? I may have a different opinion to W.D. Gann, however that doesn't mean that I'm calling him a liar. 
Wasting their time in the sense that in my opinion more money can be made in the application of an edge rather than trying to correctly predict the future. Each to their own.


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## theasxgorilla (18 September 2007)

Frank D said:


> Some people have the skill to chart-read by forward-thinking of likely events happening because those same patterns have occurred in the past. This is the theory of all forward looking methodologies. Some people like to call it predictions. But they are simply modeling patterns of likely events that might or might not take place.




Key statement.  I prefer the term _expectation_.  Note that I did not say expectancy.

1.	the act or the state of expecting: to wait in expectation.
2.	the act or state of looking forward or anticipating.
3.	an expectant mental attitude: a high pitch of expectation.
4.	something expected; a thing looked forward to.

I bet (or should I say, _I expect_) calling it _predicting_ makes selling something easier than calling it 'better guessing'.

1.      to state, tell about, or make known in advance, especially on the basis of special knowledge.


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## theasxgorilla (18 September 2007)

explod said:


> This is close for me but I dont' think the macro economic is required.  I like a trading Average as an indicator of overal sentiment but I like a basic fundamental big picture.




In the context of your example about oil and OSH that is macro-economic analysis in my view.  Coupled with your trend analysis for trying to anticipate when it's best to climb aboard, it sounds like we're very much on the same page.  Whether you're subscribing to peak oil theory, looking at POO charts nearing all-time-highs, or counting current production levels and anticipating short falls over the northern hemsiphere winter (plus other factors and/or some combination there of) it's macro-economic analysis by my definition.  Fundamental analysis would be looking at the company reports of OSH and determining whether the company is being run well enough to take advantage of the macroeconomic forces in play.  I know nothing about running oil companies so can't bring such a skill to bear on this company.


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## theasxgorilla (18 September 2007)

It's Snake Pliskin said:


> So you anticipated the prophecy would hold, not to mention the "LUCK" factor.




C'mon Snake...you and I both know one example is not statistically significant enough to prove that there was any luck involved!


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## wavepicker (18 September 2007)

All forms of analysis be it:-

-Techinal Analysis
-Quantative Analysis
-Fundemental Analysis

*Have Flaws*. 

TA may present you with possibilities and probabilities from which to trade from circumstances in the market. There are no certainties. The analyst that does not make mistakes does not exist and long term success in the markets demads recognition of the fact that error and uncertainty are part of any effort to assess future probabilities

On occassions the market exhibits "order" both in price and time and if all the patterns are falling together at the time then "predictions" sometimes work out for a while. But then there is a question of "CONSISTENCY". Can this be done consistantly, the answer is no. You take the trade, if it works fine, if not then you move onto the next trade as Frank D said.

I prefer see various forms of TA be it in both price and time used as means of presenting the evidence to quantify a probability of a move.

It's all about making sure that as many cards are stacked in your favour before taling a trade, and even then there is no certainty.

You cannot predict with TA 

THOSE THAT LIVE BY THE CRYSTAL BALL WILL EVENTUALLY HAVE TO LEARN HOW TO EAT GLASS'

Cheers


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## It's Snake Pliskin (18 September 2007)

motorway said:


> Anticipation stays close to what is happening now.
> 
> It is recognizing structure and order
> from which a line of least resistance
> ...




Thanks for the post Motorway.
Regards
Snake


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## It's Snake Pliskin (19 September 2007)

IFocus said:


> Hi Snake
> 
> I cringe when ever I hear the word prediction used. The psychology attached to such a position is significant and quite damaging over the longer term I feel. There’s a lot of buy in mental capital if using that term. I have never heard successful full time traders use the term.
> Focus




Hi Focus,

It makes me cringe too.


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## It's Snake Pliskin (19 September 2007)

theasxgorilla said:


> C'mon Snake...you and I both know one example is not statistically significant enough to prove that there was any luck involved!




Hi ASX,

I didn't imply, nor, infer there was any statistical evidence. Just mentioned the LUCK factor as being something worthy of consideration, without using those exact words. 

Thanks for your contributions.
Snake


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## It's Snake Pliskin (19 September 2007)

wavepicker said:


> All forms of analysis be it:-
> 
> -Techinal Analysis
> -Quantative Analysis
> ...




Thanks for the comments Wavepicker.


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## theasxgorilla (19 September 2007)

It's Snake Pliskin said:


> I didn't imply, nor, infer there was any statistical evidence. Just mentioned the LUCK factor as being something worthy of consideration, without using those exact words.




I know, sorry Snake...I was being utterly facetious   IMO, agree 110%, until you reach proven track record territory, never underestimate luck, and even then, never underestimate luck...and accept it graciously when it comes


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## chops_a_must (19 September 2007)

rub92me said:


> Semantics. You could substitute predict for hope/pray, etc. and equally say that that is a useful exercise, you just can not guarantee the outcome. Prediction without tangible (above statistically random) accuracy won't do us much good.




Yes, the latin word for expectation was a replacement for the latin word for hope, in one publication. That's where the concept of expectation originates from.


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## tech/a (19 September 2007)

It's Snake Pliskin said:


> Prediction is prophecy, so anticipation is anticipation of what?




Anticipation for me atleast is placing myself in a position to take advantage of a price move or pattern which I have observed to have occured on a regular enough basis to expect that it is likely to occur again.

I have no idea why they occur Particularly Elliott waves and their targets.
5 waves up and generally 3 waves down.---Dont know why,but it happens time and again.

What I will say though is the most reliable(Technical patterns and signals) and those that I participate in are *very clearly defined*,no guess work,dont have to look hard its just clarly there.If its not then its not for me.

Frank's pretty well nailed it.


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## motorway (29 September 2007)

Here is a pertinent view..

TA for 
adaptation 

The act or process of adapting, or fitting; or the state of being adapted or fitted; fitness.



http://www.clayallen.com/MD_NEWS_V5_I23.pdf


motorway


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## trishan9390 (1 October 2007)

Firstly let me say what great reading this thread has provided. It certainly is a thought provoking subject.

I am just a beginner to trading, so my view on TA and trading may lack the refinement that comes with experience. 

My take on TA depends largely on the timeframe one wishes to trade in. The fundamentals are indeed important in the long run. In the long run TA is means to confirm one's long term view.

In the short run, TA can provide a good indication of near future price action. As I see it (and my view here may be basic and incorrect, so feel free to correct me), there are many traders who place reliance on methods of TA and once buy/sell "signals" are generated from TA, many of these traders open positions based on their analysis. If the tecniques of analysis are uniform,  you end up with many traders getting a similar signal. There may of course be some traders who get opposing signals, but a majority of traders will have the same signal.

This will in turn lead to an increase in demand or supply in the short run which will cause the price to move in the predicted direction. These traders, if using uniform methods of TA will end up with similar price targets and the price will continue to move in the predicted direction, with more and more traders who either missed the original signal or are waiting for more confirmation jumping on board along the way to the target.

So if this is the case, then using TA to predict future price movements in the short term can be very useful and accurate. While we can not see the future, we can predict with reasonable accuracy how price action may play out.


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## It's Snake Pliskin (1 October 2007)

> Firstly let me say what great reading this thread has provided. It certainly is a thought provoking subject.



Which is why I posted the thread, just for discussion.



> I am just a beginner to trading, so my view on TA and trading may lack the refinement that comes with experience.



You are about to realise that TA really doesn't mean much.



> My take on TA depends largely on the timeframe one wishes to trade in. The fundamentals are indeed important in the long run. In the long run TA is means to confirm one's long term view.



How does TA and FA marry up so TA confirms? 



> In the short run, TA can provide a good indication of near future price action. As I see it (and my view here may be basic and incorrect, so feel free to correct me), there are many traders who place reliance on methods of TA and once buy/sell "signals" are generated from TA, many of these traders open positions based on their analysis. If the tecniques of analysis are uniform,  you end up with many traders getting a similar signal. There may of course be some traders who get opposing signals, but a majority of traders will have the same signal.
> 
> This will in turn lead to an increase in demand or supply in the short run which will cause the price to move in the predicted direction. These traders, if using uniform methods of TA will end up with similar price targets and the price will continue to move in the predicted direction, with more and more traders who either missed the original signal or are waiting for more confirmation jumping on board along the way to the target.
> 
> So if this is the case, then using TA to predict future price movements in the short term can be very useful and accurate. While we can not see the future, we can predict with reasonable accuracy how price action may play out.




I think you are saying TA can be used for prediction. Correct me if I am wrong.
Cheers...


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## It's Snake Pliskin (1 October 2007)

theasxgorilla said:


> I know, sorry Snake...I was being utterly facetious   IMO, agree 110%, until you reach proven track record territory, never underestimate luck, and even then, never underestimate luck...and accept it graciously when it comes




Even then I wouldn't place to much emphasis on performance. I note this is what you are saying......


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## Wysiwyg (1 October 2007)

trishan9390 said:


> As I see it (and my view here may be basic and incorrect, so feel free to correct me), *there are many traders who place reliance on methods of TA *and once buy/sell "signals" are generated from TA, many of these traders open positions based on their analysis.





And this is what makes the `signal` the `signal`.(overbought or oversold basically)

p.s. not every time otherwise everyone would be tech. heads.

p.p.s. you`re with it trishan


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## tech/a (1 October 2007)

Experienced exponents of Tech analysis get sick of taking part in these threads.The continual F/A V T/A arguement grows tedious.

Of course Technical AND Fundamental analysis work.
Of course they can be combined.
Of course BOTH can be profitable.

I've proven it.
Radge has 4 technical methods traded live on "The Chartist" ALL in some state of profit.
Stevo has great profit on his blog.
Young Trader has made some great fundamental calls.
Wavepicker shows often technical confirmation.

I'll say it again.
Its *APPLICATION* of whatever analysis you choose which is all important.
Its *NOT* the analysis which will determine profit.

Can technical analysis be seen as predictive.
Of course it can.
Analysis as* Radge *put so well Technical,Fundamental,Predictive,whatever------- is a matter of *Prove,Disprove,prove,disprove*.


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## tcoates (1 October 2007)

Wysiwyg said:


> And this is what makes the `signal` the `signal`.(overbought or oversold basically)
> 
> p.s. not every time otherwise everyone would be tech. heads.
> 
> p.p.s. you`re with it trishan




the reason why (the way I see it) is more because not everyone is a "tech. head" - either because (i) they don't know it or, (ii) don't care to know it, or (iii) don't believe it.

Besides if everyone were a "tech head" then would (?) need to find another edge to make you different to the rest.

Tim


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## tech/a (1 October 2007)

It's Snake Pliskin said:


> Which is why I posted the thread, just for discussion.




Lots of statements Snake not a lot of discussion from you.



> You are about to realise that TA really doesn't mean much.




Expand? To who--how can you speak for someone else? To you maybe this is so.



> How does TA and FA marry up so TA confirms?




This statement confirms my comment above. You cant find a way of applying Tech analysis profitably.Doesnt mean everyone else is in the same boat.



> I think you are saying TA can be used for prediction. Correct me if I am wrong.
> Cheers...




See my post above.


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## It's Snake Pliskin (1 October 2007)

> Lots of statements Snake not a lot of discussion from you.



What would you like me to talk about?



> Expand? To who--how can you speak for someone else? To you maybe this is so.



Not the case. It comes from a philosophical standpoint which is not realised by the neophyte loser. TA does HELP the trader. I shall stick to English. And it is *TO WHOM*!



> This statement confirms my comment above. You cant find a way of applying Tech analysis profitably.Doesnt mean everyone else is in the same boat.



Once again the rehashed argument and accusations. I was actually interested in what the poster had to say. Unlike some I was not searching for answers, if you catch my drift. Discussion I was trying to have. Perhaps you have something to add.



> See my post above.



Rhetorical question. Not literal. Difference there is.


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## It's Snake Pliskin (1 October 2007)

tech/a said:


> Experienced exponents of Tech analysis get sick of taking part in these threads.The continual F/A V T/A arguement grows tedious.
> 
> Of course Technical AND Fundamental analysis work.
> Of course they can be combined.
> ...




Tech are you an experienced exponent?

Are you saying everyone should just subscribe to Nick's site?
Are you saying we should all follow Stevo's site?
Even follow you with your expensive software?

This thread is not about TA/FA arguments. It was about using TA for prediction. Simply a DISCUSSION thread for ALL members to take part in. As usual you go on the attack. 

I respect Nick for the prove disprove philosophy. Nick. 

Tech you don't have to take part you know. (see red part)


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## tcoates (1 October 2007)

To answer the question about TA and predictive functions...

A. Yes, TA can be used to predict future price (movements) but this generally comes in the form of AI, fuzzy logic and neural networks.

http://www.deepinsight.com/
http://www.stockneuromaster.com/snm.htm
http://ieeexplore.ieee.org/Xplore/login.jsp?url=/iel5/6229/16641/00771117.pdf

(there are many other links... just enter "technical analysis for prediction" into google)

Q. Does I use any of above software?

No

Q. Does it work?

A. Don't know as I have not been bothered to look into it that deeply. There are  numerous articles on the Internet about this. Suffice to say that arguments differ on the effectiveness of such applications.

Q. Is it worth the effort to take the time it takes to build in predictive functions into a system?

A. Firstly, you need to prove that it works (well enough) for inclusion. But if I (subjectively speaking) have to work N-months just to find out that it is no better off, then I would not bother. (That is, better left to the academics)

Now, I would have said that anticipation and prediction are the same thing when I first came on this thread. Then could understand from motorway the subtle differences between anticipation vs prediction. Getting bogged down on definitions (or other arguments) is a waste of time


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## It's Snake Pliskin (1 October 2007)

Interesting maybe some posters could post on the above listed software and its predictive ability.


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## tcoates (1 October 2007)

Not my review, but here is one for you...

http://www.elitetrader.com/so/?action=view&SR_ProductID=136

And prolly the best (or most important) from the article is



> A mistake people make is expecting too much. Neural networks and genetic algorithms do not create solutions. They help you quickly find out whether an idea you have about the characteristics of some trading vehicle is valid.




This would apply to all trading software I think.

Cheers,


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## tech/a (1 October 2007)

Does metoerology Predict the weather? 

Snake your pretty clear on your stance.Hence my Curt reply.You seem to be baiting not discussing.Its not as if the topic has never been seen. Youve been involved in a few from memory.

Take a look at your reply to myself and coates--pretty well--"Ok Prove it!"
Same old Same old



> Tech you don't have to take part you know. (see red part)




Good point my apologies.


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## IFocus (1 October 2007)

Hi trishan9390 



> I am just a beginner to trading, so my view on TA and trading may lack the refinement that comes with experience.




Can I suggest a book to read when starting out "Enhancing Trader Performance" by Brett Steenbarger. I am currently 1/2 way though and thinking it would have been of great benefit to my progress when I started out instead of traveling the  experience route.

Focus


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## trishan9390 (1 October 2007)

IFocus said:


> Hi trishan9390
> 
> 
> 
> ...




Thanks, I will look for it during my lunch break tomorrow.


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## Joe Blow (1 October 2007)

trishan9390 said:


> Thanks, I will look for it during my lunch break tomorrow.




Or better yet, order it from the ASF Investment Shop and spend your lunch break eating lunch instead: http://www.moneybags.com.au/default.asp?d=0&t=1&id=5203&c=0&a=74


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## It's Snake Pliskin (2 October 2007)

tech/a said:


> Does metoerology Predict the weather?
> 
> Snake your pretty clear on your stance.Hence my Curt reply.You seem to be baiting not discussing.Its not as if the topic has never been seen. Youve been involved in a few from memory.
> 
> ...




So you make accusations on something you don't know then say I am baiting. 

It is prove - disprove .........If I have questions to ask I'll ask them.

....and ignore you now.


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