On why traditional tech analysis stopped working and on when it shall start again...

[craft]

Re: On why traditional tech analysis stopped working and on when it shall start again

Craft
Have you read it?
What is your feedback?

This is----in my opinion applicable to all forms
Of analysis.

No I haven’t read it yet. I was hoping to get some reviews. (Care to oblige?)

The pdf on the website I referred to makes me think it would be ‘technically’ robust discussion contained in the book. (As in good statistical methods) I’ve read plenty of robust papers from academics but this one is from a seeming active participant in the market which makes it more unique.

I agree the principle of blasting subjectivity with a good dose of objective evidence is applicable to all forms of analysis. That’s what piques my interest from any field, the possibilities of application to my own approach.

 

[tech/a]

Re: On why traditional tech analysis stopped working and on when it shall start again

Craft.

You will love this book.

I've traded technically for 21 yrs.
Have worked with Kris for 7 mths.
This book articulates my own suspicions since 2008

For any serious analyst (Technical or fundamental) its brutal.

It is the future and we are fortunate enough to be in an era where we have the tools and the knowledge---which may need to be acquired---to step into the light.

Not for the lazy investor or the punter.

I've often said

"You need to know what you need to know''

Fits right here.

 

[Wysiwyg]

Re: On why traditional tech analysis stopped working and on when it shall start again

EBT/FA -- uptrending, in-favour, great hype and potential stocks in a bull market have an edge.

 

[tech/a]

Re: On why traditional tech analysis stopped working and on when it shall start again

EBT/FA -- uptrending, in-favour, great hype and potential stocks in a bull market have an edge.

Care to translate

 

[Wysiwyg]

Re: On why traditional tech analysis stopped working and on when it shall start again

Care to translate

E - evidence
B - based
T - technical
F - fundamental
A - analysis

 

[tech/a]

Re: On why traditional tech analysis stopped working and on when it shall start again

E - evidence
B - based
T - technical
F - fundamental
A - analysis

The rest of it.
Much more to the book than what you can
Read on the links posted.
500 pages.

But agree with the addition of F/A.
Pretty well all we work with is NOT evidence based.
And would stack up to rigorous scrutiny.
In fact most people don't know what to
Use to produce "Evidence"

 

[howardbandy]

Re: On why traditional tech analysis stopped working and on when it shall start again

Hi Tech/a and all --

David Aronson is a friend of mine. Please do buy, read, and study his book.

About evidence based analysis -- my "Quantitative Technical Analysis" book discusses evidence based (Bayesian) trading management. Much of my work, writings, books, and presentations, is evidence-based. You can read some of the free chapters here:
http://www.quantitativetechnicalanalysis.com/book.html

Also, watch the presentation of the very evidence-based discussion of stationarity, free on YouTube:
https://www.youtube.com/watch?v=iBhrZKErJ6A

I will be presenting "Four Faces of Risk" via webinar to an IFTA audience on Wednesday (US time) July 15, to be followed by posting on YouTube in a week or so. Again, very evidence-based.


Best regards,
Howard

 

[Trembling Hand]

Re: On why traditional tech analysis stopped working and on when it shall start again

The second pdf on the website about Monte Carlo Evaluation is very good IMO and should be minimum understanding for people relying on back testing to support their TA assumptions.

http://www.evidencebasedta.com/

I like these two from the above,

you cannot use evidence to prove a hypothesis true.

People who believe in subjective technical analysis don’t realize it’s an empty claim. Once you entertain the possibility that an untestable claim might be true, it’s very easy to find seeming confirmation.

 

[banco]

Re: On why traditional tech analysis stopped working and on when it shall start again

The Edward and Magee stuff was always basically about breakouts from consolidation. I think one reason it doesn't work as well as it did is because anyone with an internet connection can see where the top and bottom of the consolidation is when in the 70's etc. you actually had to go to some effort.

Peter Brandt who has traded classical chart patterns since the 80's has noted that the shorter term (for him shorter term is weeks I think) chart patterns have a lot more false breakouts then they used to.

 

[tech/a]

Re: On why traditional tech analysis stopped working and on when it shall start again

The Edward and Magee stuff was always basically about breakouts from consolidation. I think one reason it doesn't work as well as it did is because anyone with an internet connection can see where the top and bottom of the consolidation is when in the 70's etc. you actually had to go to some effort.

Peter Brandt who has traded classical chart patterns since the 80's has noted that the shorter term (for him shorter term is weeks I think) chart patterns have a lot more false breakouts then they used to.

The big question which needs to be answered.

Where is viable evidence that chart patterns ever deliver/ed a consistent edge and profit.
Perhaps with an exception of Bulkowski
Who in my view pulls up short as we don't know how he derived his results and what methods he used---how it would be applied in a meaningful and profitable long or short term trading method!!.

I've spent a long time looking --- I can't find any " Evidence " lots of theory and examples but no evidence.

There is " some " (evidence) related to application of Technical Analysis.----not specifics.
Very poor and un convincing in my view.

 

[Bayronus]

Re: On why traditional tech analysis stopped working and on when it shall start again

Tech, thanks for bringing EBTA to our attention. I'm about half way through and it has been a very insightful read so far. I'm looking forward to being able to apply the scientific method to my own trading. Is anyone else reading or have read this book? I'd be interested in seeing and participating in some discussion related to applying its ideas. After all some of the biases the book talks about my not be apparent to us straight away.

Thanks again Tech!

 

[Wysiwyg]

Re: On why traditional tech analysis stopped working and on when it shall start again

I've spent a long time looking --- I can't find any " Evidence " lots of theory and examples but no evidence.

There is " some " (evidence) related to application of Technical Analysis.----not specifics.
Very poor and un convincing in my view.

The truth is, if there ever became a certainty to any T/A then that certainty would be quickly exploited and that exploitation would remove the certainty. You see no one reveals their trading success (except you ) for this reason. Another truth is T/A does not have any certainty. Look at the trading momentum thread on ASF and the brokerage, time and mediocrity that strategy has returned. The winners in this game know how to trick the ride or see the ride is being tricked and then profit from it.

 

[tech/a]

Re: On why traditional tech analysis stopped working and on when it shall start again

The truth is, if there ever became a certainty to any T/A then that certainty would be quickly exploited and that exploitation would remove the certainty. You see no one reveals their trading success (except you ) for this reason. Another truth is T/A does not have any certainty. Look at the trading momentum thread on ASF and the brokerage, time and mediocrity that strategy has returned. The winners in this game know how to trick the ride or see the ride is being tricked and then profit from it.

Nice theory Wysi

I don't subscribe to the "They know secrets normal individuals don't '
school of thought. That is simply experience.

I'm certain you can track and profit from market emotion seen in range and volume.
I do it often.

The reason few reveal their trading is
They don't have a plan
OR
If they do don't have enough confidence in it to demonstrate it.