T/A lost the plot

[It's Snake Pliskin]

All analysis attempts to look forward, how many people quote a 200 day MA and say that the price will rebound from it, or Stochs are oversold or RSI is oversold, and the price will correct from these levels, how many use patterns like flags or triangles to predict the price will move in a certain direction, how many use fundementals to say that a company is undervalued and hence a buy as the price will move to more realistic levels?? I don't think I have met anyone who invests/trades on the markets who buys long unless they believe that the price will move up according to their particular analysis technique.... because of this promise, and because of the way a practioner (even a half-baked one) wields this technique, it can plav havoc with an observers psychology, particularly if you have a limited understanding.
As for E/W, yes it also can be used for prediction, however the best way I have found to incorporate it into my trading is to identify the probable position I am in in the trend. As such the first downleg in the current correction was tradable short, the following correction provided some quick long trades, but the subsequent dip and current rally over the past week could go anywhere (I have three possibilities on my chart but I am sure there are others), my basic E/W gives several current possibile predictions, but for mine not tradable until the trend asserts itself one way or the other. When it will happen, why it will happen, and in which direction will it go, I don't know and don't care, but when it happens I will be ready, until then not being in the market is as much about trading as being in it. Whilst I am waiting there are still good trades available in FX, Gold etc...

Nice post Kauri

 

[It's Snake Pliskin]

Well said, Coyotte (and in fewer words than I would have, too).

It ain't the analysis that makes the money. In fact, I'd go as far as to say that technicians that make money (myself included) do it DESPITE our analysis.

Michael,

This is true, and is the point to be understood.
However, going beyond Guppy, Wilson, and Tharp is paramount. Nothing wrong with the aformentioned but there are some TA heavy weights worth exploring that may make one a bit more money. Opportunity needs to be understood. Without TA how can it be quantified etc..? Just like FA how can people build dreams of hope?

 

[It's Snake Pliskin]

Atomic5,

I had already posted on another thread that I thought the likelihood of a rally until late April was a possibility, but for political and other reasons.

Political analysis

I am not a tecnical trader so I didnt call any top.

Most TA advocates can't call tops.

Then seeing those assumptions somewhat translated or concorded by a technical view/chart analysis by Tech/A was really interesting. I have since read other historical-data analysts and brokers express a similar point of view using varied other reasons to support the idea.

Seeing as the ASX is at 5,919.20 today, the new top estimate may be in fact be realisable. Make up your own minds on this though, and the chart unfortunately can't be read to tell us when.

An important aspect to understand using simple TA.

Even if you don't use charts, subconsciously you process your interpretations of energy, momentum and market pysychology and you are equally at risk from the elements of chaos that the charts cannot predict, such as: a Greenspan statement, the release of data, a rate rise, strikes, other political events, war, natural disaster, or even the non-discovery of resources after drilling (watchout WMT ) etc.

It's about understanding the likelihood of a move and preparing for any outcome, though directional bias could taint the analysis just like a river.

With Forums though, like most people I just have to watch out that it is not merely wishful thinking, or peer brainwashing.

An understanding of TA may help here.

 

[coyotte]

Had to get my head together and get back to basics!

This is what I always thought T/A was about --- no prediction in this analysis just if A or if B happens then this is the probable result.


Apart from a Point Chart, you can't get much closer to price than a P&F Chart.
Though not in the style of Du Plessis, it will do for this exercise.

Perc Box size with a 3 BOX reversal of the XJO

Currently:

Long: Double P&F TOP needed at the 6000 box and a X in the 6100 box

Short: Double P&F BOTTOM needed at the 4900 box and a O in 4850 box

Well above the P&F UP trend line -- under P&F rules a SHORT should NOT be initiated at this point.

Any new DOUBLE P&F TOPS or BOTTOMS during any advance/decline would overule the present TOPS and BOTTOMS.

Cheers.

 

[tech/a]

Coyotte.

If your into Point and figure you may wish to track down the publication by Michael Burke.
"Three Point Reversal Method of Point and Figure Construction and Formations."
Its very rare Published by Chartcraft New Rochelle New York.

An excellent work.

Why have you chosen a 50 point box size?
You will have completely different analysis with a 5 or 10 point box size.

 

[coyotte]

Coyotte.

Why have you chosen a 50 point box size?
You will have completely different analysis with a 5 or 10 point box size.

Because it's a Doyle/Craftchart Style.

Cheers

 

[Sean K]

Had to get my head together and get back to basics!

This is what I always thought T/A was about --- no prediction in this analysis just if A or if B happens then this is the probable result.

If A happens then B will probably happen.

Is this not a prediction?

I'm confused coyotte. I thought you were arguing that T/A was not about predicting? Am I reading this wrong??

Sorry, if I've missed the plot here, it's early.

 

[coyotte]

Reading TOO much into it

Cheers

 

[tech/a]

Because it's a Doyle/Craftchart Style.

Cheers

Which means?

3 box reversal puts it at 150 points a plot.

Like using a 200 M/A for trading decisions.
Hardly indicative of whats happening in the near term.
But does confirm that longer term---the Bullish view is still confirmed.
All longer term analysis is in sync with this view.

Like Kennas I'm not understanding your point here.
On the one hand your suggesting analysis has lost the plot---yet confirm the analysis in the longer timeframe (using point and figure as the chosen technical tool)---which no one here is suggesting is any different to the analysis which has been posted here.

 

[ducati916]

Techies, as confused as ever!

jog on
d998

 

[motorway]

Had to get my head together and get back to basics!

This is what I always thought T/A was about --- no prediction in this analysis just if A or if B happens then this is the probable result.


Apart from a Point Chart, you can't get much closer to price than a P&F Chart.
Though not in the style of Du Plessis, it will do for this exercise.

Perc Box size with a 3 BOX reversal of the XJO

Currently:

Long: Double P&F TOP needed at the 6000 box and a X in the 6100 box

Short: Double P&F BOTTOM needed at the 4900 box and a O in 4850 box

Well above the P&F UP trend line -- under P&F rules a SHORT should NOT be initiated at this point.

Any new DOUBLE P&F TOPS or BOTTOMS during any advance/decline would overule the present TOPS and BOTTOMS.

Cheers.

ChartCraft method was developed for USA markets and End of day data using Hi and low..

The ChartCraft material is good to read... However I think Box sizes maybe do not translate as well to Australian markets (They should be smaller... But then Chartcraft uses the large box size as an added filter to keep you out of
the less active markets).

I would imagine If we had more context on your chart XJO would be well above the bullish support line, maybe pressing up on a bullish resistance line?

You have a potential High pole there..

Time does not move a P&F chart only Market action.

The chart will speed up and slow down... The top of the pole could have been a consolidation point... Any reversal off such an uncorrected spike.

Is a stop look and listen point.

If the pole retraces 50% Then that is a sign of weakness.

On a chartcraft scaled chart... The large box sizes and reversal.

Make it at the very best a longish medium term chart..

The chart does emphasize an aspect of our mkt Vs USA.

On P&F charts I have seen Our mkt has a very narrow top not much work or activity.
USA mkts have much more activity at the top more backing and filling.

Sideways is not time ... It is (esp on these charts) distribution.

From P&F charts XJO got overbought... NASDAQ etc had real distribution
preceding the recent weakness..


motorway

 

[tech/a]

Ducster.

Ive noticed that there is a least one fundie who suffers from valuation confusion.

IE
Various analysis suggests to the fundie that the stock is undervalued---so he buys.
stock/stocks fall a FURTHER 50% +.

Stones in glass houses comes to mind.

Like you an experienced fundamentalist---there is NO confusion amongst seasoned Technical Practitioners.

 

[motorway]

If A happens then B will probably happen.

Is this not a prediction?

I'm confused coyotte. I thought you were arguing that T/A was not about predicting? Am I reading this wrong??

Sorry, if I've missed the plot here, it's early.

Anticipation Vs prediction...

With anticpation I get into a position ahead of time..

On the tennis Court I am ready already for that back hand..
Moving left I anticipate right... It goes down to go up.. But when it is on tip toe there is little ability to jump higher... Anticipation putting oneself in a favourable position.. The opposite of shutting ones eyes and gambling ..

Prediction is dropping out of the flow deciding that he has played the back hand every third shot.... And disregarding everything else.. gambling all on that happening...

Anticipation Vs Prediction

dancing Vs Wrestling

going with the flow in an insightful way
or trying to force the issue

Now sometimes People mix these meanings up..
And mean one while they say the other..

motorway

 

[ducati916]

tech/a

You techies are fooling me then.
What happened to the *high probability* etc?

Technical analysis is a 50/50 coin toss, managed via stoplosses [or other]
And that is what is coming across.

jog on
d998

 

[coyotte]

The original post in this thread was directed at (SELF INCLUDED) at the posts that had been appearing over the preceding fortnight STATING that the XJO was in a EW corrective move by posters who have very limited experience in this school -- some even blatantly overiding the views and advice of those who do have the qualification of experience in this field.

Even having the naivety to be predicting prices under EW analysis and the STATEMENT that this is a correction without any mention of possible counter views from the schools that they are familiar with .

The P&F chart is simply another school --- am not advacoting that it is the "holy grail" and as with all methods there are other schools contained within P&F eg: DuPlessis .


Even the old stand by 10/40 weekly (another school) has shown throughout this period that the XJO was still in a Bullish Stage .

What amazed me in all this was no one was seriously challenged .

I,m not actually saying the methods had lost the plot --- BUT some of the practitioners certainly appear to have

Cheers

 

[ducati916]

I,m not actually saying the methods had lost the plot --- BUT some of the practitioners certainly appear to have

Ok I get it now, T/A is still valid, it's simply the practitioners that are challenged.

jog on
d998

 

[tech/a]

Duc

as with all analysis and in most phases of life---YES.

 

[ducati916]

tech/a

And that's where we fundamentally disagree. Analysis is predictive. Further, when the analyst is talented the timing will be reasonably close.

jog on
d998

 

[tech/a]

Well that could be argued with just about anything.

(1) If I do this then I will drive a ball 250 meters down a fairway.
(2) If I do that I will Fly this plane from point A to B.

Analyse by Technical,Fundamental,Throwing darts,by doing both this and that this is likely to occur.

In pretty well all cases the result will GENERALLY determinated by the ability of the practitioner.
Some better/more experienced/or talented than others.

Cant see a problem its simply life in motion is it not?

 

[motorway]

The original post in this thread was directed at (SELF INCLUDED) at the posts that had been appearing over the preceding fortnight STATING that the XJO was in a EW corrective move by posters who have very limited experience in this school -- some even blatantly overiding the views and advice of those who do have the qualification of experience in this field.

Even having the naivety to be predicting prices under EW analysis and the STATEMENT that this is a correction without any mention of possible counter views from the schools that they are familiar with .

The P&F chart is simply another school --- am not advacoting that it is the "holy grail" and as with all methods there are other schools contained within P&F eg: DuPlessis .


Even the old stand by 10/40 weekly (another school) has shown throughout this period that the XJO was still in a Bullish Stage .

What amazed me in all this was no one was seriously challenged .

I,m not actually saying the methods had lost the plot --- BUT some of the practitioners certainly appear to have

Cheers

P&F is P&F

Chartcraft is well known

But did not invent P&F or three box reversal charts even..

There recommened box sizes

Do not work on our markets or stocks

With $100 stocks Chartcraft Box size is 2%

With stocks at $5 it is 10% That means 30% for the reversal

It is almost a screen to only keep you in $100 stocks

There are good reasons for this with USA mkts..

Why so big a box size ?

This gets to the core of what a P&F is charted in and the nature of time..

P&F at it's purest is a timeless chart with out time constraint or deformation.

IF you are only going to use end of day data
Then to make it real P&F the box size has to be such that intra day reversals are not a factor... If there are No intra day reversals that would trigger a posting to the chart.. Then the chart even using end of day data is timeless
and without constraint and deformation.. Only it is at a very low resolution

miles above the action...

chartcraft box size for BHP is $1 that means $3 for the reversal ..

motorway