TA for prediction

[It's Snake Pliskin]

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.

 

[It's Snake Pliskin]

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

 

[It's Snake Pliskin]

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

Thanks for the comments Wavepicker.

 

[theasxgorilla]

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

 

[chops_a_must]

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.

 

[tech/a]

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.

 

[motorway]

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

 

[trishan9390]

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.

 

[It's Snake Pliskin]

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...

 

[It's Snake Pliskin]

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......

 

[Wysiwyg]

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

 

[tech/a]

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.

 

[tcoates]

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

 

[tech/a]

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.

 

[It's Snake Pliskin]

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.

 

[It's Snake Pliskin]

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.

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)

 

[tcoates]

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

 

[It's Snake Pliskin]

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

 

[tcoates]

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,

 

[tech/a]

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.