Technical Analysis - Smoke & Mirrors?

[Boggo]

Boggo

They are all momentum based all telling you the same thing.

Yes they are and from that piccy of ASL I would initially say the same.

In the highlighted area where they are all telling me approximately the same there is also a chart pattern and a few other parameters that at a point provide a heads up.

In reality what the indicators do is remove or disable the potential signal unless a combination of conditions are met.

Yeah, I know what you are thinking and I know I will never change your view of indicators in any form but in this form work well, very well actually at picking up impending breakouts for the eyeball test.

 

[ginar]

I'll put up $500 to support Joe if anyone can find me a Single Indicator which shows a profit better than Buy and hold over a period of 2 yrs over the XAO.(any 2 yrs)

In fact I doubt you could get one over the XJO.

I reserve the right to test it on my software if you find it.

Ever read "The Encyclopedia of Technical Indicators"?
100s of them not one out performed.

If Proven wrong Joe gets $500

Now I lost to Sir O once so happy to lose again.

XAO not tradable and XJO flawed data with opens same as previous days close according to the data . im pretty busy atm with things qld atm but i will get back to this at a later stage . yeah ive read all the books , by the way your original statement said profitable without any caveats , i'll work on it when i can and get back to you .

 

[joea]

Can test anything you want but will guarantee you NOT ONE will return a profit as a stand alone Indicator.

One of the reasons I Dont use them in discretionary trading at all and only limited in Systems trading.

Hi Tech/a
I think I will have to clarify myself a little.
I agree with you on having more than one.

However, I was attempting to clarify that new traders will trial a indicator and they may conclude if it works or not. However they may not have all the little rules that are available to the indicator in the document covering the indicator.

Example. In Acheliss " Technical Analysis from A- Z " he has 22 lines of interpretation and one graph. Of DMI.
In " Charting Power Stocks" there are 5, A4 pages of description and understanding, 5 charts and two diagrams.
In addition it gives the pitfalls of a sideways market and three additional rules to help reduce losses in this type of market.
Basically for people to understand a single indicator, they will probably need to visit more than one site.
I do realise that DMI is a complex indicator.

Finally if Williams%R can be used to convert $10,000 into >$1million in a 52 weeks competition. Then the fellow can teach his daughter to do a similar thing, I would think
he would understand that indicator much more than the average trader.

I just think the new traders have that much to choose from, they spend an enormous
ammount of time trying everything before finally settling on a method.
Maybe the "KISS" principle is the way to go.

Finally I think " Trading is not about making money-money will flow from good trading".

Cheers .

 

[tech/a]

XAO not tradable and XJO flawed data with opens same as previous days close according to the data . im pretty busy atm with things qld atm but i will get back to this at a later stage . yeah ive read all the books , by the way your original statement said profitable without any caveats , i'll work on it when i can and get back to you .

Constituents of the XAO NOT the XAO chart itself.
Constituents of the XJO NOT the XJO chart itself.

No caveats just a realistic time period and data set of course I wish to check it.

Hi Tech/a
I think I will have to clarify myself a little.
I agree with you on having more than one.

I certainly DONT mean 2 oscillators are better!

However, I was attempting to clarify that new traders will trial a indicator and they may conclude if it works or not. However they may not have all the little rules that are available to the indicator in the document covering the indicator.

Example. In Acheliss " Technical Analysis from A- Z " he has 22 lines of interpretation and one graph. Of DMI.
In " Charting Power Stocks" there are 5, A4 pages of description and understanding, 5 charts and two diagrams.
In addition it gives the pitfalls of a sideways market and three additional rules to help reduce losses in this type of market.
Basically for people to understand a single indicator, they will probably need to visit more than one site.
I do realise that DMI is a complex indicator.

Its only complex as there are various interpretations to ATTEMPT to make it FIT where it fails!

Finally if Williams%R can be used to convert $10,000 into >$1million in a 52 weeks competition. Then the fellow can teach his daughter to do a similar thing, I would think
he would understand that indicator much more than the average trader.

You honestly think Williams uses one indicator.
Williams was lucky enough to get onto a futures move that gave that return.
I note he nor his daughter have been able to duplicate it. Sure the developer will have a better understanding of what they developed but if youve read Williams Indicators and Oscillators fill pages in books not 000,000's in bank accounts.
His OOPS pattern---now that is practical.

I just think the new traders have that much to choose from, they spend an enormous
ammount of time trying everything before finally settling on a method.
Maybe the "KISS" principle is the way to go.

22 ways of interpreting one indicator---SIMPLE?
Hell I look at a single bar and can make an instant decision---even if its to do nothing

Finally I think " Trading is not about making money-money will flow from good trading".

Cheers .

So WHAT IS good trading?

 

[joea]

Because I know that is a trick question, my answer is "what you do".
Because I think that is the only correct one you will accept.
But I say this with humor, not a "hidden agenda".
Joe

 

[tech/a]

Because I know that is a trick question, my answer is "what you do".
Because I think that is the only correct one you will accept.
But I say this with humor, not a "hidden agenda".
Joe

I'm not that devious.

Good trading is profitable trading.

We all know you wont get it (Profitable trading) without Positive expectancy and we should know that the best chance of acheiving that is to test what your doing and see if over time it produces a positive expectancy.-----Most (90%) dont do this and most of them fail.

These are the Discretionary traders Fundamental and/or Technical.

Very few of these guys survive let alone KNOW they are trading a profitable methodology---if they actually have a method!!!
If you read through most of the A,B,C threads they consist of opinion---nothing on Trading profitably.
Because to them getting on a trade which is a winner IS trading and sitting in a loser (because its undervalued and looking more attractive every day it tanks) IS trading-------to them---until they run out of capital---then they give up or actually LEARN.

Trade management is never discussed let alone PORTFOLIO management.

The Business of trading is rarely treated as a business and by most is treated like Gambling.
They dont have to Gamble---they just dont realise that.

 

[joea]

I'm not that devious.

Good trading is profitable trading.

We all know you wont get it (Profitable trading) without Positive expectancy and we should know that the best chance of acheiving that is to test what your doing and see if over time it produces a positive expectancy.-----Most (90%) dont do this and most of them fail.

These are the Discretionary traders Fundamental and/or Technical.

Very few of these guys survive let alone KNOW they are trading a profitable methodology---if they actually have a method!!!
If you read through most of the A,B,C threads they consist of opinion---nothing on Trading profitably.
Because to them getting on a trade which is a winner IS trading and sitting in a loser (because its undervalued and looking more attractive every day it tanks) IS trading-------to them---until they run out of capital---then they give up or actually LEARN.

Trade management is never discussed let alone PORTFOLIO management.

The Business of trading is rarely treated as a business and by most is treated like Gambling.
They dont have to Gamble---they just dont realise that.

I agree.
Cheers

 

[Gringotts Bank]

I'll put up $500 to support Joe if anyone can find me a Single Indicator which shows a profit better than Buy and hold over a period of 2 yrs over the XAO.(any 2 yrs)

Any two years? Easy. A smoothed moving average applied to Jun 2008-Jun 2010.

If you loosen the parameters out, almost any indicator would be profitable during 2003-2007.

You're welcome Joe

 

[tech/a]

This is time wasting rubbish which doesnt help anyone.

Constituents of the XAO NOT the XAO chart itself.
Constituents of the XJO NOT the XJO chart itself.

You give me the parameters you want to run and the Indicator you want to run and Ill run the Tests for you.

I guess a 100 SMA would be your first choice run in say 2005-2007?

 

[Boggo]

These are the backtest results of my breakout system using the method described earlier in this thread.

This cannot be done with a single indicator in my opinion.

This is the ASX300 and it is based on the actual start date of 01/07/2003.

Top data is daily and bottom data is weekly and the bottom chart is daily $ value.

The end result difference in the final figure between both is almost the difference between the two lots of transaction costs.

(click to expand)

 

[Gringotts Bank]

Well if you want to go changing the rules after you start...

I can get an out performance during that period with stocks where:

MA(v,5)*c>10,000,000 which is close to asx 200 stocks as I can get, since I don't have a separate category for that.

Just a simple MA cross, using JurikJMA, which you probably don't have.

Anyway, the results are:

+5% versus Ords which returned -17%

 

[Gringotts Bank]

btw, that's long and short. Or is that not allowed either?!!

I've changed something somewhere, now it's +1.6% vs -17%.



Ticker Trade Date Price Ex. date Ex. Price % chg Profit % Profit Shares Cum. Profit
TLS Short 12/05/2008 12:00:00 PM 4.54 14/05/2008 12:00:00 PM 4.64 2.20% -120.21 -2.40% 1101 -120.21
LGL Short 13/05/2008 12:00:00 PM 2.96 15/05/2008 12:00:00 PM 3.01 1.69% -94.48 -1.89% 1688 -214.68
QAN Short 26/05/2008 12:00:00 PM 3.29 28/05/2008 12:00:00 PM 3.45 4.86% -257.95 -5.07% 1547 -472.63
CMJ Long 27/05/2008 12:00:00 PM 3.67 28/05/2008 12:00:00 PM 3.6 -1.91% -93.96 -2.11% 1216 -566.59
MTS Long 14/05/2008 12:00:00 PM 4.16 2/06/2008 12:00:00 PM 4.08 -1.92% -106.24 -2.12% 1204 -672.83
MTS Short 2/06/2008 12:00:00 PM 4.08 3/06/2008 12:00:00 PM 4.2 2.94% -154.06 -3.14% 1201 -826.9
TLS Long 14/05/2008 12:00:00 PM 4.64 10/06/2008 12:00:00 PM 4.55 -1.94% -107.03 -2.14% 1079 -933.92
QAN Long 28/05/2008 12:00:00 PM 3.45 10/06/2008 12:00:00 PM 3.32 -3.77% -160.43 -3.96% 1173 -1094.35
MGX Short 10/06/2008 12:00:00 PM 2.86 11/06/2008 12:00:00 PM 2.91 1.75% -102.45 -1.95% 1837 -1196.8
QAN Short 10/06/2008 12:00:00 PM 3.32 11/06/2008 12:00:00 PM 3.38 1.81% -70.97 -2.01% 1064 -1267.77
LGL Short 11/06/2008 12:00:00 PM 2.88 17/06/2008 12:00:00 PM 2.98 3.47% -199.23 -3.68% 1882 -1467
MGX Long 11/06/2008 12:00:00 PM 2.91 3/07/2008 12:00:00 PM 2.8 -3.78% -126.93 -3.98% 1097 -1593.93
CGF Short 23/05/2008 12:00:00 PM 2.04 9/07/2008 12:00:00 PM 2.18 6.86% -358.96 -7.07% 2489 -1952.9
MAP Short 28/05/2008 12:00:00 PM 2.82874 24/07/2008 12:00:00 PM 2.7528 -2.68% 128.19 2.49% 1822 -1824.71
DXS Short 16/05/2008 12:00:00 PM 1.58175 6/08/2008 12:00:00 PM 1.50552 -4.82% 232.37 4.62% 3177 -1592.33
DXS Long 6/08/2008 12:00:00 PM 1.50552 8/08/2008 12:00:00 PM 1.42929 -5.06% -276.44 -5.26% 3492 -1868.77
DXS Short 8/08/2008 12:00:00 PM 1.42929 11/08/2008 12:00:00 PM 1.44835 1.33% -76.45 -1.53% 3485 -1945.23
TTS Short 3/06/2008 12:00:00 PM 2.33563 12/08/2008 12:00:00 PM 2.37227 1.57% -84.06 -1.77% 2033 -2029.29
DXS Long 11/08/2008 12:00:00 PM 1.44835 14/08/2008 12:00:00 PM 1.39118 -3.95% -203.25 -4.14% 3387 -2232.54
TTS Long 12/08/2008 12:00:00 PM 2.37227 15/08/2008 12:00:00 PM 2.36311 -0.39% -27.32 -0.59% 1966 -2259.86
DXS Short 14/08/2008 12:00:00 PM 1.39118 15/08/2008 12:00:00 PM 1.42929 2.74% -138.34 -2.94% 3380 -2398.2
DXS Long 15/08/2008 12:00:00 PM 1.42929 19/08/2008 12:00:00 PM 1.38641 -3.00% -185.66 -3.20% 4063 -2583.86
TTS Short 15/08/2008 12:00:00 PM 2.36311 20/08/2008 12:00:00 PM 2.38143 0.78% -33.12 -0.98% 1436 -2616.99
CPA Short 19/08/2008 12:00:00 PM 1.31 20/08/2008 12:00:00 PM 1.32 0.76% -54.21 -0.96% 4292 -2671.19
GMG Short 19/05/2008 12:00:00 PM 3.71875 27/08/2008 12:00:00 PM 2.67258 -28.13% 1400.58 27.96% 1347 -1270.61
TTS Long 20/08/2008 12:00:00 PM 2.38143 1/09/2008 12:00:00 PM 2.31732 -2.69% -91.31 -2.89% 1327 -1361.92
TTS Short 1/09/2008 12:00:00 PM 2.31732 3/09/2008 12:00:00 PM 2.36311 1.98% -78.89 -2.18% 1563 -1440.81
MAP Long 24/07/2008 12:00:00 PM 2.7528 16/09/2008 12:00:00 PM 2.49651 -9.31% -501.89 -9.50% 1919 -1942.7
DXS Long 27/08/2008 12:00:00 PM 1.41976 16/09/2008 12:00:00 PM 1.33401 -6.04% -365.08 -6.23% 4125 -2307.78
DXS Short 16/09/2008 12:00:00 PM 1.33401 17/09/2008 12:00:00 PM 1.37212 2.86% -180.12 -3.06% 4413 -2487.9
CGF Long 9/07/2008 12:00:00 PM 2.18 18/09/2008 12:00:00 PM 2.07 -5.05% -247.35 -5.24% 2165 -2735.25
MGR Short 16/09/2008 12:00:00 PM 2.265 19/09/2008 12:00:00 PM 2.57589 13.73% -611.57 -13.94% 1937 -3346.82
TTS Long 3/09/2008 12:00:00 PM 2.36311 22/09/2008 12:00:00 PM 2.31822 -1.90% -74.31 -2.10% 1499 -3421.13
CGF Short 18/09/2008 12:00:00 PM 2.07 22/09/2008 12:00:00 PM 2.4 15.94% -722.79 -16.16% 2161 -4143.92
GMG Short 23/09/2008 12:00:00 PM 2.32092 24/09/2008 12:00:00 PM 2.46159 6.06% -360.72 -6.27% 2480 -4504.64
TTS Long 23/09/2008 12:00:00 PM 2.4327 29/09/2008 12:00:00 PM 2.2896 -5.88% -318.56 -6.08% 2155 -4823.2
GMG Long 24/09/2008 12:00:00 PM 2.46159 29/09/2008 12:00:00 PM 2.32092 -5.71% -318.83 -5.91% 2192 -5142.03
MTS Short 30/09/2008 12:00:00 PM 3.97 1/10/2008 12:00:00 PM 4.3 8.31% -384.27 -8.52% 1136 -5526.3
DXS Long 17/09/2008 12:00:00 PM 1.37212 8/10/2008 12:00:00 PM 1.27683 -6.94% -407.33 -7.14% 4159 -5933.63
LGL Short 3/10/2008 12:00:00 PM 2.63 9/10/2008 12:00:00 PM 2.64 0.38% -23.96 -0.58% 1569 -5957.59
LGL Long 9/10/2008 12:00:00 PM 2.64 10/10/2008 12:00:00 PM 2.49 -5.68% -241.07 -5.88% 1554 -6198.66
DXS Short 8/10/2008 12:00:00 PM 1.27683 21/10/2008 12:00:00 PM 1.31018 2.61% -149.17 -2.81% 4151 -6347.84
DXS Long 21/10/2008 12:00:00 PM 1.31018 22/10/2008 12:00:00 PM 1.21013 -7.64% -403.41 -7.83% 3933 -6751.25
CPA Long 20/08/2008 12:00:00 PM 1.32 24/10/2008 12:00:00 PM 1.2 -9.09% -535.29 -9.28% 4369 -7286.54
LGL Short 10/10/2008 12:00:00 PM 2.49 3/12/2008 12:00:00 PM 2.34 -6.02% 225.01 5.83% 1550 -7061.52
LGL Long 3/12/2008 12:00:00 PM 2.34 5/12/2008 12:00:00 PM 2.25 -3.85% -165.06 -4.04% 1745 -7226.58
LGL Short 5/12/2008 12:00:00 PM 2.25 8/12/2008 12:00:00 PM 2.32 3.11% -129.9 -3.31% 1742 -7356.48
LGL Long 8/12/2008 12:00:00 PM 2.32 10/12/2008 12:00:00 PM 2.26 -2.59% -105.46 -2.78% 1633 -7461.94
LGL Short 10/12/2008 12:00:00 PM 2.26 11/12/2008 12:00:00 PM 2.35 3.98% -154.21 -4.19% 1630 -7616.16
DXS Short 22/10/2008 12:00:00 PM 1.21013 11/02/2009 12:00:00 PM 0.805168 -33.46% 1581.57 33.30% 3925 -6034.59
DXS Long 11/02/2009 12:00:00 PM 0.805168 17/02/2009 12:00:00 PM 0.743232 -7.69% -485.72 -7.88% 7651 -6520.31
DXS Short 17/02/2009 12:00:00 PM 0.743232 13/03/2009 12:00:00 PM 0.743232 0.00% -11.69 -0.20% 7865 -6532
DXS Long 13/03/2009 12:00:00 PM 0.743232 16/03/2009 12:00:00 PM 0.719411 -3.21% -198.48 -3.40% 7850 -6730.48
DXS Short 16/03/2009 12:00:00 PM 0.719411 17/03/2009 12:00:00 PM 0.757525 5.30% -310.16 -5.50% 7834 -7040.63
DXS Short 20/03/2009 12:00:00 PM 0.65271 24/03/2009 12:00:00 PM 0.733704 12.41% -672.39 -12.62% 8162 -7713.02
OZL Short 23/05/2008 12:00:00 PM 3.33 1/06/2009 12:00:00 PM 0.9 -72.97% 3699.3 72.85% 1525 -4013.72
CPA Short 24/10/2008 12:00:00 PM 1.2 3/06/2009 12:00:00 PM 0.84 -30.00% 1560.71 29.83% 4360 -2453.02
OZL Long 1/06/2009 12:00:00 PM 0.9 4/06/2009 12:00:00 PM 0.87 -3.33% -204.6 -3.53% 6440 -2657.62
CPA Long 3/06/2009 12:00:00 PM 0.84 4/06/2009 12:00:00 PM 0.8 -4.76% -284.23 -4.96% 6826 -2941.85
OZL Short 4/06/2009 12:00:00 PM 0.87 5/06/2009 12:00:00 PM 0.885 1.72% -108.66 -1.93% 6485 -3050.51
CPA Short 4/06/2009 12:00:00 PM 0.8 15/06/2009 12:00:00 PM 0.825 3.12% -187.76 -3.33% 7052 -3238.27
LGL Long 11/12/2008 12:00:00 PM 2.35 7/07/2009 12:00:00 PM 2.85 21.28% 743.19 21.06% 1502 -2495.08
LGL Short 7/07/2009 12:00:00 PM 2.85 16/07/2009 12:00:00 PM 2.92 2.46% -126.69 -2.66% 1672 -2621.76
LGL Long 16/07/2009 12:00:00 PM 2.92 17/07/2009 12:00:00 PM 2.87 -1.71% -88.65 -1.91% 1589 -2710.41
CFX Long 17/07/2009 12:00:00 PM 1.745 28/07/2009 12:00:00 PM 1.71 -2.01% -100.29 -2.20% 2608 -2810.71
TPI Long 28/07/2009 12:00:00 PM 1.29 14/08/2009 12:00:00 PM 1.1 -14.73% -663.94 -14.91% 3451 -3474.64
TPI Short 14/08/2009 12:00:00 PM 1.1 17/08/2009 12:00:00 PM 1.17 6.36% -248.9 -6.57% 3444 -3723.54
JHX Short (6) 26/03/2009 12:00:00 PM 4.05 15/10/2009 12:00:00 PM 8.09838 99.96% -4665.55 -100.26% 1149 -8389.09
HVN Short 30/09/2008 12:00:00 PM 3.09 6/11/2009 12:00:00 PM 4.11 33.01% -1826.36 -33.24% 1778 -10215.45
MGR Long 1/06/2009 12:00:00 PM 1.06632 4/12/2009 12:00:00 PM 1.43 34.11% 1009.51 33.87% 2795 -9205.94
MGR Short 4/12/2009 12:00:00 PM 1.43 8/12/2009 12:00:00 PM 1.455 1.75% -77.83 -1.95% 2791 -9283.77
MGR Long 8/12/2009 12:00:00 PM 1.455 10/12/2009 12:00:00 PM 1.42 -2.41% -101.85 -2.60% 2689 -9385.61
MGR Short 10/12/2009 12:00:00 PM 1.42 11/12/2009 12:00:00 PM 1.46 2.82% -115.09 -3.02% 2684 -9500.7
CNP Open Short 12/05/2008 12:00:00 PM 0.385 14/01/2010 12:00:00 PM 0.28 -27.27% 1355 27.10% 12987 -8145.71
MRE Open Short 13/05/2008 12:00:00 PM 2.93279 14/01/2010 12:00:00 PM 0.731693 -75.05% 3744.43 74.93% 1704 -4401.28
IFN Open Long 17/06/2008 12:00:00 PM 1.64 14/01/2010 12:00:00 PM 1.46 -10.98% -583.17 -11.16% 3185 -4984.45
MGX Open Short 3/07/2008 12:00:00 PM 2.8 14/01/2010 12:00:00 PM 1.805 -35.54% 1083.49 35.37% 1094 -3900.96
OZL Open Long 5/06/2009 12:00:00 PM 0.885 14/01/2010 12:00:00 PM 1.205 36.16% 2025.09 35.92% 6370 -1875.88
CPA Open Long 15/06/2009 12:00:00 PM 0.825 14/01/2010 12:00:00 PM 0.94734 14.83% 829.02 14.61% 6876 -1046.85
TPI Open Long 17/08/2009 12:00:00 PM 1.17 14/01/2010 12:00:00 PM 1.38 17.95% 627.54 17.73% 3025 -419.32
IPL Open Long 6/11/2009 12:00:00 PM 2.62 14/01/2010 12:00:00 PM 3.64 38.93% 1416.19 38.69% 1397 996.88
MGR Open Long 11/12/2009 12:00:00 PM 1.46 14/01/2010 12:00:00 PM 1.62 10.96% 397.32 10.75% 2532 1394.2

 

[tech/a]

btw, that's long and short.

Nah not allowed you chose the period.
Cant have it ALL your way.

Oh and you haven't out performed buy and hold.

 

[It's Snake Pliskin]

Why does a beginners thread have a challenge in it? I don't see this as helpful for people wanting to chat as a beginner. Why not start a challenge thread in the strategy forum?
We could even have pictures of chests to pin the results on?

 

[tech/a]

Why does a beginners thread have a challenge in it? I don't see this as helpful for people wanting to chat as a beginner. Why not start a challenge thread in the strategy forum?
We could even have pictures of chests to pin the results on?

Because GB asked me to put my money where my mouth is.
I dont believe a single indicator gives you an edge.
GB does.
Adds interest
I personally would prefer gold stars on the forehead.

 

[It's Snake Pliskin]

Because GB asked me to put my money where my mouth is.
I dont believe a single indicator gives you an edge.
GB does.
Adds interest
I personally would prefer gold stars on the forehead.

Who is GB?
Price as a single indicator?

 

[Wysiwyg]

Look at it this way. If you take a technical entry point into a security, it is only after that entry do you know if it worked or not.
All T.A. is hindsight representation. A 50/50 bet. But! There may be certain technical markers that seem to produce more certainty than others. After all, we are looking for repetition of an event to capitalise on. A better than 50/50 bet.

This is my post from year 2010 so I have had some more experience since then. My most noticeable recurring adverse result is that whenever I put money on a trade due to favourable past technical signal entry and ensuing price action, the price action is different more often. When I exit on stop loss the price more often than not reverses. I begin to wonder if I am being taken for a ride by the market. Sought of squeezed dry slowly. It could be trading during volatility being the reason. Market timing off another reason. I have enemies too.

 

[Trembling Hand]

I begin to wonder if I am being taken for a ride by the market.

Or maybe your beliefs. How do you know that risking dollars on "favourable past technical signal entry and ensuing price action" is actually favourable?

 

[Wysiwyg]

Or maybe your beliefs. How do you know that risking dollars on "favourable past technical signal entry and ensuing price action" is actually favourable?

I have found that it isn't for me as I stated in my post.

My most noticeable recurring adverse result is that whenever I put money on a trade due to favourable past technical signal entry and ensuing price action, the price action is different more often.

 

[tech/a]

Wyzi

What is for you?