Wall Street = Casino. Minus Sum Game.

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Old Jan 26, 2010, 1:46pm   #201
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Re: Wall Street = Casino. Minus Sum Game.

It's a pity that just because many new traders lose with TA that people who use pure TA properly aren't afforded the same respect that people using FA properly are.

If this wasn't such a religious debate, we'd probably care less about where to draw the line too. If news announcements are FA, including the timing of them, then consider a 1 min cable strategy, fully automated, pure TA, that has a rule to stay out of the market a few mins either side of 9.30, 10, 12, 13.30. Let's say the rule only exists because backtesting showed that volatility was too high at those times. Pure TA....
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Old Jan 26, 2010, 10:44pm   #202
 
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by robster970 View Post
Somebody posted up here recently that in the short terms it is a voting machine but in the long term it is a weighing machine. I thought this was a very succinct way of describing markets and their behaviour.
That quote was from a great fundamental analyst called Benjamin Graham many years ago. Warren Buffett's investment approach was and still is based on Ben Graham's.
Richard
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Old Jan 26, 2010, 11:48pm   #203
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by montmorencyt2w View Post
In his first posting to this thread, he was talking about "The Financial Industry", and gave examples, e.g. IPOs, then Mutual Funds, and then went on to talk about brokers, training courses, etc. I assumed his argument was the gamut of trading that tends to get talked about on T2W, a lot of which has little directly to do with stocks.
The thread may have started out with the above, but nearly all of the posts apart from the above refer to stocks, which you have chosen to ignore in your response.

The main point of the discussion I have been involved in is response to DTs assertion that "pure" TA does not work without "discretion" or "FA" input.... and in looking to define what he means by these two terms...lets not change to subject of the discussion.

Some examples :

Post 23
"A company coming to the end of it's lock-up period is part of fundamental analysis but has nothing to do with price-earnings, price-book, debt to equity etc. It is simply a moment in the life-cycle of the company where things change."

As far as 'everything else' is concerned we have
- market participant information
- scheduled announcement information
- insider activity information
- news
- company financial information
- company life-cycle information
- product release/approval/patent expiration
- industry information
- economic information (employment, inflation, interest rates, inventories, retail sales etc)
- index re-balancing"

Post 171 :
"TA purists say that everything is built into price.
They will then say that of course you stand aside during earnings & economic announcements.
But apart from that - everthing is built into price.

So - even though technicians will admit that non-technical information is needed in the case of earnings/announcements, they refuse to believe that other non-technical information could be as much or even more useful."

Post 148 :
"Mr Charts - You don't know the whole picture. How do you think he's got the right stocks on his screens at the right moment ? "

When a stock is first put on the market, there's a 4 month quiet period and a 6 month lock-up period during which insiders can't sell the shares they gave themselves. So - 4 months where they can't pump the price up followed by 2 months where they can at which time they can start to offload their holdings. For this scenario, you don't have to know everything about the company. Like a game of poker, the players may tip their hands as to what they are going to do. "

Post 141:
"Imagine you could put youself in the shoes of the people making decisions in a company & understand how their own self interests would sway things."

Post 121 :
"Right GladiatorX - did you keep an eye on XLNX & KMP yesterday as I said ?

Do you see how the earnings went the opposite way to the markets expectation ? I'm not talking about the earnings vs expected earnings but earnings vs price move prior to the earnings."

Post 125:
Do you think that a collar around stocks you don't hold would be a good strategy too or are you mostly doing that for 'insurance' purposes ?then went on to talk about brokers, training courses, etc. I assumed his argument was the gamut of trading that tends to get talked about on T2W, a lot of which has little directly to do with stocks.
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Old Jan 27, 2010, 12:16am   #204
 
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Re: Wall Street = Casino. Minus Sum Game.

Since you mention a comment of DT's about me, I thought an illustration might help illuminate.
Unfortunately I was away helping someone with the live market in the very early part of the afternoon so I wasn't trading for myself but spotted a story PRE-MARKET about BKS which added it to the watch list for the day.
There was no prior TA sign whatsoever of the move that happened once the market opened, which proves DT's point that TA alone is not the whole picture. And DT is correct !
TA however enabled people to spot a possible move BEFORE it happened and many profited as a consequence of trading the TA of the move itself. As I said, I wasn't trading then but hey, there will be other opportunities tomorrow
One picture worth a thousand words sometimes.
Richard
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Old Jan 27, 2010, 12:26am   #205
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by DionysusToast View Post
The whole point of this thread is that there is an entire industry out there 'teaching' you how to trade/encouraging you to trade too much. The industry consists ALMOST entirely of people that can't trade. It's an industry designed to suck money out of investors/traders.
I dont disagree with you on the above. This is commonly accepted.

Quote:
With that in mind - why would I pay attention to anything on Investopedia which is a part of that industry ? Do we think it's run by people who trade succesfully every day ?
The link to Investopedia was for a simple definition only. I also provided a link to Stockcharts.com, with a similar definition. The definition was provided due to various posters having different ideas on what FA meant. I'm sure you would get a similar definition from various other sources. I also considered the provision of a definition salient because my argument was that TA did not require the input of FA to be effective.

Quote:
Also - if only technicals are needed - why are people so keen to tell me I can't be using Fundamentals (i.e. non technical data) properly because it doesn't fit some internet definition ? It's all outside of technicals and therefore it's all useless in the eyes of someone taking a dogmatic technical approach. Still - is it that if I don't follow one religion, I need to follow the other ?
If anyone was being dogmatic it was yourself - the whole basis of the discussion was that TA could not be effective without FA , despite the evidence which you refused to take on board. Never once did I say that everything outside of TA was useless, and I dont think any other poster here said that, so I'm not sure where you got that one from.

The definition of FA I provided was not just "some internet definition" but actually was what FA actually is. If you take account of earnings / news etc, my point was that this was something that a TA trader would do anyway, and should be part of any TA method. So, to say that TA does not work without taking account of news / earnings does not mean that TA does not work without FA.

Also, it would not be true to say that TA does not work without taking account of news / earnings / event. Look at Claudias thread as an example, for a very successful approach.

Quote:
How would we consider the weather as a piece of tradeable information ? Again, I'd say it's fundamentals but again doesn't fit that Investopedia approach (not that I read it).

It's pure dogmatism. It's bordering on religion.
It was actually yourself who was insisting that TA did'nt work without FA, which I would suggest is dogmatic. This is the whole point of the argument.


{QUOTE] Can't I be a Muslim & a Christian ? You know - eat a bacon sandwich on Christmas morning but still have 4 wives ?

Seems I'm also being accused of using Witchcraft too ![/QUOTE]

You can be what ever you want to be, and eat as much bacon as you like, but the difficulty I have is your refusal to accept others approachs to the markets....on the one hand you insist despite the evidence that TA is not effective without FA, but then when you are taken up on this and what FA actually means you complain of a witchhunt ....
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Old Jan 27, 2010, 12:37am   #206
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by montmorencyt2w View Post
Chosen more or less at random from another thread:

http://www.trade2win.com/boards/fore...ml#post1039960

Point is, if you are looking at more than just the technicals, and have one eye on the calendar, you know that something is going to happen. You may not know for certain which way it is going to go, but you can have a bias based on wider knowledge..
Of course you need to keep an eye on the calender....no one disagrees on this.

Quote:
As for "avoiding the news...", well there are data releases almost every day, or events of note. I don't think you can avoid the news, except perhaps by avoiding trading altogether.
Well, not really....in the case of stocks earnings come out 4 times a year...other company events occasionally...you can avoid earnings, other scheduled events, and FOMC announcements rather easily ...of course you can never completely avoid all news / upgrades / downgrades whatever your approach...although daytrading does reduce this risk...
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Old Jan 27, 2010, 12:46am   #207
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by DionysusToast View Post
Indeed - it's really one and the same issue.
No - completely different issues. Refer to above posts.


Quote:
I think it's probably easier for someone totally new to learn something like this than to go through all that TA crap..
Looking for an easy option? Dogmatic ?
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Old Jan 27, 2010, 1:02am   #208
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Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by Mr. Charts View Post
Since you mention a comment of DT's about me, I thought an illustration might help illuminate.
Unfortunately I was away helping someone with the live market in the very early part of the afternoon so I wasn't trading for myself but spotted a story PRE-MARKET about BKS which added it to the watch list for the day.
There was no prior TA sign whatsoever of the move that happened once the market opened, which proves DT's point that TA alone is not the whole picture. And DT is correct !
TA however enabled people to spot a possible move BEFORE it happened and many profited as a consequence of trading the TA of the move itself. As I said, I wasn't trading then but hey, there will be other opportunities tomorrow
One picture worth a thousand words sometimes.
Richard
Not sure I understand - you say that there was no prior TA sign whatsoever of the move, but then go on to say that TA enabled people to spot a possible move BEFORE it happened ?

Surely watching out for news stories such as this, keeping an eye on the premarket gainers or opening gap ups / large gainers with reference to the opening charts would be a standard part of a TA trader / day traders method ? You would not need to study or understand any aspect of the Fundamentals of the company to do this. You could just look at premarket volume, gainers, opening gainers etc.
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