Is Technical Analysis self-fulfilling or self-defeating?

This is a discussion on Is Technical Analysis self-fulfilling or self-defeating? within the Technical Analysis forums, part of the Methods category; It is probably both...for some people....

Reply
 
LinkBack Thread Tools Search this Thread
Old Dec 9, 2010, 5:24pm   #8
 
Shakone's Avatar
Joined Feb 2009
Re: Is Technical Analysis self-fulfilling or self-defeating?

It is probably both...for some people.
Shakone is offline   Reply With Quote
Old Dec 9, 2010, 5:31pm   #9
 
DionysusToast's Avatar
Joined Dec 2009
Re: Is Technical Analysis self-fulfilling or self-defeating?

What makes you think it is either?

What you really need to do is to find someone that is profitable with support and resistance and then give them a rigged system with support and resistance at randomly assigned levels. The trader would think he is using support and resistance when in fact he is not.

Would he succeed or fail? I rather think he's succeed - but this test will probably never happen.

I put it to you that TA is a lucky rabbits foot.
__________________
I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

Humphrey B Neill - 1931
DionysusToast is offline Software vendor   Reply With Quote
Old Dec 9, 2010, 5:56pm   #10
Joined Nov 2010
Re: Is Technical Analysis self-fulfilling or self-defeating?

sj8070 started this thread it has to be one. if enough people heed it, do they trade the "profits"away, or do they accentuate the effects. I am inclined to believe the latter.

DT, do you use no TA at all? a true Taleb disciple then?
sj8070 is offline   Reply With Quote
Old Dec 9, 2010, 5:59pm   #11
 
ThinkForexJB's Avatar
Joined Dec 2010
Re: Is Technical Analysis self-fulfilling or self-defeating?

LOL - this has the potential to become an extremely philosophical thread. Which came first, the chicken or the egg?
ThinkForexJB is offline Broker   Reply With Quote
Old Dec 9, 2010, 6:01pm   #12
 
DionysusToast's Avatar
Joined Dec 2009
Re: Is Technical Analysis self-fulfilling or self-defeating?

It does not have to be one or the other.

Let's say someone traded based on the pattern made by the leaves in their tea.

They have the tea before trading and based on the leaves left, they draw horizontal lines above and below the current price. They go long at the lines below and short at the ones above.

When they first start, this system is not good. Over time, they persevere. They get a feel for that market, they get a feel for how much leeway an entry needs to give it chance to come good. They get a feel for how to manage the trade after entry. They get a feel for when to take a trade and when not to take a trade.

Eventually, they are profitable. They are consistenly making money on this combination of tea leaves and levels.

Now - what happens when this person attempts to trade without the tea leaves and why ?
__________________
I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

Humphrey B Neill - 1931
DionysusToast is offline Software vendor   Reply With Quote
Old Dec 9, 2010, 6:02pm   #13
 
DionysusToast's Avatar
Joined Dec 2009
Re: Is Technical Analysis self-fulfilling or self-defeating?

Quote:
Originally Posted by ThinkForexJB View Post
Which came first, the chicken or the egg?
Daddy chicken came first.

This is why mommy chicken is in such a fowl mood.
__________________
I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

Humphrey B Neill - 1931
DionysusToast is offline Software vendor   Reply With Quote
Thanks! The following members like this post: sj8070
Old Dec 9, 2010, 6:05pm   #14
Joined Nov 2010
Re: Is Technical Analysis self-fulfilling or self-defeating?

sj8070 started this thread no my point is more ad extrema.

if every market participant in the whole world believed that the Pivot Point theory was 100% definite and accurate, then the market would jump discretely between these levels. thus the more a theory is propagated the more likely it is to be realised.

Therefore, in my humble opinion, if technical analysis is to have any value, one should choose the most popular indicators only
sj8070 is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
Differenece between chart analysis and technical analysis Joe Ross General Trading Chat 0 Jul 29, 2009 10:10pm
why use technical analysis? tommog Technical Analysis 9 Aug 22, 2007 4:58pm
AI for Level 2 analysis / Technical Analysis willlmanders Technical Analysis 6 Mar 25, 2007 1:11am
TA - self fulfilling prophecy? jls483 Technical Analysis 7 Apr 22, 2003 10:34pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)