Technical Crap!

Hi there!

I'm the same guy who, with the help of others took on the rockwell trading scam on this forum a few weeks ago and I must say it's good to be back!

99% B.S.:cheesy:
I'm gonna tell you why the usage of technical indicators is total b.s. in 99% of all the cases:clap:! Besides that I will also tell you why, in spite of the fact that the information is useless it's still used quite often. I'm not gonna go into too much detail, because I expect you are all more or less familiair with the basics of technical indicators.

A RANDOM CHART
Let's take a look at the technical indicators a random sales organization... Uhm, I mean an organization that tries to teach us day trading against payment uses: RSI, MACD and Bollinger Bands. Attached you'll find a screendump of two charts. Both are of the €/$ futures market, both have the same time frame (starting at vertical blue line @ 13.15hrs Amsterdam time friday Jan. 14th)

SPOT THE DIFFERENCES !
The only difference is the chart settings. One trader, John (left side) is looking at a 15min. bar chart. The other trader, Marie (right side) is looking at an 8 tick break out chart. Have a look at the attachment and spot the 437 differences... While John seems to be in a pretty flat market, Marie sees some nice swings. Who has the correct chart? There is no correct chart! The indicators tell you jack sh*t! And these are only two different charts. I'm not even talking about Diego who uses a 1min bar chart, Ashley who uses a 16 tick break out chart, Mark who uses a 5 min. bar chart and MACD that can be set in different time frames, just like RSI, Bollinger Bands, etc., etc.

THE WINNING LOTTERY TICKET:clap:!!
Besides all that... Technical indicators tell you something about price development in the PAST!! What good is that? "Damn... If I had known that the market had gone up 3 minutes ago I would have entered long". Or maybe more clear:"If I had know that today's winning lotery ticketnumber was 1245 I would have bought that one yesterday"! Yeah, duuh!!

TRADE IN THE HERE AND NOW:smart:!
I respect everybody's opinion on this subject. I just think that at least some of you might find this interesting. I have experienced that mainly CURRENT volume and CURRENT price action are of major importance.

BUT WHY ARE TECHS USED SO OFTEN:?:
It's because of the sales organizations I mentioned earlier! 99,9% Of them will teach a strategy with the help of technical indicators. And yes, if you are unfamilair with stochastics, RSI, MACD, etc. it's probably nice to learn more than the basics and tell your friends about it over a beer. Believe me, I've been there and I like beer a lot:drunk:! But as I showed you by just two simple charts, everybody sees something different! You will not make any money based on technical indicators. And even if the salesmen in their "Live Trading Support Rooms" are realy trading their own money and not just drawing lines in charts and giving opinions, chances are they have never made any real money. Not consistently! That's why they took up selling $500 courses, $4.000 personal coaching programs, etc ...

Don't let your first loss be a purchase from one of those sales organizations, you can do way better !!

Shaka ,

Frits

Your argument suggesting the use of different timeframes shows TA to be invalid is specious.

Two traders trading the same instrument; One trader could be trading it long on the Daily and another short on the 15 minute and both end up with profitable trades. That they may both use TA in their endeavours actually underlines not only the potential usefulness of these techniques, but also their adaptability.

While I fully support your point that what the price is doing NOW is what we’re interested that doesn’t mean the tick is the only way to trade it. All TFs are quite arbitrary slices of price-time, but they all respond in similar ways to the same TA techniques.

Effectiveness of TA obviously requires the caveat - in the right hands, at the right time and in the right way.

Saying you're going to prove TA useless is neither here nor there.
Unless you're going to follow up with something that does, supposedly, work.
And doesn't use historical past information. (really waiting for that one.)

Of course TA indicators and their settings only show what happened in the past, we know that.
That's not new.

With regards to different TFs give different signals using the same settings, we know that too.

And don't say Livermore didn't use indicators; that won't prove anything.

Livermores Market Key was an indicator. That he tabulated it with pens and pencil on paper doesn't make less of an indicator. It is a prime example of Techincal Analysis which, as with all TA, is ultimately based upon fundamentals regardless of granularity of TF.

We've got so used to the idea that indicators are those things you simply drag-and-drop onto charts and screens; lines, numbers, levels etc. that the idea they could be calculated by hand never occurs to us. MA as a technical indicator has been around a lot longer than silison based processing power.

Now on the issue of TA v FA, I'd really like to see Harry Hill do that one.

"I like technical analysis. But, I also like fundamental analysis. Which one is better....?"

"Only one way to find out......"

Didn't Genics say that he neither really used TA or FA??
Didn't particularly like him, but Im quite sure that he did indeed make lots of money trading. Never really gave anything away though. Im often wondering 'what else is there?' lol.

Not even worth my time to argue here....

Peter

All trading data is old. It's just a matter of how old. We are not arguing about what it is, just how much. (if you recall the old joke).

I am a prosopagnosiac, so many chart patterns are lost on me. When I have used TA, I'm usually in the data domain rather than the image domain.

redart said:

Didn't Genics say that he neither really used TA or FA??
Didn't particularly like him, but Im quite sure that he did indeed make lots of money trading. Never really gave anything away though. Im often wondering 'what else is there?' lol.

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He once described it as looking at mini market cycles on commodities. I think he was just a value trader in its truest sense, providing liquidity at tops and bottoms and being part of the crowd that get in before momentum kicks in. How he did it, who knows.

wackypete2 said:

Not even worth my time to argue here....

Peter

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Yes it is.............

10% Of all day traders makes money :clap:
It is known that only about 10% of all day traders makes money.
It's also known that 99% of "powerful day trading strategies" sales organizations sell/teach stuff based on TA. (google search day trading strategy, futures trading, day trading course, etc)

The other 90% goes broke on...
Need I say more? If the TA stuff that those sales organizations sell/teach works there would have been a lot more winning traders than that 10%
10% Makes a profit the other 90% just goes broke on:

• paying hundreds of dollars per year for subscriptions to live trading support rooms
• paying hundreds of dollars for severel day trading courses
• paying thousands of dollars for personal coaching programs
• losses because of losing strategies based on TA.

It's nice to see the reactions to this thread. As I already mentioned:"I respect everybody's opinion on this subject".

Shaka ,

Frits

robster970 said:

Yes it is.............

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, !

Stirf said:

, !

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I was trying to lull Pete into an argument because he said he didn't want to argue, mainly for some lulz.

Unfortunately, I'm with the rest of them on here and think you you're talking nonsense.

robster970 said:

I was trying to lull Pete into an argument because he said he didn't want to argue, mainly for some lulz.

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Naturally! Wouldn't be the same without!!

Peter

wackypete2 said:

Naturally! Wouldn't be the same without!!

Peter

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This site really is only for the lulz these days init.d

I tend to agree about the worthlessness of TA. Only trouble is there's not much else to use.

I think the only upside is that it gives a way to control risk - outside of that I think most setups are 50/50. However, with controlled risk and 50/50 that's good enough.

It does kind of annoy me that there are sooo many books and a whole industry of people peddling absolute garbage. And lots of people trading their strategies.

Still at least it lets others do ok with their money.

Stirf said:

10% Of all day traders makes money :clap:
It is known that only about 10% of all day traders makes money.

Click to expand...

So how do those 10% make money?

Suggesting that 90% of traders lose money by using indicators and technical analysis, while failing to even suggest that the 10% of winners do anything different to that, is by no means proof that TA or indicators are useless.

I would put the failure of traders down to lack of discipline, poor cash management, poor risk management, poor trade management, which in turn may have root issues in the fear/greed thing etc.

There are those that do very well using TA & indicators. Personally I find them very useful, tho my final criteria before entering is price moving in the trade direction.

redart said:

Didn't Genics say that he neither really used TA or FA??
Didn't particularly like him, but Im quite sure that he did indeed make lots of money trading. Never really gave anything away though. I'm often wondering 'what else is there?' lol.

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Didn't he do something clever with options, that made it relatively low-risk?

BTW we are talking about the artiste formerly known as Genics who morphed into N Rothschild aren't we? Digging around, he seems to have left the building during my own period of extended leave. On a gap year or something (him, not me).

He was critical of TA, but at least looked at Fundamentals, as far as I could tell.
He was also consistently and enormously contemptuous of spread-betters.

montmorencyt2w said:

Didn't he do something clever with options, that made it relatively low-risk?

BTW we are talking about the artiste formerly known as Genics who morphed into N Rothschild aren't we? Digging around, he seems to have left the building during my own period of extended leave. On a gap year or something (him, not me).

He was critical of TA, but at least looked at Fundamentals, as far as I could tell.
He was also consistently and enormously contemptuous of spread-betters.

Click to expand...

Personally I think he was a smarter trader than most will give him credit for. He had a bad habit of blowing up if you didn't see eye to eye with him though...which is why he left.

Peter