TA debunked?

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Old May 21, 2012, 2:16pm   #1
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TA debunked?

Technical Analysis Debunked: 5 Reasons Why We Don't Believe In Charting | Stockopedia Features

Maybe?
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Old May 21, 2012, 2:31pm   #2
 
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Re: TA debunked?

I'll get me groundhog...
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Old May 21, 2012, 2:36pm   #3
 
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Re: TA debunked?

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Originally Posted by DionysusToast View Post
I'll get me groundhog...
how did I guess you'd be first up, toastie.

Well, we all got to find some reason to trade.
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Old May 21, 2012, 2:43pm   #4
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Re: TA debunked?

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Originally Posted by bashatrader View Post

Maybe?
Yeah. And maybe not. It is used, successfully.
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Old Jun 2, 2012, 9:25am   #5
 
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Re: TA debunked?

Gotta love the articles bashing ta when the authors don't have the intellect to understand ta and how human behavior, and repeated patterns play out.
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Old Jun 2, 2012, 10:27am   #6
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Re: TA debunked?

Trading is such a free field activity packed with choices and so much data can be inputted that it is not suprising that it can be done badly in an infinite number of ways. So TA as the basic philosophy of trading can be made to look ineffective. But there is no way that the basic truths of TA are incorrect -
1. prices moving in a given direction have a stronger tendency to continue than to reverse
2. price trends are interrupted by minor periods of neutral or counter-trend price action.

i.e., rising prices go up - but not in a straight line.

If you only know those two things, you can work out a profitable trading strategy. Most strategies will fail, but not because these TA truths are incorrect, but because of faulty money management, exacerbated by decisions to rely on technical indicators which are assumed to reduce risk.
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Old Jul 19, 2012, 4:42pm   #7
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Re: TA debunked?

Can't remember exactly how it goes, but there's some Mark Twain quote about how history doesn't repeat itself, but rhymes with itself (I'm sure he put it more poetically than that). But the gist is that using TA (ie expecting historical patterns to repeat themselves) isn't going to be an exact science. I reckon TA gets a hard time, much like weathermen do - we have unrealistic expectations of how often they can get it right. Nothing can really predict the future, they're just making predictions based on past data.
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Old Jul 19, 2012, 4:51pm   #8
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Re: TA debunked?

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Originally Posted by Mrs M View Post
Nothing can really predict the future, they're just making predictions based on past data.
Can someone please tell me where everyone gets this ridiculous idea that TA is predictive ? Is it written in a book somewhere ?, is there a website where this nonsense is being promoted ?

Where did this ridiculous urban myth start, and why does an alleged trading forum allow it to continue ?

I could point you to thousands of books, articles, and websites where there is clear and definite proof provided that TA is non predictive. There's a mountain of evidence to support that view.

Despite all of the evidence to the contrary, trading forums are filled with people discussing the predictive capabilities of TA. What is it about forums that lead to such irrational behavior ?
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Old Jul 19, 2012, 4:56pm   #9
 
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Re: TA debunked?

Quote:
1. prices moving in a given direction have a stronger tendency to continue than to reverse
2. price trends are interrupted by minor periods of neutral or counter-trend price action.

i.e., rising prices go up - but not in a straight line.
This has got to be the best 2 sentences I have ever read on t2w.
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Old Jul 19, 2012, 7:16pm   #10
 
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Re: TA debunked?

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Originally Posted by the hare View Post
Can someone please tell me where everyone gets this ridiculous idea that TA is predictive ? Is it written in a book somewhere ?, is there a website where this nonsense is being promoted ?

Where did this ridiculous urban myth start, and why does an alleged trading forum allow it to continue ?

I could point you to thousands of books, articles, and websites where there is clear and definite proof provided that TA is non predictive. There's a mountain of evidence to support that view.

Despite all of the evidence to the contrary, trading forums are filled with people discussing the predictive capabilities of TA. What is it about forums that lead to such irrational behavior ?

Don't these kinds of debates all hinge on what you consider TA, and what you mean by predict?

If I look at the price of the Dow and see it sitting around 12900 (so I've used some TA) today and I say tomorrow's close, price will be above 10000 is that not predictive?
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