Does technical analysis work or not?

This is a discussion on Does technical analysis work or not? within the Technical Analysis forums, part of the Methods category; Originally Posted by babyjake1961 I mean, is it possible to be consistently profitable based on some historical market patterns? The ...

View Poll Results: Does technical analysis work in your opinion?
It does 21 55.26%
It doesn't 9 23.68%
No foggest clue 4 10.53%
What's technical analysis? 4 10.53%
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Old Apr 5, 2016, 2:02pm   #9
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Originally Posted by babyjake1961 View Post
I mean, is it possible to be consistently profitable based on some historical market patterns?
The historic pattern is that TA consistently yielded profits to the banks. On occasions it doesn't.

If you want to profit from the banks when TA doesn't work for them, it involves considerable amount of work and capital. I estimate the effort needed is more than the amount necessary to reach the PhD level in a university.
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Old Apr 5, 2016, 2:07pm   #10
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There is no data that suggests TA has a direct reference with bank profits. To have this sort of dataset would require the source of this data to have direct knowledge of how each person being measured trades
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Old Apr 5, 2016, 2:12pm   #11
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There is no data that suggests TA has a direct reference with bank profits.
Well, the solution is simple. We can always make data when it isn't available. Do some live trades and show us the bank isn't taking your money. That will give us the data. You stated you are consistently profitable. So it should be quite easy. You won't even have to tell us your technique, or be prompt in stating your trade. I will even welcome you to state the trade only after it has gone into profit.
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Old Apr 5, 2016, 2:14pm   #12
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babyjake1961 started this thread Could it be that TA works ever less due to the ever growing HFT, use of frontrunning algos, market manipulation as well as the ever increasing number of "black swans" as the global financial system becomes ever more inefficient because of unsustainable debt levels and some bizarre "non-conventional" economic policies?
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Old Apr 5, 2016, 2:19pm   #13
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Originally Posted by EnlightenedJoe View Post
Well, the solution is simple. We can always make data when it isn't available. Do some live trades and show us the bank isn't taking your money. That will give us the data. You stated you are consistently profitable. So it should be quite easy. You won't even have to tell us your technique, or be prompt in stating your trade. I will even welcome you to state the trade only after it has gone into profit.
Consistency doesn't mean you have to get every trade right. Nobody on earth can claim that title.
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Old Apr 5, 2016, 2:20pm   #14
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Quote:
Originally Posted by babyjake1961 View Post
I mean, is it possible to be consistently profitable based on some historical market patterns?. . .
Hi babyjake1961,
Same answer as before! Unfortunately, it's not possible to divorce the historical market patterns from the trader trading them. Therefore, IMO, it's not possible to say that pattern A 'works' and that pattern B 'fails'. Both will work and fail according to any number of other factors, nearly all of which are controlled by the trader trading them. Even if the trader is using a fully automated bot to trade them, there's still loads of user defined inputs which will have a huge bearing on the end result. Take a head and shoulders pattern as an example where conventional wisdom dictates entry upon the breach of the 'neckline'. Will you enter on the tick that breaches the neckline or wait for the candle/bar to close? If the latter, what time frame is that; M1, M30, 4 hourly or daily etc.? Will you use a market order, stop order, limit order or other? How much of your account will you risk and where will your stops be? Oh, so you don't use stops eh! Okay, so how will you manage your risk? Will you have a profit target and will you exit all or only part of your position when it's hit? Oh, you don't use profit targets eh! Okay, will you have a trailing stop or other means of exiting the trade? The list is pretty much endless. It's all these things that, collectively, determine whether TA patterns 'work' or not work IMO. There's no TA pattern that's inherently better or more reliable than any other; it's all down to the trader trading them.
Tim.
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Old Apr 5, 2016, 2:21pm   #15
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Originally Posted by babyjake1961 View Post
Could it be that TA works ever less due to the ever growing HFT, use of frontrunning algos, market manipulation as well as the ever increasing number of "black swans" as the global financial system becomes ever more inefficient because of unsustainable debt levels and some bizarre "non-conventional" economic policies?
TA doesn't work less or work more. It always work the same: that on aggregate, the bank(s) must make money or they go out of business.
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Old Apr 5, 2016, 2:22pm   #16
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Originally Posted by EnlightenedJoe View Post
TA doesn't work less or work more. It always work the same: that on aggregate, the bank(s) must make money or they go out of business.
Whatever you're smoking please send me some
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