Does technical analysis work or not?

Does technical analysis work in your opinion?


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    60

EnlightenedJoe

Experienced member
1,950 95
Well, there is strong evidence the new TA guru has been caught cheating. The price never got to 2448 and he claimed to have taken a position at that price.

 

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barjon

Legendary member
10,239 1,542
Well, there is strong evidence the new TA guru has been caught cheating. The price never got to 2448 and he claimed to have taken a position at that price.
He did say in his first post " I trade futures but all calls will be based on the cash price to save confusion. "

Not sure how this avoids confusion but the cash did go to 2449.3/2450.3 on my SB platform.
 

EnlightenedJoe

Experienced member
1,950 95
He did say in his first post " I trade futures but all calls will be based on the cash price to save confusion. "

Not sure how this avoids confusion but the cash did go to 2449.3/2450.3 on my SB platform.
Yes it went there on my feed too 5+ minutes after the call. As far as I know, all bucketshops use the same price. What you saw occurred at the same time as mine.
 

foroom lluzers

Veteren member
3,612 135
He did say in his first post " I trade futures but all calls will be based on the cash price to save confusion. "

Not sure how this avoids confusion but the cash did go to 2449.3/2450.3 on my SB platform.
He thinks averaging down is part of technical analysis.No wonder Joe is getting caught.
 

Winr

Newbie
3 0
If you'll pardon the interruption from a new member (but not a new trader):

It's been said that democracy is the worst form of government--except for all other forms.

And so it is with TA. Technical analysis can produce mountains of useless data--just not as much as fundamental analysis.
 

Brumby

Established member
593 137
The main complain about TA is that it only works some of the time and not all of the time. There is only one certainty in life - death.

TA does not work all of the time because TA is attempting to capture representation of conditions. These conditions only generate certain probabilities of an outcome. We trade probabilities of outcome using TA. If you want certainty work in the mortuary.
 
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Penny Picks

Member
67 6
Tecnical Analysis w/ a touch of Fundamentals

I've been trading a long time and have used just about every Technical Indicator out there. I now have it down to 2 w/some help of some fundamentals of the stock thrown in.
1... A good stock screener
2... Debt/Equity (more debt than equity the stock is discarded.)
3... Adequate Volume. > 100,000 over a period of time.
4... Small Cap / Penny Stocks
5... Up Trend for Monthly / Weekly / Daily When all 3 are up trade the weekly by using the daily for an entry price.
Sounds like a bunch of do-do but it actually works.
The pic I show is a good example of the 2 indicators I swear by. (Both indicators are common everyday indicators found on most charting packages.)

(The pic is attached. I don't know how to add the pic.)
 

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timsk

Legendary member
6,953 1,816
. . . Sounds like a bunch of do-do but it actually works.
The pic I show is a good example of the 2 indicators I swear by. (Both indicators are common everyday indicators found on most charting packages.)
Hi Penny Picks,
Welcome to T2W.

Good post: you explain clearly and simply what you do and how you do it. Sadly, I'm afraid I'm not sold. Fair play, if it works for you that's great and, doubtless, you don't care one way or the other what I think. ;-) Nonetheless, for me, your indicators highlight their weaknesses (lagging in most cases) and why, IMO, traders use them in the wrong way. Allow me to explain . . .

By the time the Aroon indicates 'buy' on the 13th, price has already risen 20% or so from when the ADX gave its 'heads up'. If you're trading EoD then, presumably, you would have entered long on the 14th, say at the open around $6.25. That day creates a doji (bearish for some in this context) and is followed by a large red candle on the 15th. By close of play that day, your trade would have been in the red. Sure enough, price did then rally to a high of around $7.00 giving you a potential profit of $0.75 cents per share if you managed to get out at the peak. Price then drops back to $6.00 (below your entry), before making a double top at $7.00 (again, bearish for some in this context). From the 14th onward, the trade would have been in the red - or barely above break even - until the massive bull green candle in the new year. Are you really going to sit through all that because some technical indicator triggered 'buy' in mid November?

If this works for you, then I suspect there's a few devilishly 'proprietary' details that you're omitting to tell us, (which is fine, btw). Based on this chart and the description provided, I'm afraid I struggle to see how this can be a profitable stand alone strategy.
Tim.
 
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Penny Picks

Member
67 6
UR right tim. There's a couple of things I didn't include. I did layout my method in another post today. I learned along time ago to verify a trade signal before placing a trade. I'm not after every penny that can be had; just a big share of them. (y)

Some say the ADX/+-d is ok by it's self; maybe. However, the AROON gives the ADX some authority. I don't believe all that much in luck when it comes to trading. You can use a lot of other indicators but what I'm using works for me.

OH. Here's some of the hidden things in my trading method.
1... Good Stock Screener service ( I use Market Club -- I'm not affiliated with them, just a member)
2... Small Cap / Penny stocks.
3... Trends up. (Monthly / Weekly / Daily) I will trade on the Weekly with the Daily for an entry buy. (I don't know if I can show a chart)
4... Debt/Equity Ratio. (Less debt, More Equity)
5... Good Volume > 100k or so. Weak volume indicates a Pump & Dump candidate.

A trade example. $200 to invest. Stock ABC @ .015 Buy 13000 ~ ( Adjust for expenses)

The odds of that stock reaching .15 / .20 is pretty good; if it rolls over you can always bailout. That's pretty good for a $190 or so investment.

You don't get that percentage of a move in the mega-priced stocks.

This clear up what I do?:rolleyes:
 

babyjake1961

Well-known member
390 12
Bucket shops that are on the other side of people’s trades actively promote the teaching/preaching of technical analysis. Leads me to believe one cannot predict the market’s movements with it.
 

adatherton

Newbie
6 0
TA works fine, but you have to understand that it only works, say 65-70% of the time. When it fails, it can fail spectacularly, but that's what stops are for. TA is very good at giving you high ratio trades (ie we will bounce off the 200MA, so maybe a 1% stop below that, and a potential 5-10% bounce). Bulkowski (thepatternsite.com) has ranked all the patterns, and finds, for example double bottoms are very reliable. But it works more than it doesn't, and if you stick to good rations, you can consistently win.