Speculate on the markets using TA and you will lose 1% on average every month

[Hoggums]

Speculation using Technical analysis is the most deadly way of playing the markets - you have been warned !

http://www.cxoadvisory.com/individu...al-investor-performance-by-motive-and-method/

 

[0007]

Unless you're one of "The 5%" of course ............

 

[wackypete2]

haha, the professioanl advice is just as bad. confirm's something I've been saying for years. Your typical institutional analyst is the last one to the party.

Peter

 

[BBPI_FXTrader]

i'm into technical, and i see it works, so, i don't care about that graph

 

[tomorton]

This is a very interesting study. I have seen lots of academic papers that say TA can work and lots that say it can't, but this is the first I have seen that says it hasn't.

 

[cr6196]

what is TA? as far as i am aware the only papers that prove TA works is one done by someone who works at one of the federal reserve banks who found that something funny goes on around round numbers only in forex and momentum trading which isn't reli TA but does work and seems a popular quant strategy...I can't reli think of anymore tho.

As for the study above, seems pretty sketchy...only 6000 people and the fact that they found higher portfolio turnover among fundemental investors seems pretty dubious as well as the success from "intuition"...nice one! lol.

 

[shadowninja]

I posted before about a research paper on TA but the 5 methods they tried were crap ones anyway so that proved nowt.

I'd happily put money on the fact that TA in general doesn't make money. But I'd happily put money on a the fact that a newbie trying to read the news release and using his intuition will wipe out his account in minutes.

The graph, therefore, proves nothing without specific, detailed information.

 

[BSD]

I guess that's why these goons have a sorry salaried existence trying to make ends meet publishing nonsensical papers while others get filthy rich trading using TA.

"Superfund's origin dates back to 1991, when Christian Halper and Christian Baha developed a software system for the technical analysis of financial data. Within two years, this program became the leading provider of market delivery software in Austria. This success led to the development of the Quadriga Investment Group, created by Christian Baha in 1995. Today, the group has more than 280 employees worldwide. The quadriga Group launched its first alternative investment product for private investors on March 8, 1996 called the Quadriga Beteiligungs - und Vermogens AG". In 2003 the Quadriga funds were globally unified under the umbrella brand name SUPERFUND. Today, the group has more than 1.5 billion dollars under management from more than 55,000 retail and institutional investors."
http://www.superfund.com/

Technical analysis:
Trading without emotions
Sound managed futures funds like Superfund funds are based on proprietary, fully automated technical trading systems. These eliminate poor investment decisions which are often the result of human emotions. A vast range of technical indicators and historical prices are analyzed by the computerized trading systems to automatically generate buy and sell signals.
http://www.superfund.com/HP07/Superf... System.aspx

 

[BSD]

LOL next to all the buy side funds successfully using TA here's the sell sides ABN AMRO:


" ‘Ignore momentum at your peril’
By Steve Johnson

Published: February 17 2008 22:07 | Last updated: February 17 2008 22:07

Momentum investing in equity markets delivers “striking” and “remarkably persistent” excess returns, according to the most comprehensive study to date of the phenomenon.
The research, published as part of ABN Amro’s latest Global Investment Returns Yearbook, used data series stretching back to 1900 to examine the efficacy of systematic momentum investing; simply buying the stocks that had performed best over a prior time period and shorting those that had performed worst.

For example, using data on the UK’s 100 largest stocks since 1900, the team created two portfolios, one based on the 20 best-performing equities in the previous 12 months and the other the 20 worst performers. These portfolios were then re-calculated every month. The portfolio of winners produced compound annual returns of 15.2 per cent, turning £1 into more than £4.2m (€5.6m, $8.2m) by the end of 2007. In contrast, the portfolio of laggards returned just 4.5 per cent a year, turning £1 into £111." http://www.ft.com/cms/s/5a9bada2-db...rading&cd=4&hl=de&ct=clnk&gl=de&client=safari


One shouldn't mistake naysaying losers having a whinge because they aren't making money with the very real reality of those who are successes in their fields.

Life is a pyramid where many feel called but few are chosen at the top, in every field people who succeed are going to be in a tiny minority, be it an entrepreneurial startup or trading or sports or whatever, that's just the way life is.

 

[BSD]

Lol wonder where John Henry became a baseball club buying Billionaire from as apparently TA don't work yo !

He musta secretly been running one of the worlds major drug cartels without anyone cottoning on.

"John W. Henry: Trend Following Trader Now Owns Red Sox

John W. Henry Home Page
I don’t believe that I am the only person who cannot predict future prices. No one consistently can predict anything, especially investors. Prices, not investors, predict the future. Despite this, investors hope or believe that they can predict the future, or someone else can. A lot of them look to you to predict what the next macroeconomic cycle will be. We rely on the fact that other investors are convinced that they can predict the future, and I believe that’s where our profits come from. I believe it’s that simple.
John W. Henry

...when I was designing what turned out to be a trend following system...[that] approach – a mechanical and mathematical system - has not really changed at all. Yet the system continues to be successful today, even though there has been virtually no change to it over the last 18 years.

If one theme summarizes Henry’s philosophy, it is the knowledge that one cannot predict anything. Henry is a long-term follower. His philosophy is based on the premise that market prices, rather than market fundamentals, are the key aggregation of information needed to make investment decisions. He says, The markets are people’s expectations, and these expectations manifest themselves as price trends. We live in an uncertain world. One cannot predict the future of anything. In an uncertain world, identifying and following trends may be the only reasonable investment approach over the long term."
http://www.turtletrader.com/trader-henry.html

 

[BSD]

So how did James Simons make his Billions if TA don't work, is he secretly the worlds leading Mafia Don nobody knows about ?


"Renaissance Technologies is a private investment management company with over $4,000,000,000 under management founded in 1982 by Jim Simons, who (correctly) believed in the potential of technical trading models.
Renaissance Technologies"
http://www.turtletrader.com/trader-simons.html

===================================================

Since then his AUM have grown quite a bit due to his success.

Renaissance Technologies is a hedge fund management company of over 300 employees and more than $15 billion in assets under management in three funds.

Investment strategy

For over two decades, Simons' Renaissance Technologies hedge fund, which trades in markets around the world, has employed complex mathematical models to analyze and execute trades—many of them automated. Renaissance uses computer-based models to predict price changes in easily-traded financial instruments. These models are based on analyzing as much data as can be gathered, then looking for non-random movements to make predictions.

Investment returns
For the 11 years ending in December 1999, Medallion’s cumulative returns were 2,478.6 percent. Among all offshore funds over that same period, according to the database run by hedge fund observer Antoine Bernheim, the next-best performer was George Soros’ Quantum Fund, with a 1,710.1 percent return.

 

[BSD]

Toby Crabel is running a 3 Billion dollar hedge fund and is famously the author of Day Trading With Short Term Price Patterns and Opening Range Breakout which is really a misleading title as it's truly about how he made a fortune using fundamentals.

 

[BSD]

Oh my yet another Billionaire trend follower who was Trader Dailies top earning trader several times with also several times an ANNUAL income in the Billions !!!

Billionaire trader through 15 minutes work / day !

Oh my if only he knew that TA don't work yo, do you think someone here should be nice and go tell him !

 

[cr6196]

wow ur reli stretching the boundaries of what TA is...i reli don't think Simons is using TA. The naievty of the person writing the quote is pretty obvious as he says "complex mathematical models"...if you have any knowledge of quant trading the systems are neither complex nor particularly mathematical. Indeed, the reason why Simons has outperformed isn't to do with his "system" and it isn't something that has worked day in-day out. It works because the system is constantly changed when the market changes, best shown in the funds '08 performance. But it isn't clear what he does, so you shouldn't speculate and use it support your own spurious arguements.

Most of these strategies aren't really assoicated with "TA" anymore, they are quant strategies. It isn't the 80s anymore and Market Wizards, while a good read, isn't relevant either. I would add that the thing from ABN Amro also sounds like bull****, i'm not an expert on statistics but i believe a test like that wouldn't work due to non-stationarity and academic studies on momentum don't use that timeframe, altho the fact remains they come up with the same conclusion. Anyway, for every trend-follower who has made money there are more who haven't, just the same as anything else. It isn't an "answer" and it isn't the "truth". Just had to bring some balance it.

 

[BSD]

Monroe Trout retired at 40 with 900 million he made using computerized pattern recognition models which in reality of course is also just fancy talk for his being a big fan of fundamentals.

 

[BSD]

wow ur reli stretching the boundaries of what TA is...

Simons analyses price to make trading decisions and that by definition is all TA is about.

Christ what''s so complicated about this, price can go up, down or sideways, and that's it !

Per you Superfund or John Henry or T Boone Pickens etc etc with their simple trend following probably also don't use TA what !

"Superfund's origin dates back to 1991, when Christian Halper and Christian Baha developed a software system for the technical analysis of financial data. Within two years, this program became the leading provider of market delivery software in Austria. This success led to the development of the Quadriga Investment Group, created by Christian Baha in 1995. Today, the group has more than 280 employees worldwide. The quadriga Group launched its first alternative investment product for private investors on March 8, 1996 called the Quadriga Beteiligungs - und Vermogens AG". In 2003 the Quadriga funds were globally unified under the umbrella brand name SUPERFUND. Today, the group has more than 1.5 billion dollars under management from more than 55,000 retail and institutional investors."
http://www.superfund.com/

Technical analysis:
Trading without emotions
Sound managed futures funds like Superfund funds are based on proprietary, fully automated technical trading systems. These eliminate poor investment decisions which are often the result of human emotions. A vast range of technical indicators and historical prices are analyzed by the computerized trading systems to automatically generate buy and sell signals.
http://www.superfund.com/HP07/Superf... System.aspx

Frigging unbelievable no wonder 90% of people are net losers with such denial of obvious realities.

 

[BSD]

Simons analyses price to make trading decisions and that by definition is all TA is about.

"Superfund's origin dates back to 1991, when Christian Halper and Christian Baha developed a software system for the technical analysis of financial data. Within two years, this program became the leading provider of market delivery software in Austria. This success led to the development of the Quadriga Investment Group, created by Christian Baha in 1995. Today, the group has more than 280 employees worldwide. The quadriga Group launched its first alternative investment product for private investors on March 8, 1996 called the Quadriga Beteiligungs - und Vermogens AG". In 2003 the Quadriga funds were globally unified under the umbrella brand name SUPERFUND. Today, the group has more than 1.5 billion dollars under management from more than 55,000 retail and institutional investors."
http://www.superfund.com/

Technical analysis:
Trading without emotions
Sound managed futures funds like Superfund funds are based on proprietary, fully automated technical trading systems. These eliminate poor investment decisions which are often the result of human emotions. A vast range of technical indicators and historical prices are analyzed by the computerized trading systems to automatically generate buy and sell signals.
http://www.superfund.com/HP07/Superf... System.aspx

Yeah right TA don't work yo.

I would add that the thing from ABN Amro also sounds like bull****

" ‘Ignore momentum at your peril’
By Steve Johnson

Published: February 17 2008 22:07 | Last updated: February 17 2008 22:07

Momentum investing in equity markets delivers “striking” and “remarkably persistent” excess returns, according to the most comprehensive study to date of the phenomenon.
The research, published as part of ABN Amro’s latest Global Investment Returns Yearbook, used data series stretching back to 1900 to examine the efficacy of systematic momentum investing; simply buying the stocks that had performed best over a prior time period and shorting those that had performed worst.

For example, using data on the UK’s 100 largest stocks since 1900, the team created two portfolios, one based on the 20 best-performing equities in the previous 12 months and the other the 20 worst performers. These portfolios were then re-calculated every month. The portfolio of winners produced compound annual returns of 15.2 per cent, turning £1 into more than £4.2m (€5.6m, $8.2m) by the end of 2007. In contrast, the portfolio of laggards returned just 4.5 per cent a year, turning £1 into £111." http://www.ft.com/cms/s/5a9bada2-db...rading&cd=4&hl=de&ct=clnk&gl=de&client=safari


And yeah cause some guy on a board here can't get it to work ABN AMRO and their very clear backtest are full of hot air too.

Hey send em and the Financial Times who reported that a letter saying you think they're full of bull**** I guess they#re gonna be really impressed !

 

[BSD]

To be honest I don't have a clue what you're on about but what's pretty clear is that you are obfuscating beyond belief a perfectly simple issue.

Trading isn't rocket science, and all TA does is provide you with an edge in what successs relevantly is nothing more than a probability game where all you have are rising, falling or ranging prices.

AND also yes indeed contrary to your claim you can absolutely use the exact same concepts for ages like Billionaire trend follower John Henry stated who has used the same parameters for the last 18 years. I have been doing the exact same stuff fo the last 10 years of my trading career without ANY changes !

"John W. Henry: Trend Following Trader Now Owns Red Sox

John W. Henry Home Page
I don’t believe that I am the only person who cannot predict future prices. No one consistently can predict anything, especially investors. Prices, not investors, predict the future. Despite this, investors hope or believe that they can predict the future, or someone else can. A lot of them look to you to predict what the next macroeconomic cycle will be. We rely on the fact that other investors are convinced that they can predict the future, and I believe that’s where our profits come from. I believe it’s that simple.
John W. Henry

...when I was designing what turned out to be a trend following system...[that] approach – a mechanical and mathematical system - has not really changed at all. Yet the system continues to be successful today, even though there has been virtually no change to it over the last 18 years.

"
http://www.turtletrader.com/trader-henry.html

 

[BSD]

Fellow Billionaire Paul Tudor Jones is also just using TA as an euphemism for sthg else probably.

CLICK: Market Folly: Hedge Fund Manager Interviews

Excerpt from Paul Tudor Jones:

“It’s a hell of a lot easier to get an information edge on one stock than it is on the S&P 500. When it comes to trading macro, you cannot rely solely on fundamentals; you have to be a tape reader, which is something of a lost art form. The inability to read a tape and spot trends is also why so many in the relative-value space who rely solely on fundamentals have been annihilated in the past decade. Markets have consistently experienced ‘100-year events’ every five years. While I spend a significant amount of my time on analytics and collecting fundamental information, at the end of the day, I am a slave to the tape and proud of it.

[I come] from that period of crazy volatility [in] the late ’70s and early ’80s, when the amount of fundamental information available on assets was so limited and the volatility so extreme that one had to be a technician … When I got into the business, there was so little information on fundamentals, and what little information one could get was largely imperfect. We learned just to go with the chart.”

I guess one could try and twist facts around ones opinions now by stating that hey he ain't really using TA either as first of all reading charts has nothing to do with TA, and second of all he's he's just putting out some misleading info anyway lol !

 

[BSD]

Right enough of this nonsense now wasting time defending perfectly obvious and freely available facts with some whingers from the 90% department and instead time to get productive and do what needs to be done on a Friday evening and go out for some drinks and maybe a bit of party somewhere.

Have a great weekend all !!!