technical Analysis - anyone follow it?

CityTrader

Established member
665 26
Excellent article on page m30 of today's FT- confirming what all market-makers already know, and most Hedge fund trader also, that... Technical analysis does not work.
Sorry if this is a blow to those selling TA software- but one has to ask the question " if the trading systems works so well, why are they selling it? Don't you think Goldman Sachs or Calpers( Or Morgans Stanley, FIDO etc, etc) would have snapped it up by now?

Wayno
 

Trader333

Moderator
8,591 926
This has to be a subjective view and also depends on the interpretation of what TA is. There are thousands of possible TA methods and systems and I am certain that no one would be able to analyse and test them all. There are a number of highly successful traders who use TA methods to make a very good living. They may well not disclose how they do it but that doesnt mean that it hasnt worked for them. Even with the same technical indicators, each trader would probably interpret them differently and manage a trade using them differently as well. To make a blanket statement that "It's official TA does not work" is somewhat naieve although I would agree that it hasnt worked for many who have tried to use it.


Paul
 

oatman

Senior member
2,879 22
Are these the same experts who were long all the way down telling everyone not to panic?
 

CityTrader

Established member
665 26
No. I have no idea why you hate the TMF thread.... there again, maybe I just got out of bed on the wrong side this morning.....
 

bonsai

Veteren member
4,106 10
all these neagative waves !

wayno, do tell, what does work ? for you ?

apart from insider trading, I mean .

waiting with anticipation !

lol
 

rossored

Senior member
2,105 56
Don't tell me TA doesnt work when you see something like this!!

You could see that coming a mile off.

Target price should of course read 9219, not 8219.....same result, anyway.
 

Attachments

Mr. Charts

Legendary member
7,367 1,184
Good morning Wayne,
Your experience as a MM in the City for all those years is a completely different ball game to those who use TA as one of several tools in their trading. Whereas you could move prices, many of us read sentiment using many approaches, of which TA is just one.
Anyhow, you of all people shouldn't believe everything you read in the FT, especially when it's comment, not news ;-)
Our mutual friend Norman H. from City days is coming over this afternoon, if you want to chat to him let me know.
Saying TA doesn't work is doing a Chirac...........;-)
Best wishes,
Richard
 

oatman

Senior member
2,879 22
I've read the FT article, no big deal.
On reflection though I can't believe that the non-believers have NEVER looked at a chart and formed an opinion......
and that's technical analysis :cheesy:
 

CityTrader

Established member
665 26
Sorry guys.. but I firmly believe TA will only tell you what you want it to... if the markets really were there open to interpretation, there would be.. no fund managers, no hedge funds, no salesman - as every pension fund would have the perfect TA software that would interpret every price move, and accurately predict the next.


Bonsai.. I'm not being negative- I just don't believe in it, which brings we to what works for me? in spite of your flippant attitude I will answer..I am shocked that you could be naive enough to suggest insider dealing. In 15 years of PA punting I have only ever had one stock that was subject to a take over and that was after I'd held it for some 15 months.
What works for me? Instinct and intuition. And flexibility. I realise the London market has undergone a significant change in sentiment in the last 4 weeks- momentum is a lot more important that previously. Where as 6 or 8 weeks ago, you could top slice outperformers on a day trading basis - there's now enough shorts panicking, and enough momentum trade to have stopped that trade. I am currently buying under-performers ona day by day basis, and shorting stocks I firmly believe have traveled too far. I (currently)trade maybe 4 or 5 times a week ( this week I have only initiated 4 new positions, and closed 3 of those within 2 days)
This is what works for me.. Having traded for 25 years in The City- the last 16 as a market-maker I'd like to think my instincts and intuition are fairly highly honed, and will last me well.

Richard - Kids party this afternoon - say hi to him for me? thanks..
Helen - sorry I thought you were implying I'd be better of on fool.co.uk

Wayno
 

Bigbusiness

Experienced member
1,408 23
I think Technical Analysis is highly subjective and hard to program in to a system that will work for a long period of time without constant monitoring. But if I see a head & shoulders and my target is a 100 point profit, from what I have read and observed, there is a greater than 60% chance of hitting my target before my 50 point stop gets hit. I can also move my stop to protect a profit and decide to increase my target price. I don't have to trade if I can't get a good entry price. Not easy to program but seems to work in practice.
 

bonsai

Veteren member
4,106 10
wayno

its saturday, relax
reference to insider trading was a joke !

instinct, intuition and flexibility eh ?

great stuff but then you go on to talk
about 'momentum' ; 'sentiment' ;'underperformers' ;
and 'travelled too far'

odd that !. All those terms appear in my T/A books.
you know the sort of thing 'overbought;'oversold' etc

perhaps you're just a closet technical analyst ?

or in denial ?

lol
 
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