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Bollinger Bands. How BASED?
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You are currently reading a thread in /biz/ - Business & Finance

Thread replies: 97
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Are Bollinger bands legit or is it another TA woohoo nonsense?
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>>1041375
They are legit if enough traders believe in them. Really it's all just alchemy.
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>>1041375
do you know what you're looking for when using BBs? cause i find most people don't.

im looking at how on the bottom band near the minus sign and just before that, price visited this level later on. im also looking at the top bands touching 30. wouldn't be surprised to see 24 then 30.

though, i usually use a larger standard deviation
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>>1041387
Are you referring to "breaking the bands"

I used to read up on Bollingers but can't remember too much.
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>>1041387
what SD do you use 3?
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>>1041396
no, not breaking the bands.

do you see the minus sign near the middle bottom of the pic? and then bottom band thats right above it? take a piece of paper and, being parallel with the rows, see how close the last close is to where the band made its most recent bottom.
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>>1041398
yeah
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>>1041401
cool thanks. do you think the market will continue to decline
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>>1041375

Technical analysis is fucking mumbo jumbo garbage.

Can someone /thread me on this?
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>>1041438
/biz
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>>1041375
bumping

anyone have success with BBs?
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>>1041438

i made 50k trading based only on technical analysis

you're clueless
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>>1041438

Technical analysis works in the short term to a certain extent, but only because enough people accept its "rules" that they buy when TA says buy and sell when TA says sell.

Long term, it's a bunch of BS. The market always reverts to fundamentals.
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>>1042363

you're retarded, and never use TA for anything

never fucking reply to me again unless you're contributing to my thread
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>>1042359
Fucking lmao

Nice anecdote

I wish /biz/ wasn't so retarded.
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Anyone with experience in trading/investing on the market is invited to join the /biz/ group
Download kik, create a user name and post it here
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>>1041375
>TA woohoo nonsense?
Shut your filthy whore mouth!
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>>1042363
>Long term, it's a bunch of BS.
What is wrong with you?
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>>1041375
I use bollinger bands while trading forex. Live. On a daily basis.

I use them to keep in mind what the higher timeframe is doing while I'm down in the 1 hour space.

Eg. In the one hour space I see an uptrend, with a small turn down. Buying oppertunity right?

Well with the 200 or higher bollinger band on I can see that that center line or the upper band is being approached. At 200 period we're effectively looking at 8 days worth of data. Without having to zoom out.

Quality of life thing mostly. I'd never actually trade off of it though.
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>>1042359
TA is like bullets, but the gun and the guy shooting it is FA.

If you're just doing FA, then sure you can kill someone. With great effort and much punching and possibly harm to yourself you can kill someone.

But with TA+FA, it becomes a lot easier to kill (get in and out at a profit) without hurting yourself.

With just TA... It's a bit weird. Sometimes you nail trades. Sometimes they go wrong and you don't know why so you start looking thinking:

"Hmmmm maybe this little trend line here should actually point HERE, and this little heads and shoulders is actually a really bent out of shape teacup".. Yeah That's how it should've been if i'd drawn that I woulda been profitable.

When really you're trying to long CAD in an oil turndown.
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>>1041375
they just measure standard deviation....

the use of them is naive at best - firstly if you're going to assume a normal distribution and start applying the central limit theorem you'd want your data to be independent... financial time series data doesn't have this quality, each entry is related somewhat to the previous and serially correlated. The assumption of normality is flase too - financial data is known to have fat tails. Lastly the sample size used is often too small to have any meaning.

Basically they're just fancy lines on a chart and like most 'technical analysis' just used by simple inumerate people who wan't an easy framework to help them make trading decisions because they don't know enough about statistics to do any proper forecasting themselves.
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>>1041438
yup, pretty much

'statistics made easy' for complete retards...

widely promoted by brokers as it is simple and easy to pick up and gives people a reason to place lots of short term trades


'oh look one magic line has crossed another lets place another trade'
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>>1041438
>>1043155
found the incompetent morons who failed miserably when trying to use TA and instead of accepting how stupid they are they project their failures onto everybody else. stay poor while a winner like me scalps his way to loads of money in a matter of minutes you faggot turds LMFAO.
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>>1043200
its like calling people morons for failing to use homeopathy or magic healing crystals... the methodology itself is flawed and if you can't grasp why then perhaps you're the moron
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>>1043204
>its like calling people morons for failing to use homeopathy or magic healing crystals... the methodology itself is flawed and if you can't grasp why then perhaps you're the moron
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>>1041375
>2016
>not using superior jewish duck TA
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>>1043208
you don't have a clue...
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http://www.followingthetrend.com/2014/05/why-technical-analysis-is-shunned-by-professionals/

>The seeming simplicity of just using a chart with some indicators or lines attracts many beginners. It would seem like such a great shortcut. You don’t really need to do real work, just look at a chart. Throw in a few indicators named after some authors and you’re done. It’s a seductive idea, that you don’t really need to work hard. This is why the field is attractive to retail traders and that in turn is why it’s an attractive field for those peddling products based on colorful names and back stories.
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>>1041375
It's woohoo nonsense
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>>1043220
Hmm... You don't happen to post on hotcopper do you? [spoiler]:^)[/spoiler]
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>>1042381

>you're retarded, and never use TA for anything

You're half right. I never use TA. You know why?

IT DOESN'T FUCKING WORK

Glad you made some money using it during one of the longest bull markets in history, though.
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>>1043260
Except that technical analysis is not devoid of work. Hell, indicators are not really part of classical technical analysis.
Professionals often disregard most of technical analysis because they have clients. Brokers need to buy or sell already certain amounts and they need to do so in a way that minimizes market impact (this is the main reason trends are generated). Also, those who profit from speculation often work in the short term because the longer the timeframe, the more factors are in play, such as macroeconomics, laws, regulations, politics, war, earnings seasons, etc. Short term speculation can be done with several tools, TA is one of them. TA IS statistics. A bar that is bigger than the last 80% of the bars doesn't arise by mere chance. Actually it does, but it's extremely uncommon. It's often generated by institutional pressure, either selling or buying pressure, and it will usually last for a while, since institutional players often have enormous orders to execute. Also, there's the expectation of all other traders (retail OR institutional) to be able to buy/sell after the surge at better prices. Why would I buy NOW something that has been falling with significant pressure? Unless there's a significant signal of a direction shift, I'll wait and buy lower. This is CROWD PSYCHOLOGY. TA is nothing but analysis of the markets' fears and expectations.

Now, indicators... Price action analysis is, by definition, devoid of indicators. Indicators are based on price. If you can read the price action correctly and infer which direction is more likely at any given moment, you don't need indicators. BB are supposed to capture something which is not easily seen: volatility. It's not an easy task to analyze, in real time, where price can probably revert direction. But I'll not buy just because price hit the lower band! I'll wait for a confirmation signal, something that shows me that selling pressure is gone, at least for a while.
Volatility is statistics.
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Take this, for example. Disregard the colored lines, it's a volatility indicator which serves other purpose (StopATR).

I don't buy a hammer (or bull reversal bar) just because it's a hammer. It's not a kids game, for fuck's sake. I made this trade because it showed buying pressure at an level universally recognized as an interest zone: the previous day close.
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>>1043303
Also, you can see how price reacted against the previous day close the next day.
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>>1043303
nice that you don't show us the 100 "hammers" near "previous day closes" before that did not work
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OP, you need to understand what volatility means and how an indicator of volatility is supposed to be used.
You need to study price action. Period. Some beginners are attracted to indicators because they seem easy and simple, but price action is not simple. Al Brooks wrote around 3000 pages on it, go read it, just skip the first book (Bar by Bar).
Indicators are to a trader like a good pair of shoes are to a runner. It serves a purpose, but it's not the main source of the runner's work and performance.

https://www.youtube.com/watch?v=GOCALtZyCsk
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>>1043319
funny how every sales pitch for TA starts out with saying that all previous TA is wrong but here is the TA that really works...
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>>1043258
nice projection peasant faggot

keep crying like the shitter you are, my piping hot boner loves this kind of lube
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>>1043315
Not worth my time. My account speaks for itself.
Then again, I don't need 100% of my trades to work to make a living of trading. No human being has an accuracy of 100% or near near 100%, not even macro analysts. You just need to profit enough from winner trades.
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>>1043334
not worth your time... but you keep writing long essays to sell these books.
show us your brokerage balance then... quick and simple.
if you do i promise to buy all three books !!!
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>>1043332
Actually, classic TA came first, then a bunch of mathematicians came and created indicators, but no one but themselves knew how to use them. These days, most indicators are not used how their creators intended and most beginners pay most attention to the indicators than to the price.

https://www.youtube.com/watch?v=Tkre9mCq9Ow
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>>1043342
I'm not Al Brooks, you fucking retard. And I teach people for free where I live.
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>>1043352
if you are that woman in the last video, i have to tell you that it turns me on when you call me names.
are you posting your balance, or not?
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>>1043288
>TA IS statistics

no it isn't... it is a very crude attempt at it

statistics, singla processing, time series analysis etc.. already exists and is more rigorous

TA is full of absolute bollocks like elliot waves, magic fibonnaci numbers, bollinger bands etc...
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>>1043373
*Fibonacci
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>>1043373
i think i had some bollinger on new years eve
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>>1043373
https://en.wikipedia.org/wiki/Time_series

>multiple dependent time series at different points in time
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>>1043377
I know what a time series is thanks...
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>>1043373
You see, I trade with TA but I don't use Elliot Waves or Fibonacci... You, like most people and even some institutional traders, have a wrong idea of what TA is.
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>>1043378

>>1043150

don't think you actually do.
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>>1043380
you could convince us if you show us your balance and trading records
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>>1043380
well the thread is about bollinger bands...

which are pretty crap as already pointed out

if you want to define TA as anything using historical price data then sure - some of it has uses... most of what is labeled as TA though and talked about in books specifically about 'TA' is absolute garbage
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>>1043387
It's not crap, it measures volatility, it's not supposed to give buy or sell signals. If you're expecting that, I'm sorry, but trading isn't easy.
Also, indicators SHOULD BE CUSTOMIZED.
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>>1043410
I'm not expecting bollinger bands to give buy or sell signals, I was just explaining why they were crap

if you don't understand then no problem

most people reliant on TA don't seem to be able to grasp basic statistics
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>>1043410
no, it does not measure volatility.
it measures standard deviation of the observed moving average of the a specified time window.

which is something very specific and has not really any relation to volatility.
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>>1043420
Deviation from the mean is a way of measuring volatilirt.
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>>1043410
>>1043420

pretty much figure out the likelihood that price will deviate from X MA. 1 sd will have a greater chance than 2 sd, so you can start using your risk management there.

>>1041401
pic related
bottom band's bottom yesterday getting hit today
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>>1043426
you don't really understand what you're talking about

try stepping away from the TA and retail trader garbage, read some actual finance books, learn a bit about statistics...
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>>1043430
>so you can start using your risk management there.

if you're a complete retard who knows nothing about risk management
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>>1043439
let me show you your posts that have are saying "no" and using insults in the mix without providing anything else. you have no idea what you're talking about.

>>1043155
>>1043204
>>1043258
>>1043373
>>1043378
>>1043387
>>1043417
>>1043436
>>1043439
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could one... just one TA defender please post his trading record. just one!
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>>1043444
provide an argument for them then... all you've done is post little snippets like a link to a wikipedia article on time series... or just pointless statements like:

>>1043430
>1 sd will have a greater chance than 2 sd, so you can start using your risk management there.
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>>1043459
i pointed out your contradiction and you haven't responded to it yet, so im waiting on you.

though, if you're going to tell someone they are wrong, you have to show why they are wrong. you haven't shown a damned thing other than that you're a troll.

though, to think that achieving 1 sd, isn't easier than achieving 2, i'd like to see your math. you'll have a 33% chance to hit either 1sd up or down, and like an 18% chance to hit a 2sd.
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>>1043464
where have you pointed out a contradiction? Could you point it out again please perhaps using sentences and some form of argument?

>though, to think that achieving 1 sd, isn't easier than achieving 2, i'd like to see your math. you'll have a 33% chance to hit either 1sd up or down, and like an 18% chance to hit a 2sd.

I've not said that...

what are you basing your 33% and 18% figures on?
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trading record pls
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>>1043474
you said you needed independent data to do time series analysis, then showed you that you actually dependent data.

im basing my numbers off of a normal distribution. literally google "standard deviation" and you'll see.

what is your data? seriously? "no this" "no that" that's all you say. you're a fucking troll.

>>1043475
could one TA naysayer post a track record?
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>>1043475
That's private.
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>>1041375

bands as a filter are great. standard deviations allow differentiation between random prices (ob/os) and trending
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>>1043490
prices are never random
like price just doesn't randomly move
there's a reason why price is where it's at
and that's because two people came together
and made sweet, sweet financial decisions together
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Bollinger bands are just a fancy way to visualize the z score

Z score = (price - mean)/std

Z score is useful for mean reversion strategies. It's a legit strategy.
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>>1043491
I came.
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>>1043484
>you said you needed independent data to do time series analysis

no I didn't... you need to learn to read - I pointed out that the normal distribution is applied to independent data

>im basing my numbers off of a normal distribution. literally google "standard deviation" and you'll see.
>what is your data? seriously? "no this" "no that" that's all you say. you're a fucking troll.

you're a fucking retard as suspected previously... you're applying the normal distribution to financial time series data

even though you're claiming to be using the normal distribution you can't even get the percentages correct... 95% of the data is within 2 standard deviations of a normal distribution and it isn't even applicable here....
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>>1043484

see this post... and read it properly this time
>>1043150
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>>1043505
http://www.investopedia.com/terms/c/central_limit_theorem.asp

tho, i'd like to see some of your sources. it's easy to say "no".
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>>1043511
you're linking to the central limit theorem but you still don't understand it and need a source???

independent data is a fundamental assumption you complete spastic... this is pretty basic:

you can read more here if you like:

https://en.wikipedia.org/wiki/Central_limit_theorem
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>>1043518
>https://en.wikipedia.org/wiki/Central_limit_theorem
In probability theory, the central limit theorem (CLT) states that, given certain conditions, the arithmetic mean of a sufficiently large number of iterates of independent random variables, each with a well-defined expected value and well-defined variance, will be approximately normally distributed,

note the line:

'independent random variables'
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>>1043520
now answer me this:

why is it wrong to use the bollinger bands as a means of measuring sd? after all, financial institutions do use the central limit theory, using financial time series data, which is dependent data.
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>>1043525
>why is it wrong to use the bollinger bands as a means of measuring sd

it isn't wrong to use them as a means of measuring standard deviation - they objectively do measure standard deviation... that is what they're plotting

it is just that taking a small (often meaningless) sample of 20 and then calculating the standard deviation is of very little value

taking it further and falsely assuming a normal distribution and asserting specific % values to the likelihood of a price reaching some level is especially naive and rather dangerous

financial times series have fat tails, assuming a normal distribution is just stupid...

I've already pointed all of this out in my first post on this thread
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>>1043528
>that is what they're plotting
or rather 2* standard deviations
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>>1043484
>>1043487
i'm not a profitable trader.
but neither are you two.
and the only way to convince others that your system works is by posting a convincing track record
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>>1041375
/biz/ is fucking retarded

bollinger bands are based on statistics and give an indication of whether a stock is likely to be oversold or overbought. it's not voodoo magic, alchemy or luck. you're a pathetic pleb if you blame everything you don't understand as "luck" or whatever.
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>>1043531
Honey, I don't need to prove you anything.
Scammers show fake/demo account track records because they are trying to sell you something.
The system works, there are countless traders making money at SMB Capital and others using this system. What doesn't work is the trader.
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>>1043528
price is always likely to hit a 1sd before hitting a 2sd.


https://en.wikipedia.org/wiki/Fat-tailed_distribution

In finance, fat tails are considered undesirable because of the additional risk they imply. For example, an investment strategy may have an expected return, after one year, that is five times its standard deviation. Assuming a normal distribution, the likelihood of its failure (negative return) is less than one in a million; in practice, it may be higher. Normal distributions that emerge in finance generally do so because the factors influencing an asset's value or price are mathematically "well-behaved", and the central limit theorem provides for such a distribution. However, traumatic "real-world" events (such as an oil shock, a large corporate bankruptcy, or an abrupt change in a political situation) are usually not mathematically well-behaved.

>>1043531
the only way to prove that what track record i give is actually mine is to give you my log in details. i've already been through the rodeo.
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>>1043536
show a record. then i can check the trades you made and see if they are fake or not.
if they are not fake i promise i buy whatever SMB is selling
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>>1041438
This basically, if you are merely human you should go long term with fundamentals because there is no way you can compete with algorithmic traders and data analysis experts in the short term with weak ass technical analysis, it will be no better than a random walk for you. If you are interested in technical analysis I'd suggest learning AI in Computer Science and Economics/Statistics and working for a Hedge Fund or something.
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>>1043540
I'M NOT SELLING SMB, AL BROOKS OR ANYTHING, FOR FUCK'S SAKE.
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>>1043547
why then would you try to convince anyone that your money machine works?
so they can copy it and reduce your profits?
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>>1043546
>If you are interested in technical analysis I'd suggest learning AI in Computer Science and Economics/Statistics

and if you learn statistics you'll soon see why most TA is complete nonsense and start to see through the BS spouted by its proponents (as demonstrated in this thread)
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>>1043555
Why would you try to convince /biz/ that TA doesn't work?
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>>1041375
I prefer the Donchian channel. Bollinger bands move too much, balloon out weirdly and so on. The Donchian channel is more like an upper and lower limit (average), the way you'd expect BBs to behave.

Pic is just googled (name is misspelled even), pay no mind to the buy/sell signal stuff, I just use it to get a better idea of levels where price may do something (it's easier to identify with the channel there).
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>>1043562
actually i should be selling some TA bullshit.
it's a zero sum game after all.
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>>1043560
butthurt piker detected
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>>1043609
hardly...

though I guess for people like you it is a lost cause really...
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>>1043610
"no"
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>>1043568
it's not a zero sum game fucking retard
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>>1043610
>mfw this insecure little faggot is STILL whining.

he LITERALLY can not accept the fact that he's just a butthurt little moron who sucks ass at TA, lost money and now INSISTS that it's because TA is "garbage" and not because he's a dumbass.

you're done, moron. learn to cope with your undersized chimp brain kid.
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>>1043566
Where might I find this on basic websites? Like you know, in real time when the market is active.
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