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Is there any evidence that technical analysis works? i.e, can

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Is there any evidence that technical analysis works? i.e, can buys/sells based on technical analysis have a higher expected value than just randomly buying/selling
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>>1748763
It only works because people think it does.
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>>1748797
Again - any evidence?
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>>1748763
People have absolutely, 100% made fortunes off of technical analysis. Don't let too much faggotry run you down in here. It DOES work. It also sometimes DOESN'T work, just like with every other method. The important part is that you work hard to figure out what works best, and most importantly, what works best for you.

Here's two pages from a technical analysis book by Schwager that I think will put your mind a little more at ease
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>>1748820
I don't know how to get 4chan to stop turning my photos
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>>1748820
>>1748823
It's okay I have that book I don't need the screenshot. Thanks though.

I'm more looking for evidence though - not reassurance.
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>>1748763
Nope. The markets are too efficient. Any "trading" done is just glorified gambling.
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>>1748763
It does and doesn't. News moves stocks, quarterly earnings and hype move stock. Technical analysis works sometimes but only without much news. I believe in bands, floors and ceilings though. News and hype will only drop or moon mission a stock so far before investors suspect a bubble and cash out or the price is so low they feel like its a bargain.

Its more useful for currency trading but even that is subject to news.
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>>1748927
Key word in my OP is "evidence"
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>>1748932
I guess all the money trading algos on Wall st that use technical analysis is evidence that it works.

But yeah it is basically self fulfilling prophecy when it works reliably so its more theory than something based on emperical evidence.
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dice don't have memory.
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Academic research says no
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>>1748820
>>1748823
>a book exists, therefore the method must work
This is how poorfags think.

Hey genius, ever stop to think that the only person actually making money is one who duped you into paying for his shitty book?
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Of course technical works. Its all about human psychology. If enough people draw the same line/ look at the same indicator; the people will buy/sell. Its like pushing on a tree. If one person pushes a big tree it won't go anywhere, however if you get enough people to pull on the tree it will fall. Technical however has its own trends; for example one indicator may be the best one year and the worst indicator the next.
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>>1748763
If it can be written technically, millions of bots are already doing it and killed the margins you have.
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>>1748820
>It DOES work. It also sometimes DOESN'T work

if you're only able to claim retrospectively that it definately worked that one time but that other time it just wasn't working for you etc... then perhaps it wasn't working at all and you just happened to have some success in the times you're claiming it 'worked'
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>>1748988
>I guess all the money trading algos on Wall st that use technical analysis is evidence that it works.

in a very broad sense.... but that applies to technic`al analysis as in these algos use historical prices from which to make a decision - not so much that they will use the popular indicators retail traders follow and/or buy when some magic line crosses another

systematic CTAs, HFT firms etc.. are a bit more rigorous in their technical strategies - what the average retail trader thinks of as TA and what those firms do are worlds apart
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>>1748861
This. A good investor is one who can develop a formula that will work more than 50% of the time, if you can do that, you will have gains.
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>>1749472
>>1748861

But even if theorically you're 100% right with your prediction and whatnot, some shit can happen and you still miss.

Which is why this entire thing is just gambling. The only "Non-Gambling" form of investing would be to buy Real Estate and generate profit by renting. It's stable (Obviously fluctuates a bit with the economy, but that's about it), it provides a decent income, and it's involves little-to-no luck
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>>1749472
>>1749476
>someone doesn't know the difference between trading and investing
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>>1749476
It's not gambling. Gambling is putting money on a random outcome in a game of chance, also the house has the advantage.

The prices of stocks are not random and are effected by reality anyone that watches the news can observe.

Stocks tend to go up, over time. If it's gambling it's like you have the house edge, at 6% and if you do lose money it just replaces your taxes u to $3000.

So.... it's not like gambling at all. You think rich people avoid investing in stocks?
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>>1749534
Investing with good risk management isn't really gambling but trading or betting all on one or a few stocks isn't really investing and the risks involved might as well be gambling.

Rich people have people managing their funds with minimal risk.
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>>1749556
We can't all be rich people putting their wealthh in the hands of other people. IRL rich people are too busy either making more money from their businesses or they're idle rich too busy snorting cocaine and hitting the slopes in Vail to worry about how their money is making money for them.

Diversify, but ETFs and indexes are kinda pointless if you are under 40 and have income. Risk some money, pick some stocks. It's not even hard. Pick good companies under bad press. Undervalued firms.. I made thousands summoned out of the aether just buying stock in profitable companies nobody wanted and waiting a few months. In 6 years of picking stocks I sold only two stocks at a loss, and both were taken out of taxes, so show me a slots machine or pker table that will replicate that for the same amount of risk.
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>>1749583
It doesn't matter if you never sell at a loss, do you beat the indexes every year while maintaining low enough risk? If you don't know how to calculate risk, then you shouldn't even call it investing.
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>>1749621
I call it trading stocks and I beat the indexes, most of the time.

When they say you can't beat the indexes, they mean you can't beat it EVERY year, for multiple years. The average asshole can beat the market 50% of the time in a given year.

No, I had a bad year and another year where I broke even (only lost $447) but averaged out I beat the market. Time will tell, and it's true I will sit on investments that trade flat for months on end.

I do okay, being an indexer isn't losing out on much, but I'm better than that.
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https://en.m.wikipedia.org/wiki/Self-fulfilling_prophecy

>A bunch of gamblers following the same made up rules
>Prices go up because market is strong
>Made up rules say it's time to sell because made up reasons
>Gamblers start selling everything
>Prices obviously go down
>See guys? It worked! It went down the exact moment this book said it would
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What do you mean when you say technical analysis? It can be geometrical, mathematical, behavioral and so on. And my opinion is that it is a bad practice to mix the methods. Choose one school that you're like, find an author that actually made money from trading and stick to it. Ignore everything else. You can never be sure that you'll succeed ofc. Money won't be easy and you'll have to spend equal or more time learning comparing with casual professions.
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>>1748763
Come on faggots... There is NO evidence it works, you can make money by "daytrading" methods in the short run just because you are lucky. It doesn't has to do with the graphs... There is no fucking empirical evidence and it isn't fucking LOGIC. Is just a way to cheat the people who doesn't know a shit about the stock market; always the same process: A "gurĂº" comes and says investing is easier than you think, he sells you his book (and he makes money), he shows you the same fucking techniques which are based on the same stupid statistical methods which doesn't work just because WHAT HAS HAPPENED IN THE FUCKING PAST DOESN'T TELL YOU WHAT IS GOING TO HAPPEN IN THE FUTURE. If a stock grows a 1% it can either increase or the decrease YOU CAN'T GUESS IT WITH THE FUCKING BOLLINGER BANDS.
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>>1749534
>It's not gambling. Gambling is putting money on a random outcome in a game of chance, also the house has the advantage.
> The prices of stocks are not random and are effected by reality anyone that watches the news can observe.
>Stocks tend to go up, over time. If it's gambling it's like you have the house edge, at 6% and if you do lose money it just replaces your taxes u to $3000.
There's a small kernel of truth in what you say, but you're mostly wrong. Traders enjoy only a tiny portion of the inherent positive bias in the markets, but miss out on most of it as compared to investors. Why? Three main reasons:

One, time in market.In order to enjoy the positive market bias you have to be in the market, preferably for as long as possible. Traders, by contrast, are constantly moving their money into and out of the market. Much of their capital is OUT of the market, on average, at any given moment. Therefore they're giving away the positive bias.

Second, trading costs. The execution and carry costs paid by traders are a huge drag on performance. By comparison, investors don't suffer these costs, boosting their relative performance.

Third, taxes. Trading is an extremely tax inefficient strategy. The tax rates paid by traders (the ones who do earn any profit) is likely to be 50-100% higher than the tax rates paid by investors.

Also, always remember that the goal isn't just to "make money" its to do better than other alternatives available to you. A trader who realizes a small profit (thanks to the positive market bias, or luck) but fails to beat the market (this is 90-95% of all traders) has made a suboptimal choice because any easier, safer, and better performing alternative was available (indexing).

Use real facts. 90-95% of traders don't lose money -- 90-95% of traders fail to beat an index fund. That's not AS bad, but still very, very bad.
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>>1749640
>The average asshole can beat the market 50% of the time in a given year.
Actually, the average asshole fails to beat the market by a significant percentage, not because of randomness, but because of the fees they pay, the suboptimal assets they select, and the timing mistakes they make.

Dalbar has been studying individual investor behavior for decades. I suggest you look it up and educate yourself, because it's not a 50-50% proposition for the average investor. Even if you're trying to invest (not trade) you're still at a meaningful statistical disadvantage compared to an index.

>I'm better than that
Evidence says you're not better than an index. You're just too new or too dumb to know it yet.

t. Dunning-Kruger
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>>1750108
You are fucking god. Perfect analysis
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When I first got into trading I read a bunch of technical analysis books about patterns and shit. More recently I got backtesting software and found that most of the traditional technical patterns meant absolutely nothing. One thing that is pretty accurate is that price rising above resistance usually causes a quick breakout and price falling below support usually causes a quick selloff
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There is no evidence that TA actually works

You can take 100 stocks and apply TA and FA to them and you'll see a huge swing in where it was dead on and missed.

There is some prediction, but you are still crossing your fingers.

People have gotten rich playing slots and roulette. That isn't proof of performance though.

You are gambling
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>>1748763

thats is like asking a gold miner if a pickaxe can show you the way to gold
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TA has no prediction capability. If something continues to make new highs or lows, people say "it works." But if the data retraces the other way, it doesn't work. Its no better than using other technical strategies. Channels should not be used to short highs and buy lows. You can probably come up with a better strategy than these books on the shelf. I don't trust them at all.
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>>1748861
Markets are efficient.

Lol no, traders profit off of Wall Street's inherent bias. The problem with such a thing is that it takes a special type of person to be detached from the madness, and even if you are right, you might get your profits plowed down by the circlejerk. You may lose 300Million before you are correct and make a 1Billion dollar profit. Not everyone has the stomach for this.
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>>1750108
What about speculation? In 2008 after one of the biggest crashes in history I couldn't tell you whether apple, google, microsoft or yahoo were going to do well, but I can safely say without captain hindsight or survivor bias that I wouldn't touch blockbuster or radioshack with a 50 foot pole. Buy and hold is a risky strategy tbqh.

The world is full of gamblers who put all their money into cuckcoins and shit but the same rules that would apply to them don't apply to smart people, like me.
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>>1750429
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>all the idiots in this thread bashing TA

never gonna make it
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>>1750429
If you were actually smart, you'd recognize the two classic logic blunders in your post.

First, you're assuming you would have spotted the market bottom after the 2008 crash. In reality, you probably would have sat on the sidelines as the market rebounded, shouting "dead cat bounce" to anyone dumb enough to listen.

Second, you're applying confirmation bias on two stocks that we know have struggled in recent years. In reality, you're no more likely to predict underperformers than you are spotting outperformers. If you had this ability, you'd be the most successful, wealthy, sought-after trader on Wall Street.

Do you think you're impressing anyone by looking backwards 8 years and boldly telling us the perfect strategy that you undoubtedly would have executed back then? Seriously, your ignorance is only surpassed by your delusion.
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>>1748763
Just buy and hold bitcoin, no need to trade.
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No it doesn't work. Drawing a line on a chart doesn't mean shit. Either buy and hold for the long term or learn how to actually trade.
>form a hypothesis
>test your hypothesis by starting to build out your position
>watch price action to confirm or deny your hypothesis
>if wrong get out
>if right, keep scaling and build your position out
>when your hypothesis is confirmed you have to fucking press and let your winners run, this is the ONLY way to realize exponential profits
>it all boils down to:
Risk management
Patience
Position management

Most will do best to buy and hold an index
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>>1749556
>>1749534
The only way to get rich is by playing in the high stakes.

Want to get rich? Buy your entire networth worth of bitcoin.

Or go full Soros and short for billions of dollars.

Even Soros fucks up some times.

But bottomline is: Study something that you find has chances to give you a good outcome, then take a big fat bet... yes, you are going to need luck.

There is no other way to get rich, you need big fat bets, at the end of the day it is what it is.

Everyone that got rich ever took big bets, or got lucky with a product becoming a viral meme.
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>>1750467
>Most will do best to buy and hold an index
This will guarantee you never get rich.
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>>1750474
Or you study your ass off and get a good paying job and invest long term and in a couple generations, your family will be much better off than you started which is how most people who are wealthy got there. But that's too much work and you want things easy. Go ahead and dump all your cash into shitty bets, I'm sure nobody in history has done that and gotten fucked.
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>>1750487
>>1750487
That's a pretty bold blanket statement. I assure you far more public wealth has been created in the long holding of securities than in the trading of them. The vast majority are not suited to trade. If you get emotional about losses don't even consider it.
>source: I blew up 3 accounts and spent countless hours of my time to learn how to be profitable at trading.

All I'm saying is that the vast majority won't be profitable. It's imperative that one is honest with themself and knows this before entering the markets.
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>>1749008
>Academic research

kek
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>>1750258
Searching for patterns and trade by drawing lines is like believing in magic. Though the line is useful when you're using it as a tool to emphasize price dynamic. Sometimes it's hard to catch it by naked eyes.
Considering the mathematics and algorithms - it is proven theorem that not every task can be automated. Maybe the trading is one of them?
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>>1750440
>tfw
>>1750459
I know all about human nature, gambling addictions, survivor bias, confirmation bias, etcetera... However equally irrational is the idea that buy and hold is without risk. You have to speculate. It is not like I want to make predictions and be proven wrong over and over, but if I can't I might as well put a gun to my temple and pull the trigger tbqh.

I am pretty sure I could have told you to avoid shitty companies like blockbuster and radioshack, I predicted that oil would go up again after it dropped in 2015.

Tomorrow lululemon won't jump up 5000%, there, how about that. I just made a successful prediction.

>Do you think you're impressing anyone
wow, did you think I was unironically bragging about being smart, I was only doing it since you claim to be a genius and I thought you were joking

Since you are so smart, how do you make predictions?

Also this guy is wrong>>1749472 you don't even have to be right 50% of the time, only if you are playing double or nothing. On the stock market it is more like you lose 5% or gain 20%, in this situation you only need to be right 20% of the time.
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>>1750467
>>form a hypothesis
I hypothesize that the marcet occasionally gets stuck in closed feedback loops

I hypothesize that it is possible to identify said feedback loops

>>watch price action to confirm or deny your hypothesis
bitcoin, every couple weeks.

virtually every stock at a critical press release

virtually every smaller stock every couple days due to automated trading.


>candlesticks and donchian and MAs

you can stick your candlesticks up donchian's MA, I agree.

I disagree that a comprehensive TA cannot work. I do believe that a persistent FA (fundamental surveillance) can predict TA events.

problem is, YOU cannot afford comprehensive TA. YOU cannot understand TA. YOU cannot use TA. therefore you hold the opinion that TA is shit.
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>>1750545
Ok define technical analysis as you see it for the sake of this argument.
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>>1748763
does it work like the logic gates in a calculator? no.

does it work to make people money in the long run? yes.

i think the most absurd part of the current trend where retards argue between luck (muh genetics, muh coin-flip) and mind over matter (muh hustle, muh positivity), is that none of these people study what they actually want to do.

what's the point of the OP question? if you are wondering if it's a waste of time, go to the people that use that method or do it yourself and make an educated guess. everybody wants some simple, emotional answer for shit that clearly only a handful of people have found real success in. there is no more scientific method in saying "it's dumb luck because nobody can satisfy my criteria for evidence" than there is to say that somebody wanted to succeed more and did. money doesn't land on the earth in random locations, trading is based on human behavior which people can study from a million different approaches.
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>>1750534
>the idea that buy and hold is without risk
Nobody ever said buy and hold is without risk. Without risk, you wouldn't have reward (i.e., gains).

Please stop strawmanning.

>Tomorrow lululemon won't jump up 5000%, there, how about that. I just made a successful prediction.
Great, now make it pay. There is an option contract on this that you could buy if you were willing to put your money where your mouth is.

But you'll quickly discover that your predictions are so generic and so bad that you can't turn them into economic gain. Which is what people have been saying in this thread from the beginning.

>Since you are so smart, how do you make predictions?
I don't. I put my money on the inherent long-term positive bias in the market, which is driven by GDP, population growth, technology, efficiency, and various societal and economic advancements that, while not entirely without risk, have historically returned stable and reliable gains.

>you don't even have to be right 50% of the time
So in addition to all your other bullshit, now we're to believe that you can optimally place your risk allocation only to the winning bets?

Dumb and deluded is a bad combination, anon.
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>>1750560

I think a common definition is:

>Technical analysis is a method of evaluating securities by analyzing the statistics generated by market activity

things I consider relevant:
hidden markov models
bayesian networks
regularized regression
support vector machines
harmonic analysis..

and whatever else you feel relevant and works for you.

but OFC, as stated before, nothing beats a hybrid approach.
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>>1750598
I can get behind statistics, and an approach based on market data. I think the definition gets murky of TA. I don't put a statistical approach in the same boat as trend lines and triangles.
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>>1750639

visualized approaches of statistical analysis put lines and triangles on the chart.

personally I like to use a gaussian heatmap just to visually check the stability of a stock.
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>>1750567
>lulu won't go up 5000
>there is an option contract for this

WTF???
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>>1748763
Tech analysis is cover for manipulation.

Like running plays in football but using HFT bots instead.

BTW Football is an entertainers sport for what its worth.
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>>1750723
Anon could sell a call @ $5000. It's a bet that the price won't rise above $5000, consistent with his prediction.

Of course, since its a stupid prediction, he'd never get anyone to buy the contract. Which is my point. Which apparently went over your head too,
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i wan to me hear more big guys talk big stuff comeon guys
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