Can technical analysis beat random systems(?) - this topic has been discussed thoroughly at the IFTA conference in October 2000.
[b]Conclusions[/b]:
1. [i]Technical analysis often produce better result than random signals[/i]
2. [i]Technical analysis has the advantage of consistent decision making[/i]
3. [i]The performance of every trading system depends on the random price behaviour. This make the usage of TA as a stand along method not advisable[/i]
4. [i]Further invistigation should focus on various yield distribution functions[/i]
technical analysis works...
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JamesH83
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technical analysis works...
Evitca Redart, what kind of technical analysis rules are you looking at?
Have you formally backtested them?
Have you formally backtested them?
¦(X)=(Nh)-1K{h-1(X-x1) + ... + h-1(X-xT)},
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tabris
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technical analysis works...
Somehow, I don't think he can backtest something that he "visually" maps out as a trading opportunity. He would need to systematically define his signals which doesn't seem possible based on his description listed on his trade idea of "forming a double top break out pattern".
However, I am not saying if TA works or not work as I have seen many CTA making good returns this year.
The following is just my opinion, but take an easy example of whatever TA they use, if 30% of the market volume trades on similar TA signals, they might be able to create their own supply and demand pressure. If you make money off others that bites the trend, all you need to do is to make sure you are one of the first to get in on the signal, and one of the first to get out to make a profit. To do so consistently however is another issue...
However, I am not saying if TA works or not work as I have seen many CTA making good returns this year.
The following is just my opinion, but take an easy example of whatever TA they use, if 30% of the market volume trades on similar TA signals, they might be able to create their own supply and demand pressure. If you make money off others that bites the trend, all you need to do is to make sure you are one of the first to get in on the signal, and one of the first to get out to make a profit. To do so consistently however is another issue...
Dilbert: Why does it seem as though I am the only honest guy on earth? Dogbert: Your type tends not to reproduce.
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doctorwes
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technical analysis works...
I found a nice survey paper. Frankly, I'm still not convinced.
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tristanreid
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technical analysis works...
Don't want to fork the thread, but...
My statistics professor brother-in-law says that Warren Buffett is an outlier. My bro-in-law is extremely smart, but came to this conclusion immediately after I told him about the EMH and asked what he thought, he didn't really spend much time on it . I'm curious what the rest of you think: Is fundamental analysis worth anything, assuming no inside knowledge?
Evitca Redart, if technical analysis works, wouldn't adding fundamental analysis of the company yield even better results? Or does technical analysis only work because it's dependent on short-term patterns and fundamental analysis requires long-term?
-t.
My statistics professor brother-in-law says that Warren Buffett is an outlier. My bro-in-law is extremely smart, but came to this conclusion immediately after I told him about the EMH and asked what he thought, he didn't really spend much time on it . I'm curious what the rest of you think: Is fundamental analysis worth anything, assuming no inside knowledge?
Evitca Redart, if technical analysis works, wouldn't adding fundamental analysis of the company yield even better results? Or does technical analysis only work because it's dependent on short-term patterns and fundamental analysis requires long-term?
-t.
If you can make computers as smart as humans you will have invented a machine that can sing the words to the Flintstones tune but will forget to pay the phone bill.