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Any Day Traders on TA? (pg. 11)
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| DigiNut |
| quote: | Originally posted by SSSanchez
There is no proven statistical market data that has yielded an advantage (assuming efficient markets)...done through autocorrelation and 'runs' tests. The reality is that markets are not perfectly efficient nor completely inefficient. The fact that you have gained is more likely than not purely chance (getting lucky). |
Haha, I hope this isn't a brewing religious debate about fundamental vs. technical analysis.
I've always understood technical indicators as a means for finding good entry and exit points for stocks you believe are good (or bad, if you're shorting) for fundamental reasons. Once you've picked out something you want to buy, you're faced with the secondary question, do I buy it now or do I wait for a dip, and how much of a dip?
I missed out on a few good opportunities last week because I considered a few stocks to be overvalued - and long-term, I still believe they are - but they were nevertheless trending upward and meeting very little resistance on the way.
Playing the peaks and valleys of a "good" stock can get you a much higher return than holding on long-term... if you time it right. And I'm not claiming that I've been able to do this, just that people who are a lot more experienced can use technicals to do it successfully at least part of the time. |
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| SSSanchez |
| quote: | Originally posted by DigiNut
Haha, I hope this isn't a brewing religious debate about fundamental vs. technical analysis.
I've always understood technical indicators as a means for finding good entry and exit points for stocks you believe are good (or bad, if you're shorting) for fundamental reasons. Once you've picked out something you want to buy, you're faced with the secondary question, do I buy it now or do I wait for a dip, and how much of a dip?
I missed out on a few good opportunities last week because I considered a few stocks to be overvalued - and long-term, I still believe they are - but they were nevertheless trending upward and meeting very little resistance on the way.
Playing the peaks and valleys of a "good" stock can get you a much higher return than holding on long-term... if you time it right. And I'm not claiming that I've been able to do this, just that people who are a lot more experienced can use technicals to do it successfully at least part of the time. |
You can not effectively time the market-the professionals admit to this and more likely than not, you can't do it either. I restate this: NO technical analysis method/combination of 'technical analysis' method have proven ever to be more effective than the market(the analysis conducted eons ago)...and markets are far more efficient today than they were 20 years ago. Market adjusts very quickly to new information and arbitrage is hard to find if you're an outsider. Professional money managers have a difficult time earning alpha (excess returns relative to the market after adjustment for fees/commissions)...Fama & French paper. You can not ascertain that your method of timing and 'playing peaks & valleys' will yield you better returns. You just can't. Where you can earn abnormal returns (in excess of the market) is if you have superior estimation abilities and even then do you risk having many shortfalls...and you're not a hedge fund that has hordes of bodies and sophisticated models to look at arbitrage opportunities, includes the opportunities outside equity markets...though so many performed poorly the last 2 years...unless you're John Paulson or Steve Cohen. |
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| DigiNut |
I thought I indicated pretty clearly that I wasn't talking about "my" method and don't even have a method other than watching the chart and making educated guesses.
You are criticizing systems based entirely on technical analysis for stock selection and price targets. I'm not arguing with that. I am referring to the use of technical indicators as part of a larger context which includes factors such as the company's history and management, competition, the state of the economy, recent news, expected news, and so on.
This is no different from almost any other job or hobby. Almost everything we do that you could call skilled relies on some combination of theory, experience, and intuition. There are fundamental aspects, there are technical aspects, there are human aspects, and there is always a certain amount of pure dumb luck.
Can you point to a research paper that samples a large number of investors and shows that at least half of the most successful ones do not look at technical indicators at all? Because that's very different from saying that algorithmic solutions don't work (we already knew that). Most professionals in any industry rely on their experience and instincts but also have rules of thumb that they follow most of the time. |
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| bossi |
| who thinks we hit a bottom? |
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| rabbitjoker |
| quote: | Originally posted by bossi
who thinks we hit a bottom? |
Once the stimulus money runs dry I think we're going back down at least 25%-30% from where we are today. |
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| spolitta |
| quote: | Originally posted by rabbitjoker
Once the stimulus money runs dry I think we're going back down at least 25%-30% from where we are today. |
I don't think the U.S stimulus has much to do with the rise of the stock markets from the March lows but if that was the case then Barack will just release his second Stimulus package then the third and they'll do it enough until the dollar is worthless. Does anyone really believe Nancy Pepsi is not working on Stimulus 2.0 already? |
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| Skipper |
| quote: | Originally posted by rabbitjoker
Once the stimulus money runs dry I think we're going back down at least 25%-30% from where we are today. |
Stimulus money hasn't really started flowing. We're hearing from companies that it's actually made things temporarily worse, as projects are being put off until people find out if the project is eligible for funding.
I don't believe this is anything more than a bear market rally and we're in for a lot more volatility in the days ahead...ie yesterday down 300pts, today up 200..reminds me of the fall of 2008 again! |
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| bossi |
| quote: | Originally posted by Skipper
Stimulus money hasn't really started flowing. We're hearing from companies that it's actually made things temporarily worse, as projects are being put off until people find out if the project is eligible for funding.
I don't believe this is anything more than a bear market rally and we're in for a lot more volatility in the days ahead...ie yesterday down 300pts, today up 200..reminds me of the fall of 2008 again! |
I agree, i think we're going much lower. I think we might test lower bottoms than the 7000's in March. The market has been rising for 10 weeks straight while theres nothing but bad economic news, more bankruptsies, more job loss and housing sector down.. |
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| bossi |
| after following your posts you seem to know a thing or two. Is this your bread and butter? |
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| spolitta |
| quote: | Originally posted by bossi
I agree, i think we're going much lower. I think we might test lower bottoms than the 7000's in March. The market has been rising for 10 weeks straight while theres nothing but bad economic news, more bankruptsies, more job loss and housing sector down.. |
From what I understand the market is now pricing in a strong recovery by the end year and when that time comes and the recovery isn't there the market will sell off. Who knows what will happen until then? For the time being do not underestimate the massive money printing done by most central banks to fight the so called deflation. Look at the crude oil, inventories are in multiyear high, demand is not there and yet people are talking about oil at $75 a barrel. |
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| Skipper |
| quote: | Originally posted by bossi
after following your posts you seem to know a thing or two. Is this your bread and butter? |
thanks, and yes it is |
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| Skipper |
| quote: | Originally posted by bossi
I agree, i think we're going much lower. I think we might test lower bottoms than the 7000's in March. The market has been rising for 10 weeks straight while theres nothing but bad economic news, more bankruptsies, more job loss and housing sector down.. |
The market is typically a leading indicator though - so that shouldn't come as a surprise. It will price in a recovery before the stats show it. This is why the market crashed in October, a full 2 months before Canada technically entered a recession. |
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