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There are people killing the lottery too.
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horrible analogy for the guys killing the markets i mentioned. simons isn't some lottery winner. neither is shaw. there are TONS of TAs though that of course this analogy could very aptly apply to ... but simons and shaw aren't two of them.
Barron
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Do you have any links to verified track records and description of methods used?
Something like this one used in support of value investing:
http://www1.gsb.columbia.edu/valuein...ves/DOC032.PDF
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Look at footnote 17 in the wiki on technical analysis.
Cliff notes: 56 studies show economic profits from TA, 20 studies mixed, 19 studies show negative economic profits from TA. More recent studies are more favorable toward TA than older studies.
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I went to Wiki and found this:
[edit] Lack of evidence
Critics of technical analysis include well known fundamental analysts. For example, Peter Lynch once commented, "Charts are great for predicting the past." Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."[1]
Some academic studies say technical analysis has little predictive power, but other studies say it may produce excess returns. For example, measurable forms of technical analysis, such as non-linear prediction using neural networks, have been shown to occasionally produce statistically significant prediction results.[18] A Federal Reserve working paper[7] regarding support and resistance levels in short-term foreign exchange rates "offers strong evidence that the levels help to predict intraday trend interruptions," although the "predictive power" of those levels was "found to vary across the exchange rates and firms examined."
Cheol-Ho Park and Scott H. Irwin reviewed 95 modern studies on the profitability of technical analysis and said 56 of them find positive results, 20 obtain negative results, and 19 indicate mixed results: "Despite the positive evidence...most empirical studies are subject to various problems in their testing procedures, e.g., data snooping, ex post selection of trading rules or search technologies, and difficulties in estimation of risk and transaction costs. Future research must address these deficiencies in testing in order to provide conclusive evidence on the profitability of technical trading strategies."[19]
However, a comprehensive study of the question by Amsterdam economist Gerwin Griffioen concludes that: "for the U.S., Japanese and most Western European stock market indices the recursive out-of-sample forecasting procedure does not show to be profitable, after implementing little transaction costs. Moreover, for sufficiently high transaction costs it is found, by estimating CAPMs,
that technical trading shows no statistically significant risk-corrected out-of-sample forecasting power for almost all of the stock market indices."[5]