Technical Analysis

[DesertCat]

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Your and my idea of "far away" is different. They are basically the same thing. One is automated and one is not. The human mind is a truly remarkable pattern recognition machine.


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I've read many descriptions of how to use TA. All start with getting a chart of data and interpreting it. I've never seen one that starts with hire many PHD's, and buy millions of dollars of computers, and develop very sophisticated algorithms. When someone says they can use TA effectively, they aren't talking about algorithmic trading ala RennTech. Both are pattern matching, but on vastly different scales.

OP was asking about TA. Not whether he could duplicate RennTech's algorithms on his home supercomputer.

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RennTech may prove it's possible to beat the market through finding price patterns alone, just as Buffett proves it's possible to beat it through value investing, but RennTech is doing something that is essentially unduplicatable by small investors (and so far, Wall Street).


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So many assertions. How do you know there are no small investors doing this on a smaller scale? How do you know there are not other funds/firms doing this on a smaller scale or with results that are less spectacular but nonetheless valid and profitable?

esatbay

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I'm not arguing that other funds and small investors can't produce outstanding returns. Or that you can't find tradable patterns if you are smart enough and look hard enough. I'm just skeptical that some marketing huckster is going to sell you a TA system that can provide easy profits.

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"I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer"

Warren Buffett


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[Officer Farva]

FWIW, I work at a smaller Global Long short HF. We use "TA", supporting eastbay's assertions. Our key is that we do not rely on it soley, but rather as an additional indicator. My principal believes in mean regression in the market, and TA is the right tool to observe when instruments may be influenced by their gravitation back towards their temporal means.

[Sniper]

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The guys on TA infomercials are are not TA experts, they are just hucksters trying to sell dreams like the no money down real estate infomercials who want to sell you a system for $500. Don't judge the value of TA by them.

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fwiw, I know Michael "Waxie" Parness personally, and can attest to the fact that you can learn quite a bit about TA from his Trendfund system.