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Yes - The Art and Science of Technical Analysis by Adam Grimes is fantastic. Typically these kinds of books take one of two extremes: 1. Markets are psycholog
by jashmenn 8y ago
Yes - The Art and Science of Technical Analysis by Adam Grimes is fantastic.
Typically these kinds of books take one of two extremes:
1. Markets are psychology and TA patterns will unlock profits
OR
2. Markets are mathematics and algorithms will unlock profits
Books in #1 will tell you all about Ichimoku clouds, fibonacci levels, fractal patterns, and how to read tea leaves.
Books in #2 tend to ignore the (real) psychological aspects of trading and don't give you much edge beyond a random walk.
Grimes book holds a special place in this dynamic: He discusses price action as psychology, but applies statistical tests to common trader folklore.
As a programmer and beginning trader/quant, Grimes book was exactly what I was looking for.
- saosebastiao 8y agoI've skimmed through Grimes' book a little and liked what I saw. I've independently taken a similar approach to TA and it has mostly worked out well for me. My personal take on TA is that Markets are psychology and TA is a slowly evolved form of feature engineering that has been finely tuned to be used by the most advanced visual pattern recognition algorithm we have, our brains. Many of these features can be tested and proven statistically, but they require additional feature engineering work to convert them from their visual pattern recognition purpose into something more suited to statistical inference. And just like any form of feature engineering, a lot of it doesn't work, but when you find what does work, it's pretty awesome.