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But that also gives it power... the more people act on a given indicator the more powerful (even predictable) it becomes So then you end up with this weird cat

by tomc1985 5y ago

But that also gives it power... the more people act on a given indicator the more powerful (even predictable) it becomes So then you end up with this weird catch-22 where the indicator only has value because people are watching it, while it is those people watching it that gives them their power. They aren't going to be as useful for forecasting the big institutional curbstomps that seem to characterize volatility today, but there are other ways of understanding how those guys behave.

szundi 5y ago
If more and more people know this, it loses power
- tomc1985 5y ago
  It isn't whether or not more and more people know it, it's weather or not they can overcome their emotions to use it effectively. And I think that proportion of people will continue to remain insignificant
- sumedh 5y ago
  That depends, the prices sometimes jump up or down the TA lines and moving averages, that is when lot of people get out but then the trend reverses and follows whatever the original pattern was. So you still have to make a decision which may or may not be right.
agumonkey 5y ago
The self fulfilling prophecy aspect of speculative trading is often one of the first thing a trader notices. Now I really wonder if that's not a necessity of semi chaotic systems. A predictable game has no gain to offer, a fully chaotic game is unplayable.. the players will settle on a few emergent patterns to create a form of ladder.
- tomc1985 5y ago
  > emergent patterns to create a form of ladder While I think there are very strong whiffs of alchemy (i.e. belief) in a lot of forms of technical analysis, a number of these patterns have a psychosocial story to them, and the pattern itself is the fingerprint of how that story manifests. (Much like how an earthquake leaves a predictable pattern on a seismograph)
  - agumonkey 5y ago
    You say alchemy I say superstition. Actually trading at the quant level was the deepest anthropological experiment I ever saw. So much reptilian emotions it was incredible :)

szundi 5y ago

If more and more people know this, it loses power

tomc1985 5y ago
It isn't whether or not more and more people know it, it's weather or not they can overcome their emotions to use it effectively. And I think that proportion of people will continue to remain insignificant
sumedh 5y ago
That depends, the prices sometimes jump up or down the TA lines and moving averages, that is when lot of people get out but then the trend reverses and follows whatever the original pattern was. So you still have to make a decision which may or may not be right.

agumonkey 5y ago

The self fulfilling prophecy aspect of speculative trading is often one of the first thing a trader notices. Now I really wonder if that's not a necessity of semi chaotic systems. A predictable game has no gain to offer, a fully chaotic game is unplayable.. the players will settle on a few emergent patterns to create a form of ladder.

tomc1985 5y ago
> emergent patterns to create a form of ladder While I think there are very strong whiffs of alchemy (i.e. belief) in a lot of forms of technical analysis, a number of these patterns have a psychosocial story to them, and the pattern itself is the fingerprint of how that story manifests. (Much like how an earthquake leaves a predictable pattern on a seismograph)
- agumonkey 5y ago
  You say alchemy I say superstition. Actually trading at the quant level was the deepest anthropological experiment I ever saw. So much reptilian emotions it was incredible :)