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Funny, I read this is as a free and complete guide to the effects of confirmation bias. A free and complete guide to bullshit is just bullshit. Technical anal

Funny, I read this is as a free and complete guide to the effects of confirmation bias. A free and complete guide to bullshit is just bullshit. Technical analysis is a farce.

akhatri_aus 12y ago
Its free to support their main business. Zerodha looks to be a brokerage.
- confluence 12y ago
  Gotta keep the plebs trading. How else will they make bank?
- mahmud 12y ago
  So, baiting more suckers, I mean, "day traders".
SeanDav 12y ago
Like most things in life, it isn't quite that simple. There are real inefficiencies in the market which can be highlighted by TA. TA can also be considered a form of Statistical Arbitrage and vice versa. A simple example: There are many traders out there using TA, if sufficient numbers of them start following the same signals then real market impact occurs. You can use TA to establish what signals they are using and then front run them. This shows that TA has real power in some circumstances and there are many more out there. I could go into a lot more detail, but am pressed for time at the moment.
- confluence 12y ago
  > Like most things in life, it isn't quite that simple. Like most things in life, technical analysis is bullshit. > There are real inefficiencies in the market which can be highlighted by TA. TA can also be considered a form of Statistical Arbitrage and vice versa. Stat arb is not what is commonly known as technical analysis. They are distinct. > A simple example: There are many traders out there using TA, if sufficient numbers of them start following the same signals then real market impact occurs. You can use TA to establish what signals they are using and then front run them. This shows that TA has real power in some circumstances and there are many more out there. Keynesian beauty contests do not provide consistent alpha. If they did, we'd see fewer VCs flame out.
  - SeanDav 12y ago
    I have been a trader for 15 years, I have seen TA absolutely working and I have seen it failing. You can take the opinion of someone that has walked the walk, or not. I have given you a specific example where TA does work, so it can't all be bullshit right?
    - confluence 12y ago
      > You can take the opinion of someone that has walked the walk, or not. In opinions we trust? What kind of a trader are you? > I have been a trader for 15 years, I have seen "go all in on a bunch of calls" absolutely working and I have seen it failing. That sentence is basically void of content. > I have given you a specific example where TA does work, so it can't all be bullshit right? No. You could give me an example of homeopathic medicines used shortly before someone goes into remission. That doesn't mean that cures cancer.
      - SeanDav 12y ago
        Are you being deliberately obtuse? The example I gave is a logical one, which just happens to also work on occasion in the real world. It does not rely on what sort of trader I am, it is a thought scenario, which can and does work in the real world. Logically, if a large number of people are using a specific TA signal to make trades, their trades will move the market to a degree. Then if one knows what that signal is, one can reliably make money using the same TA signal. So even if the actual TA signal is a completely random walk, an alert person can make money from that TA signal if they understand that the market will move because some powerful players are using the same signal for whatever reason. TLDR: A bullshit signal can be used to reliably make money.
        confluence 12y ago
        > A bullshit signal can be used to reliably make money. Until it doesn't.
        jessaustin 12y ago
yummyfajitas 12y ago
Oh wait we're economists - free markets are sacrosanct and they are efficient - if there is an arbitrage opportunity to short surely the rational investors will price it correctly. Not. https://news.ycombinator.com/item?id=4589264#up_4589651 https://news.ycombinator.com/item?id=4589264#up_4589651 Glad to see you've changed your opinion and now believe that the (weak form) Efficient Markets Hypothesis holds.
- confluence 12y ago
  Just because I said that technical analysis is bullshit does not mean that I think EMT holds. I can also say that using the times bulls shit in Colorado to predict stock prices is bullshit. That once again does not mean that I think EMT holds. It just means that the technique I called out has no predictive value.
  - yummyfajitas 12y ago
    The claim "technical analysis doesn't work" is the weak form EMH. So yes, you are being inconsistent, unless I've mistakenly interpreted "technical analysis is bullshit" as "technical analysis doesn't work". Is it your belief that technical analysis does work, but is still bullshit?
    - confluence 12y ago
      Sorry, I read your statement too quickly. Missed the "weak". I thought you meant EMH holds (as I stated above).
    - haliax 12y ago
      Actually, I don't believe this is correct. The weak form EMH claims that any information provided by the price history of a security should already be incorporated into the current price. You can claim that Technical Analysis (construed as patterns in charts and the like) isn't valid and that weak form EMH doesn't hold, if you believe that charting fails to correctly incorporate the relevant information from the price history.
    - deleted 12y ago
Syi 12y ago
If you dont believe in technical analysis at all, what do you use to trade? Are you relying purely on fundamentals, following trends? Or are there other types of analysis that can be applied?

Funny, I read this is as a free and complete guide to the effects of confirmation bias. A free and complete guide to bullshit is just bullshit. Technical analysis is a farce.

akhatri_aus 12y ago

Its free to support their main business. Zerodha looks to be a brokerage.

confluence 12y ago
Gotta keep the plebs trading. How else will they make bank?
mahmud 12y ago
So, baiting more suckers, I mean, "day traders".

SeanDav 12y ago

Like most things in life, it isn't quite that simple. There are real inefficiencies in the market which can be highlighted by TA. TA can also be considered a form of Statistical Arbitrage and vice versa. A simple example: There are many traders out there using TA, if sufficient numbers of them start following the same signals then real market impact occurs. You can use TA to establish what signals they are using and then front run them. This shows that TA has real power in some circumstances and there are many more out there. I could go into a lot more detail, but am pressed for time at the moment.

confluence 12y ago
> Like most things in life, it isn't quite that simple. Like most things in life, technical analysis is bullshit. > There are real inefficiencies in the market which can be highlighted by TA. TA can also be considered a form of Statistical Arbitrage and vice versa. Stat arb is not what is commonly known as technical analysis. They are distinct. > A simple example: There are many traders out there using TA, if sufficient numbers of them start following the same signals then real market impact occurs. You can use TA to establish what signals they are using and then front run them. This shows that TA has real power in some circumstances and there are many more out there. Keynesian beauty contests do not provide consistent alpha. If they did, we'd see fewer VCs flame out.
- SeanDav 12y ago
  I have been a trader for 15 years, I have seen TA absolutely working and I have seen it failing. You can take the opinion of someone that has walked the walk, or not. I have given you a specific example where TA does work, so it can't all be bullshit right?
  - confluence 12y ago
    > You can take the opinion of someone that has walked the walk, or not. In opinions we trust? What kind of a trader are you? > I have been a trader for 15 years, I have seen "go all in on a bunch of calls" absolutely working and I have seen it failing. That sentence is basically void of content. > I have given you a specific example where TA does work, so it can't all be bullshit right? No. You could give me an example of homeopathic medicines used shortly before someone goes into remission. That doesn't mean that cures cancer.
    - SeanDav 12y ago
      Are you being deliberately obtuse? The example I gave is a logical one, which just happens to also work on occasion in the real world. It does not rely on what sort of trader I am, it is a thought scenario, which can and does work in the real world. Logically, if a large number of people are using a specific TA signal to make trades, their trades will move the market to a degree. Then if one knows what that signal is, one can reliably make money using the same TA signal. So even if the actual TA signal is a completely random walk, an alert person can make money from that TA signal if they understand that the market will move because some powerful players are using the same signal for whatever reason. TLDR: A bullshit signal can be used to reliably make money.
      - confluence 12y ago
        > A bullshit signal can be used to reliably make money. Until it doesn't.
      - jessaustin 12y ago

yummyfajitas 12y ago

Oh wait we're economists - free markets are sacrosanct and they are efficient - if there is an arbitrage opportunity to short surely the rational investors will price it correctly. Not. https://news.ycombinator.com/item?id=4589264#up_4589651 https://news.ycombinator.com/item?id=4589264#up_4589651 Glad to see you've changed your opinion and now believe that the (weak form) Efficient Markets Hypothesis holds.

confluence 12y ago
Just because I said that technical analysis is bullshit does not mean that I think EMT holds. I can also say that using the times bulls shit in Colorado to predict stock prices is bullshit. That once again does not mean that I think EMT holds. It just means that the technique I called out has no predictive value.
- yummyfajitas 12y ago
  The claim "technical analysis doesn't work" is the weak form EMH. So yes, you are being inconsistent, unless I've mistakenly interpreted "technical analysis is bullshit" as "technical analysis doesn't work". Is it your belief that technical analysis does work, but is still bullshit?
  - confluence 12y ago
    Sorry, I read your statement too quickly. Missed the "weak". I thought you meant EMH holds (as I stated above).
  - haliax 12y ago
    Actually, I don't believe this is correct. The weak form EMH claims that any information provided by the price history of a security should already be incorporated into the current price. You can claim that Technical Analysis (construed as patterns in charts and the like) isn't valid and that weak form EMH doesn't hold, if you believe that charting fails to correctly incorporate the relevant information from the price history.
  - deleted 12y ago

Syi 12y ago

If you dont believe in technical analysis at all, what do you use to trade? Are you relying purely on fundamentals, following trends? Or are there other types of analysis that can be applied?