> But do they have any predictive power? No. How would you explain the performance of algorithms like these if technical indicators didn't have any predictive

> But do they have any predictive power? No. How would you explain the performance of algorithms like these if technical indicators didn't have any predictive power? https://www.quantopian.com/leaderboard/5550e55f09901773d900012e?month=6&year=2015 https://www.quantopian.com/leaderboard/5550e55f09901773d9000... Drawdown for the S&P500 is ~7% for the backtest period, and ~0.75% for the paper trading period, while performance is ~20% for both periods. These are automated algorithms, so the only thing they can base trade decisions on are objective, technical signals. Judging from the dramatically lower drawdown and higher performance, it'd be reasonable to assume that the trade decisions made by these algorithms are correct far more often than not, which means technical indicators must have some degree of predictive power. I agree with you on the fact that they can't possibly be used properly by a human trader though, even when assisted with sophisticated charting tools. But this is because human traders will have trouble objectively assessing the performance of their strategies over a long period of time, and because they lack the absolute precision and discipline required to effectively apply their strategies in the first place.