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Technical Analysis

Started by Islander , Feb 22 2011 09:43 AM

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#1 Islander

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Posted 22 February 2011 - 09:43 AM

As Joe Saluzzi, co-founder of Themis Trading LLC and outspoken exchange expert said in a recent interview,


"Things have changed," he cautions. With 50-70% of all trades being conducted by algorithms at micro-second time intervals, real human traders are increasingly challenged to understand how our markets actually work. "No longer do the technical patterns - that have lasted for years and years, and are written about all over - work anymore."

I knew I was slipping, but out of it entirely? :o

Islander

#2 arbman

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Posted 22 February 2011 - 09:53 AM

I do not think you can do singular spectrum analysis to minimize the energy of ALL patterns by eye in real time or any classical method will really help you that much. We just learned to calculate and apply these with the incredible computing power made available to us over the past 10 years... No the technical analysis is not dead, you just need to keep up, learn and upgrade... I do not think this next level of trading will improve for several years or even a decade or two from here... At least you know you can catch up!

@qckisa on twitter

#3 Islander

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Posted 22 February 2011 - 10:06 AM

Feel better already. Islander

#4 HoseB

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Posted 22 February 2011 - 10:07 AM

The "core" of TA has not changed in my 30 years as a trader. 1. The Trend Is Your Friend. 2. Buy support, sell resistance. 3. Chase breakouts. If your trading fights these concepts, you will lose.

Edited by HoseB, 22 February 2011 - 10:14 AM.

40,000 headmen couldn't make me change my mind....

#5 diogenes227

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Posted 22 February 2011 - 11:51 AM

I can't see a single high frequency trade on a chart.

"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."

#6 Islander

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Posted 22 February 2011 - 01:15 PM

Of course you can not see a HF trade, but that is NOT the point, the point is that HF trades are made based, not on TA, but price differences that have no known relationship to TA. Moreover, we often trade based on intermarket differences which have a high probability correlation coefficient, .7 or better of leading another stock or sector based on recent historical data. Certitude over one's TA is based on the same thing as an autopsy - reconstruction of events. Usually questionable at very best. Best, Islander

#7 diogenes227

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Posted 22 February 2011 - 01:46 PM

Of course you can not see a HF trade, but that is NOT the point, the point is that HF trades are made based, not on TA, but price differences that have no known relationship to TA. Moreover, we often trade based on intermarket differences which have a high probability correlation coefficient, .7 or better of leading another stock or sector based on recent historical data.

Certitude over one's TA is based on the same thing as an autopsy - reconstruction of events. Usually questionable at very best.

Best, Islander

What is the point? Quit trading until the government outlaws HFT?

Been through program trading. Been through portfolio insurance. Been through numbskulls off the street paying tuition to pushs button to grab a dime. Probably have forgotten fifty other HFT type practices and still the market either goes up or it goes down and after it does that for a while, you can draw a trendline, etc...

HFT is nothing to TA.

But I guess this Saluzzi idiot is smart enough to have a found a way to get himself interviews on business channels by yelling "the sky is falling! the sky is falling!"

"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."

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