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sallystrothers
09-12-2010, 03:31 PM
I'm curious if anyone can help me understand the logic of technical analysis of economic data purely as a function of time? From both my experience and education, time is very very very rarely the underlying cause in driving any behavior in the natural world. Time can show correlation with economic data but certainly is never driving force of markets. Economic data often can be driven by policy, resources, culture, technology, etc. so why is it rarely shown in the context of these variables? Surely there is value in having a multivariate relationship with complex interactions utilized in predicting markets? Why do we rarely see them? For reference, the principles I live by in analytic design are:

1. Show comparisons, contrasts, and differences
2. Emphasize causality and de-emphasize correlation
3. Utilize multivariate methods
4. Integrate evidence: combine pictures, words, diagrams, charts, etc.
5. Document sources of data
6. Carefully choose content that is relevant, of integrity, and well understood

Carpenter
09-12-2010, 03:36 PM
I'm curious if anyone can help me understand the logic of technical analysis of economic data purely as a function of time? From both my experience and education, time is very very very rarely the underlying cause in driving any behavior in the natural world. Time can show correlation with economic data but certainly is never driving force of markets. Economic data often can be driven by policy, resources, culture, technology, etc. so why is it rarely shown in the context of these variables? Surely there is value in having a multivariate relationship with complex interactions utilized in predicting markets? Why do we rarely see them? For reference, the principles I live by in analytic design are:

1. Show comparisons, contrasts, and differences
2. Emphasize causality and de-emphasize correlation
3. Utilize multivariate methods
4. Integrate evidence: combine pictures, words, diagrams, charts, etc.
5. Document sources of data
6. Carefully choose content that is relevant, of integrity, and well understood

In my opinion this is a false assumption.
But I'm just an uneducated carpenter.

sallystrothers
09-12-2010, 03:40 PM
In my opinion this is a false assumption.
But I'm just an uneducated carpenter.

It is counter-intuitive at first, but for example, the weathering of rocks on an ocean beach is not caused by time but rather the amount of waves bashing into them, the amount of sunlight, the amount of wind. The rocks do not weather because of time, however, across the span of time there are more waves, wind, sun, etc.

That's the way I look at it anyways.

Got Goldies
09-12-2010, 03:42 PM
Those who can read Technical Analysis are the Mozart types.

Carpenter
09-12-2010, 03:44 PM
It is counter-intuitive at first, but for example, the weathering of rocks on an ocean beach is not caused by time but rather the amount of waves bashing into them, the amount of sunlight, the amount of wind. The rocks do not weather because of time, however, across the span of time there are more waves, wind, sun, etc.

That's the way I look at it anyways.

I understand your point, but without the time to do so the elements can have no effect.
I am not the one to answer your question, good luck.

Haliaeetus
09-12-2010, 04:18 PM
Time can be important to cycles that rely on human psychology. Market valuations and economic cycles rely in part on shifts in mass psychology. It takes time for those shifts to occur.

Got Goldies
09-12-2010, 04:23 PM
I'm curious if anyone can help me understand the logic of technical analysis of economic data purely as a function of time?

Sure.

Time is money. Without time, there is no money. Without money, there is no time. So you need time and money.

Now how to get both? You have figure out where the next bull market is.

sallystrothers
09-13-2010, 11:25 AM
Sure.

Time is money. Without time, there is no money. Without money, there is no time. So you need time and money.

Now how to get both? You have figure out where the next bull market is.

Time itself I would say is not money. Work is money. Over the course of time the work done produces the money. When you deposit money into a CD you don't get a return because of time. They use time as an easy metric but the return you get is because of the work your money is doing.

altern8life
09-13-2010, 11:39 AM
It is counter-intuitive at first, but for example, the weathering of rocks on an ocean beach is not caused by time but rather the amount of waves bashing into them, the amount of sunlight, the amount of wind. The rocks do not weather because of time, however, across the span of time there are more waves, wind, sun, etc.

That's the way I look at it anyways.

To take an example, radioactive decay is completely driven by time. Half lives are totally independent of all other factors. In fact, most of quantum mechanics is simply a statistical probability of energy states that can described by only a very few fundamental variables, and time plays a key role.

And since quantum mechanics is the driving force behind everything, it is in essence time at the bottom of the pyramid. It is only your perspective which thinks that these things are not based on time, because the timescale is so small.

If you expand an investment chart out over centuries, you can probably average away the time components also. But if you are trying to act on very short intervals of a few months, you must take the statistical factors of time into account.

Your analogy does not really hold, despite seeming like it does. You need to adjust your scale.

RFID trumps
09-13-2010, 11:53 AM
Time itself I would say is not money. Work is money. Over the course of time the work done produces the money. When you deposit money into a CD you don't get a return because of time. They use time as an easy metric but the return you get is because of the work your money is doing.

So doing nothing, wasting time, is losing money in other words? Time is the ultimate currency, it becomes what one spends it on. If one spends their time and converts it into CD's that do little over time, that is time wasted in other words. Labor is based on time spent. Quality and quantity are measured with time. Earning and losing takes time. Time itself is everything to each individual. Life itself is measured in time and that is the Grand investment! Time runs out for 10 out of 10 people eventually.... how much is left on your lifes clock IS more important than whats in your wallet.
Power is controlling others lives through fiat machines.... Billions of people spend their lives struggling for pieces of paper, and the paper people push the worlds buttons via politics and print paper. Time is what you make of it..

sallystrothers
09-13-2010, 12:25 PM
To take an example, radioactive decay is completely driven by time. Half lives are totally independent of all other factors. In fact, most of quantum mechanics is simply a statistical probability of energy states that can described by only a very few fundamental variables, and time plays a key role.

And since quantum mechanics is the driving force behind everything, it is in essence time at the bottom of the pyramid. It is only your perspective which thinks that these things are not based on time, because the timescale is so small.

If you expand an investment chart out over centuries, you can probably average away the time components also. But if you are trying to act on very short intervals of a few months, you must take the statistical factors of time into account.

Your analogy does not really hold, despite seeming like it does. You need to adjust your scale.

I think you misunderstood my point. I am saying time never is the CAUSE of an effect. I do wholeheartedly agree that time CORRELATES with an effect. Even with radioactive decay time is not the underlying driving force, it is the vibrational, translational, and rotational intra-molecular forces that cause the decay. Once again, over the course of time the probability of an extreme atomic oscillation approaches 1 and you observe the decay.

Also with quantum mechanics, time serves as a correlation with electron probabilities and is used in the equations but is NOT THE DRIVING FORCE.

sallystrothers
09-13-2010, 12:29 PM
Some may have already read the book, but I recommend "a random walk down wall street" which describes the fallacy of time series based technical analysis. Again, I support technical analysis but in the intelligent, multivariate, and cause based approach.

altern8life
09-13-2010, 03:24 PM
I think you misunderstood my point. I am saying time never is the CAUSE of an effect. I do wholeheartedly agree that time CORRELATES with an effect. Even with radioactive decay time is not the underlying driving force, it is the vibrational, translational, and rotational intra-molecular forces that cause the decay. Once again, over the course of time the probability of an extreme atomic oscillation approaches 1 and you observe the decay.

Also with quantum mechanics, time serves as a correlation with electron probabilities and is used in the equations but is NOT THE DRIVING FORCE.

I think you are getting into semantics now.

Radio active decay happens on a nucleus. Not a molecule. Intra-molecular forces and the other things you mentioned are irrelevant. It is all a function of the weak nuclear force, which randomly changes the flavor of a quark. You can argue that the weak nuclear force is the driving force in this case, but since its interactions can be completely described as a function time with no other references to any outside causes, it is a distinction without a difference. Time causes radioactive decay because of the presence of the weak nuclear force, or the weak nuclear force causes radioactive decay according to a set function of time. In either case, time and only time is the significant variable.

I don't think anyone understands the mechanisms of investor psychology well enough to describe it at the level of detail scientists describe particle physics, but when you read about technical analysis you have to accept it in the same way you accept quantum mechanics. It is a mathematical model that expresses how a system should evolve over time based on a set of discrete variables.

To say that technical analysis has no physical analogy in the natural world is not correct. It may have no physical analogy in classical mechanics, but at the quantum level it works in exactly the same way. Events occur in a statistical pattern based on a period of time passing. Think of investors as a group of bosons. All you can say about them is that they may change from proton to neutron in a specific way over a specific period of time. You don't know why, and there is no theory which explains it in a deterministic manner.

Over a vast period of time, say a century or more, it is quite easy to say that buggy whip manufacturers died out because of the automobile. No time variable is necessary. This is classical mechanics in operation. Cause and effect. But on the trading floor during the time when buggy whip manufactures were still in business, it was a messy function of ups and downs with no apparent cause, just patterns and time. You may have known that next decade the company would be bankrupt through fundamentals, but that wouldn't have helped you guess where the stock would be tomorrow. That is the messy quantum level, which can't be predicted, and which is why trading is so difficult compared to long term value investing.

Got Goldies
09-13-2010, 04:42 PM
Time is money and history repeats. Once you unlock the secrets of the clock (tomb raider) you can go back in time and fix a future event.

I did it.

I never thought I would have a house at 40 (paid for in full).

Quad G
09-13-2010, 05:44 PM
If I understand your question correctly,

Here are a few examples of how time is a key ingredient in the way markets behave:

http://i746.photobucket.com/albums/xx108/QuadG/oil14-15weekcycle.jpg

http://i746.photobucket.com/albums/xx108/QuadG/8-9daycycle8-21-10.jpg

Gold has been making turns at 9-10 week intervals on weekly closing basis.

The 30 year Bond market has been making top to top turns every 10-11 months since 2007.

untill recently, the Gold to silver ratio was making turns near every 3.5 months (top to top, bottom to bottom)

These repeating cycles are seemingly un-explainable as to 'why' they occur, but a study of Gann and Elliot have shed some light.

Cycles can also be classified as short term, Medium term and Long term. Short term daily and weekly cycles may only last a few months. Long term monthly and yearly cycle may last decades. In my estimation time cycles are not eternal, given enough time they will decay in significance.....just.....like......everything.... ...else.......



...

Got Goldies
09-13-2010, 05:46 PM
Quad, are you saying crude oil hits a top every 14.5 weeks?

Quad G
09-13-2010, 06:20 PM
Quad, are you saying crude oil hits a top every 14.5 weeks?

not neccesarily at tops, but as you can see, sometimes it targets bottoms. For the past several months since 2009, 14 to 15 weeks has produced a turn. Valuable information don't you think?


...

Got Goldies
09-13-2010, 07:05 PM
not neccesarily at tops, but as you can see, sometimes it targets bottoms. For the past several months since 2009, 14 to 15 weeks has produced a turn. Valuable information don't you think?


...

Silver did the same thing when it was $4. It would, every 2 weeks, drop. Up and down for 20 years. But I'm not any richer. I'm looking for da bull market.

chartsrgood
09-14-2010, 01:39 AM
It is counter-intuitive at first, but for example, the weathering of rocks on an ocean beach is not caused by time but rather the amount of waves bashing into them, the amount of sunlight, the amount of wind. The rocks do not weather because of time, however, across the span of time there are more waves, wind, sun, etc.

That's the way I look at it anyways.

The amount of waves hitting the rocks is dependent on the tide. At low tide there may not be any water hitting some of the rocks. And of course the tides run in a cycle. The amount of time from low to high tide is fairly constant. There are also high tides and low tides in the financial markets with the tide either coming in or going out.

Using your example of the ocean hitting the rocks, if you asked the question, when would the rocks get hit the hardest and also the least/lightest? Time is directly involved, and the cycle of the tides would be used to answer the question.

Quad G
09-14-2010, 07:06 AM
The amount of waves hitting the rocks is dependent on the tide. At low tide there may not be any water hitting some of the rocks. And of course the tides run in a cycle. The amount of time from low to high tide is fairly constant. There are also high tides and low tides in the financial markets with the tide either coming in or going out.

Using your example of the ocean hitting the rocks, if you asked the question, when would the rocks get hit the hardest and also the least/lightest? Time is directly involved, and the cycle of the tides would be used to answer the question.

Well said!



...

AlbyVA
09-14-2010, 07:21 AM
I'm curious if anyone can help me understand the logic of technical analysis of economic data purely as a function of time?


Don't waste your time. Chart Monkeys are akin to coin flipping. They make you
think that data on transactions can create a forecast of the future in which
you can profit on. It ignores the fact that prices are dictated by the buying
and selling of a widget. And the number of buyers and sellers all varies from
day to day because of various reasons. Reasons that are outside of the
chart monkeys ability to predict.

Chart Monkeys can't predict when a Gold Mine might have a decline in
production. They can't see that fewer Indians are buying gold this year
because the economy is tanking. Chart monkeys can't see that today,
there was an unreasonable large number of sell orders for Gold because
jewelry makers are ramping up for Christmas.

The keys to success is (a) Investing and (b) Investing on Fundamentals.
Day Trading on Chart Monkey Speculations is a fast track ticket to
poverty.

sallystrothers
09-14-2010, 09:14 AM
The amount of waves hitting the rocks is dependent on the tide. At low tide there may not be any water hitting some of the rocks. And of course the tides run in a cycle. The amount of time from low to high tide is fairly constant. There are also high tides and low tides in the financial markets with the tide either coming in or going out.

Using your example of the ocean hitting the rocks, if you asked the question, when would the rocks get hit the hardest and also the least/lightest? Time is directly involved, and the cycle of the tides would be used to answer the question.

Tide is yet another cause of the weathering of coastal rocks. And yes tide is cyclical with a relationship to time. But time does not cause tide to take place. The moon's position in relation to the earth CAUSES the tide.

Now lets consider two different people with the tide analogy. One person notices that the tide is strongly related to time. The 2nd person realizes that the moon's position around the earth provides a better relationship to tide.

Person 1 tracks time and can accurately predict the tides until one day when the moon changes orbit from the earth. Person 1 can no longer predict the tides.

Person 2 tracks the moon's position and also can accurately predict the tides. The moon changes orbit and since they track the moon's position their model continues to accurately predict the tides.


The same analogy applies in markets. Time may serve as a correlating variable but will NEVER be as good as any of the driving variables.

chartsrgood
09-14-2010, 01:37 PM
T
Person 1 tracks time and can accurately predict the tides until one day when the moon changes orbit from the earth.


Please explain. Thanks

sallystrothers
09-14-2010, 07:54 PM
Don't waste your time. Chart Monkeys are akin to coin flipping. They make you
think that data on transactions can create a forecast of the future in which
you can profit on. It ignores the fact that prices are dictated by the buying
and selling of a widget. And the number of buyers and sellers all varies from
day to day because of various reasons. Reasons that are outside of the
chart monkeys ability to predict.

Chart Monkeys can't predict when a Gold Mine might have a decline in
production. They can't see that fewer Indians are buying gold this year
because the economy is tanking. Chart monkeys can't see that today,
there was an unreasonable large number of sell orders for Gold because
jewelry makers are ramping up for Christmas.

The keys to success is (a) Investing and (b) Investing on Fundamentals.
Day Trading on Chart Monkey Speculations is a fast track ticket to
poverty.

Yes. I used to day trade when I used to have thurs and fri off. Over the course of 2 years I ended at -5%. All of my work went into the hands of my broker in the form of many commissions. By the way I have friends who maintain the hardware components of the super computers that high end traders use and they are no joke. Of course they don't have access to the algorithms but the computers are insane, you are not going to out-wit one of those in the day trading business.

sallystrothers
09-14-2010, 07:57 PM
Please explain. Thanks

In this analogy, Person 1 believes the best method to track the tides is with time. This model works based on the assumption that the moon never changes its orbit.

May be a good assumption in this case but move the analogy over to markets. How often does the market environment change?

Got Goldies
09-14-2010, 09:32 PM
Don't waste your time. Chart Monkeys are akin to coin flipping. They make you
think that data on transactions can create a forecast of the future in which
you can profit on. It ignores the fact that prices are dictated by the buying
and selling of a widget. And the number of buyers and sellers all varies from
day to day because of various reasons. Reasons that are outside of the
chart monkeys ability to predict.

Chart Monkeys can't predict when a Gold Mine might have a decline in
production. They can't see that fewer Indians are buying gold this year
because the economy is tanking. Chart monkeys can't see that today,
there was an unreasonable large number of sell orders for Gold because
jewelry makers are ramping up for Christmas.

The keys to success is (a) Investing and (b) Investing on Fundamentals.
Day Trading on Chart Monkey Speculations is a fast track ticket to
poverty.


You have to have the chart talent. How come we don't hear about your trades? Perhaps if you invest some time to learn the simple basics you can predict the future like I can.
Charting is are they going to buy A or are they going to buy B.
Its pretty freaking simple.

Predicting human behavior is not a science project anymore.

AlbyVA
09-14-2010, 09:54 PM
Yes. I used to day trade when I used to have thurs and fri off. Over the course of 2 years I ended at -5%. All of my work went into the hands of my broker in the form of many commissions. By the way I have friends who maintain the hardware components of the super computers that high end traders use and they are no joke. Of course they don't have access to the algorithms but the computers are insane, you are not going to out-wit one of those in the day trading business.


I suppose the big names have the Arbitrage business cornered.
Guess the days of buying Yen with Dollars, to buy Swiss Francs with
Yen, only to turn around and buy dollars with Francs and squeeze out
a few nickels with a Triple Arbitrage is over? Damn Technology. lol

AlbyVA
09-14-2010, 10:00 PM
Predicting human behavior is not a science project anymore.


Muahahahahaha.... Yeah, thats what they said just before:

Oct. 29th, 1929
Oct. 19th, 1987
Sept. 16th, 2008


Remember to read up on the Greater Fool Theory:

http://en.wikipedia.org/wiki/Greater_fool_theory

The greater fool theory is the belief held by one who makes a
questionable investment, with the assumption that they will be able
to sell it later to "a greater fool"; in other words, buying something not
because you believe that it is worth the price, but rather because you
believe that you will be able to sell it to someone else at an even higher
price

Got Goldies
09-14-2010, 10:04 PM
Alba, can I ask how you know when to time your investments?

I don't day trade, I position myself for 6 month to 12 month trades.


That great fool theory of yours? Are you saying I did not feel like a fool when I ignored people that said to purchase a home in 1993? I laughed at my broker when he said DOW to 10 k.

AlbyVA
09-14-2010, 10:21 PM
Alba, can I ask how you know when to time your investments?

I don't day trade, I position myself for 6 month to 12 month trades.


That great fool theory of yours? Are you saying I did not feel like a fool when I ignored people that said to purchase a home in 1993? I laughed at my broker when he said DOW to 10 k.




Got Goldies:

Thats just it, you don't "time" your investments. You price out the
future earn power of a company then look at the value of the stock.

A better way to think about it, is like a bond investment. If a $100 bond
is going to yield $200 over its life and the current sticker price on that bond
is $300, only a fool would buy it. The same is true with stocks of companies.
If earning potential of Exxon Mobil over the next 20yrs is 500/billion and
the stock is at 250/billion (ie: market cap), then Investing in Exxon for the
next 20yrs will likely net me a 100% profit. Thats equal to an average
yearly return on investment of around 3.5% excluding all the dividends
I'd be paid for just holding the stock. If you throw in the dividends of a
company like Exxon, hold it for 20yrs would yield a 135% return.

Its a long term investment in which you can ignore the daily ups and downs
of the market and just focus on the core business and if its still on target
to meet your long term goals.

The only people who benefit from day traders who try to catch lightning
in a bottle, are the brokers collecting commissions on every trade.

chartsrgood
09-14-2010, 10:28 PM
In this analogy, Person 1 believes the best method to track the tides is with time. This model works based on the assumption that the moon never changes its orbit.

May be a good assumption in this case but move the analogy over to markets. How often does the market environment change?

You had given the impression that keeping track of ocean tides by time would only work for awhile because the moon orbit would change and make keeping track of tides by time no longer practical. The moon orbit is not going to change for millions of years. Just wanted to clear that up.

I normally do not use Wikipedia as a source, but in this case it will do.

http://en.wikipedia.org/wiki/Orbit_of_the_Moon

"The Moon is gradually receding from the Earth into a higher orbit, and calculations[3][4] suggest that this would continue for about fifty billion years. By that time, the Earth and Moon would become caught up in what is called a "spin–orbit resonance" in which the Moon will circle the Earth in about 47 days (currently 29 days), and both Moon and Earth would rotate around their axes in the same time, always facing each other with the same side. However, the slowdown of the Earth's rotation is not occurring fast enough for the rotation to lengthen to a month before other effects change the situation: about 2.1 billion years from now, the increase of the Sun's radiation will have caused the Earth's oceans to vaporize, removing the bulk of the tidal friction and acceleration".

Got Goldies
09-14-2010, 11:50 PM
Got Goldies:

Thats just it, you don't "time" your investments. You price out the
future earn power of a company then look at the value of the stock.

A better way to think about it, is like a bond investment. If a $100 bond
is going to yield $200 over its life and the current sticker price on that bond
is $300, only a fool would buy it. The same is true with stocks of companies.
If earning potential of Exxon Mobil over the next 20yrs is 500/billion and
the stock is at 250/billion (ie: market cap), then Investing in Exxon for the
next 20yrs will likely net me a 100% profit. Thats equal to an average
yearly return on investment of around 3.5% excluding all the dividends
I'd be paid for just holding the stock. If you throw in the dividends of a
company like Exxon, hold it for 20yrs would yield a 135% return.

Its a long term investment in which you can ignore the daily ups and downs
of the market and just focus on the core business and if its still on target
to meet your long term goals.

The only people who benefit from day traders who try to catch lightning
in a bottle, are the brokers collecting commissions on every trade.

Are you any richer without chart knowledge? Yes or No.

There is certain symbols to charting. If can identify them I can make bucks. Charting the DOW is no good for only that it provide a sell point.

AlbyVA
09-15-2010, 06:15 AM
Are you any richer without chart knowledge? Yes or No.

There is certain symbols to charting. If can identify them I can make bucks. Charting the DOW is no good for only that it provide a sell point.



Charting is nothing more than a feeble attempt to put human emotions
into a predictable equation. If charting really worked, making money would
be easy and we'd all be millionaires, because charting's sale point is to
dupe you into believing that you can predict the future and thus profit
from it.

Charts tell you the past, but they cannot predict the future. The are, at best, educated guesses. And when you couple guess work with day trading,
you get richer brokers and poorer traders. Sometimes you might be right,
sometimes you might be wrong. But the volume at which you monkey
around trading only pumps all any profits you do make back into the hands
of the broker.

At best, the only people who might even have a remote chance of making
charting successful are those who hold seats on the exchanges and can
trade for free (ie: The Brokers Themselves).

sallystrothers
09-15-2010, 09:15 AM
You had given the impression that keeping track of ocean tides by time would only work for awhile because the moon orbit would change and make keeping track of tides by time no longer practical. The moon orbit is not going to change for millions of years. Just wanted to clear that up.

I normally do not use Wikipedia as a source, but in this case it will do.

http://en.wikipedia.org/wiki/Orbit_of_the_Moon

"The Moon is gradually receding from the Earth into a higher orbit, and calculations[3][4] suggest that this would continue for about fifty billion years. By that time, the Earth and Moon would become caught up in what is called a "spin–orbit resonance" in which the Moon will circle the Earth in about 47 days (currently 29 days), and both Moon and Earth would rotate around their axes in the same time, always facing each other with the same side. However, the slowdown of the Earth's rotation is not occurring fast enough for the rotation to lengthen to a month before other effects change the situation: about 2.1 billion years from now, the increase of the Sun's radiation will have caused the Earth's oceans to vaporize, removing the bulk of the tidal friction and acceleration".

I was saying that time, although may work from time to time, will never be as good of a model as an actual driving force, in this case the moon. I've built hundreds of complex predictive models for the manufacturing environment and I have never ever used time as a variable in the model. Time is only good detecting changes in markets. It will never predict anything.

sallystrothers
09-15-2010, 09:27 AM
Are you any richer without chart knowledge? Yes or No.

There is certain symbols to charting. If can identify them I can make bucks. Charting the DOW is no good for only that it provide a sell point.

Although it is not financial, check out Minards representation of Napoleon's march in 1812. You can see how the army dwindles down due to geographic and temperature variables. Imagine this plotted purely as a function of time, you would not have nearly the level of understanding of the march.

This is what I am saying financial charting should look like at a minimum.

http://www.edwardtufte.com/tufte/graphics/poster_newposter.gif

chartsrgood
09-15-2010, 02:44 PM
I was saying that time, although may work from time to time, will never be as good of a model as an actual driving force, in this case the moon. I've built hundreds of complex predictive models for the manufacturing environment and I have never ever used time as a variable in the model. Time is only good detecting changes in markets. It will never predict anything.

Thank you for your views.
I have no desire to argue/disagree with your thoughts on the Merits of TA.
My point was that time is an excellent tool to use if one wants to know when high and low tides are going to occur in the ocean, and will continue to be for a long time.

hugo_danner
09-15-2010, 07:06 PM
My question is, how the hell can TA work when the market is so damn manipulated?!? Doesn't that queer the results?

Got Goldies
09-15-2010, 07:10 PM
Well, in the army, you have to deploy all the tools you can to get an edge above the common soldier. T/A is an art much like Ninjitsu is.

chartsrgood
09-16-2010, 01:09 AM
But time does not cause tide to take place. The moon's position in relation to the earth CAUSES the tide.


I would say for finding when high or low tides are going to be the cause of the tides does not really matter. It is the measurement of time that matters.

We have all heard of the infamous 4 minute mile. Is time the cause of running a fast mile? Of course not. But... does one measure the length of one's stride and the speed/velocity at which one's legs are moving up and down to determine the speed... after all it is the movement of the legs which is the direct cause of the speed. Or does one take a stop watch and say hey they ran a four minute mile!

chartsrgood
09-16-2010, 01:51 AM
Don't waste your time. Chart Monkeys are akin to coin flipping. They make you
think that data on transactions can create a forecast of the future in which
you can profit on. It ignores the fact that prices are dictated by the buying
and selling of a widget. And the number of buyers and sellers all varies from
day to day because of various reasons. Reasons that are outside of the
chart monkeys ability to predict.

Chart Monkeys can't predict when a Gold Mine might have a decline in
production. They can't see that fewer Indians are buying gold this year
because the economy is tanking. Chart monkeys can't see that today,
there was an unreasonable large number of sell orders for Gold because
jewelry makers are ramping up for Christmas.

The keys to success is (a) Investing and (b) Investing on Fundamentals.
Day Trading on Chart Monkey Speculations is a fast track ticket to
poverty.

Do you know the reason why the top chart monkeys are from India and Brazil? Lots of bananas.

"Don't waste your time. Chart Monkeys are akin to coin flipping."

Fundamentalist chimpanzees are akin to going for an inside straight where the odds are against them 12 to 1. I'll go with the chart monkey and the bananas thank you.

"Chart Monkeys can't predict when a Gold Mine might have a decline in
production."

Fundamentalist chimpanzees would screw up the figures anyway
Besides, it is not a decline in production that matters. It is the stock price that matters!

"Reasons that are outside of the
chart monkeys ability to predict".

It is all in the art of how one peels the banana

I'm hungry.........

sallystrothers
09-16-2010, 03:50 PM
I would say for finding when high or low tides are going to be the cause of the tides does not really matter. It is the measurement of time that matters.

We have all heard of the infamous 4 minute mile. Is time the cause of running a fast mile? Of course not. But... does one measure the length of one's stride and the speed/velocity at which one's legs are moving up and down to determine the speed... after all it is the movement of the legs which is the direct cause of the speed. Or does one take a stop watch and say hey they ran a four minute mile!

Tides are only an analogy. The main point is missed that no matter what, time is a sub-par variable for economic markets. There will always be better variables to track with market data than time. My original question still remains unanswered, why don't people focus more effort on the other variables?

As for your jogging analogy, this is completely different. Time in this case is a response variable and not a proposed factor determining the outcome.

chartsrgood
09-16-2010, 07:30 PM
Tides are only an analogy. The main point is missed that no matter what, time is a sub-par variable for economic markets. There will always be better variables to track with market data than time. My original question still remains unanswered, why don't people focus more effort on the other variables?

As for your jogging analogy, this is completely different. Time in this case is a response variable and not a proposed factor determining the outcome.

I would seriously suggest you read "Reminisciences of a Stock Operator", a classic about Jesse Livermore.
___________________________

If one is looking for certainty in the markets, it likely will not happen.
The best one can do is put the probability of success on their side.

Here is a real life example involving time in the financial markets.

Every 4 years for a 15 month period starting in October of each mid term election year in the US since I believe 1934, the Dow has been up every year in that time period with an average gain of about 25%. That cycle kicks in one month from now.(the stat was posted by Jayhawk on Cyclist's thread about a month or two ago).

Regarding that cycle, we do not know whether it will work this time or not. It is only known the probability is very high that it will, as this cycle has been in effect for about 75 years. Could it be different this time? Sure, but given the enormous success of this cycle I would not want to be short in the context of going against the cycle.

Why does this cycle work? The Exact factual answer is likely not known. One can guess and hypothesize on that. What does matter is that it has worked. Livermore goes into the whys of market movements in his book, btw.

If one is considering shorting and holding that short position for say the next 6 or 8 months because they expect a severe market decline, knowing this info about the mid term election cycle may put a damper on that reasoning. Again one does not need to why the cycle has performed this way. The Key is to know that it has!