Forum Archive Index - February 2003

["Morgy" <morgy40@xtra.co.nz>]

Snoopy & Travis

I spoke to Dr Alex Elder about your (& Travis's)  request for information on
traders using TA, Alex has been a professional trader for over 20 years but
he suggests you read "market wizards by Jack Swagger who gives plenty of
examples of succesful traders (I have not read it) , I also know of Darryl
Guppy and Colin Nicholson in Australia, Darral is a straight out techncian
and Colin uses FA to sort targets and TA to get in and out and advocates
this method strongly. On his web site he talks of 2 professional traders he
knows and vouches for personally , one being american (Dan Gramza ) and the
other a  Englishman (I think his name is Tony Plimmer) both of whom ran
funds under  management using TA.
John J Murphy has been a  professional trader, analyst (Technical) &TA fund
manager for many years.

John Bollinger, must have heard of him Travis, surely

I am also a member of the IFTA (international federation of Technical
Analysts) email list and many who write on the list give there email address
at investment banks & financial fund managers across the world, surely they
are not all in La La land.

I have however read several Buffett books, lovely theory, obviously not many
people follow his theories because people still buy stocks that he wouldnt
touch with a barge pole including the mysterious fund managers that Travis
is fond of quoting. How many people actually do you know as professional
investors follow his theory to the fullest (within practicalities) ?.

While I accept the names you do give Travis, to throw up some unnamed fund
manager who loathes TA is really not credible, particularly as your industry
has been severley exposed over recent years giving people extremely dubious
advice. In fact it has been so bad they have had a heck of a job convincing
government not to regulate. They looked good in a bull market.

 In my opinion,  local financial investment managers seemed to learn nothing
from the 87 crash, they just jumped on the US market when it started to roar
and said come on the party is over here, how many said to a client, heh the
market is over valued stay on the sidelines, not a one I bet, reason,
simple, no fee money from that is there.

While I have no axe to grind with you over your anti TA stance, personal
choice is your right, given the profession (would you call it a profession
?) you are in I think most poeple will take it with a grain of salt.

Regards

Morgy


Regards

Morgy






----- Original Message ----- 
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Monday, February 24, 2003 5:38 AM
Subject: Re: [sharechat] TLS Chart Update


> Hi Travis,
>
> >
> >Backtesting in such a way works no better than
> >backtesting a single indicator on the entire market.
> >Stocks do not have "personalities", although many
> >traders seem to think they do.
> >
> >News comes along essentially randomly.
> >
> >I say bah humbug to the all knowing insider.
> >
>
>
> Except when the insider is buying?
>
>
> >
> >The precision to which someone can measure psychology
> >in OHLCV data is only about as great as the precision
> >with which someone can measure the amount of
> >phlogiston in a piece of wood.  You can write the best
> >programs and use the best hardware but it is a doomed
> >enterprise.
> >
>
>
>
> Maybe, but I don't see anyone on this forum making the claim that
> they can program a computer to trade automatically.
>
> By the same token, I don't see any fundamental investor here claiming
> they can pick shares by using automated fundamental analysis.
>
>
>
> >
> >TA users don't often pay much attention to fundamental
> >information such as "news", they just read charts.
> >
> >
>
>
>
> Sure but Phaedrus claims he does use fundamental analysis as well.
>
> So saying that a trader who pays no attention to fundamental
> information is likely to be on the fast track to failure is probably
> something Phaedrus would agree with.
>
>
>
> >
> >>
> >>So what you are saying, Travis, is that successful
> >>traders are really successful risk managers.
> >>
> >
> > Yes.
> >
> > There are two aspects to trader money management and
> > as I said neither of them involve charts.
> >
> > Traders decide on the average amount per trade they
> > are going to commit, these methods include pyramiding
> > vs anti-pyramiding strategies where the trade size is
> > increased in line with equity increases or decreases,
> > or optimal f and secure f.  These methods are always
> > based on mathematical techniques and analysis of
> > trades.  No charting is involved.  This is often
> > referred to as "money management", though I prefer to
> > call it "trade sizing" because "money management" has
> > other meanings.
> >
> >
>
> I can't remember a single discussion on 'trade sizing' taking place
> on this forum.  Perhaps some successful traders out there would like
> to comment on this subject?.
>
> >
> >
> > The second aspect is the limitation of losses.  So
> > called "risk management".  These basically involve
> > stop losses of various sorts including fixed stops or
> > trailing stops.  Once again it has nothing to do with
> > technical analysis because it is based on your trade
> > equity, not the price of the stock.
> >
> >
>
> Please explain how you can 'fixed stop' or 'trailing stop' that is
> not based on the price of a stock.
>
>
> >
> >
> >Anyone is welcome to chip in with evidence that:
> >
> >TA systems work, including studies to support this
> >assertion or comprehensive backtesting studies that
> >work on valid out of sample data.
> >
> >That users of TA can outperform the market over the
> >long term and that successful users outnumber what one
> >might expect from completely random chance.
> >
> >That there exist successful TA users and that their
> >success comes from TA.
> >
> >Provide evidence for some or all of these and I'll
> >stop terrorising this group with all my horrible nasty
> >little facts.
> >
> >Note that you need to do better than just quoting some
> >article written by an internet pundit, I'm
> >specifically looking for credible information with a
> >degree of respectability and scientific repeatability.
> > I know there are many articles making claims about
> >TA, I don't need more claims I just want evidence.
> >
> >Once again, anyone is welcome to contribute here, not
> >just Snoopy.
> >
> >
>
> Yes I should probably take off my devil's advocate hat here and let
> the real traders take over the argument
>
> >
> >
> >If someone here has any credible
> >evidence whatsoever I'd love to hear it.  I'm sure you
> >all do because no rational thinking human being would
> >follow an investment strategy without first
> >determining whether or not it works, would they?
> >
> >
>
>
> Well, I'm not so sure.  Plenty of people buy any property because
> "property always goes up".   They still teach budding fund managers
> 'efficient market theory' at university.
>
> SNOOPY
>
>
>
>
>
>
>
>
> ---------------------------------
> Message sent by Snoopy
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "Dogs have big tongues, so you can bet they don't
> bite them by accident"
>
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