Does Any Technical Analysis Work? (Part 4)

One can do an internet search on “does technical analysis work” and find lots of discussion on the topic.

JA wrote:

     > …I know if someone discovers a profitable strategy he won’t share
     > it… I was asking about “public and very common strategies using
     > TA,” like RSI, Fibonacci etc, because if they work, why aren’t a
     > lot of bots out there making money really easy with that? And my
     > comment about people selling courses is because it confuses me
     > when I see people I trust telling me they use those techniques
     > with good results. How is that possible? Do you think they work?

CF responded:

     > ok dude. you know the “public and very common strategies like
     > RSI, Fibonacci etc.” Those are absolutely total trash. Like: a joke,
     > just a total joke. It’s quite confusing to me that you seem to be
     > saying “many people think those work…” If you ask 1000 working
     > daytraders… they will just smile. Those things are equivalent to
     > the “lose weight!” systems you see sold on informercials you know?
     >
     > With regard to people telling you they use those techniques with
     > good results, those people are: liars. Even if it’s your brother
     > or something, non-working traders often get really confused, sort
     > of exaggerating their own trade results for the better! [7]

Not to be lost on the humor (remember back to [6]! The internet parlance “ROFL” comes to mind right now) is this claim that the standard indicators commonly discussed as the basics of TA do not work.

AJ writes:

     > …any developer can program a bot to trade using TA… and there
     > are a lot of bots out there, and none of them are working. I did
     > a lot of backtesting myself using multiple strategies and none
     > of them work long term… do you really think there is some bot
     > out there that can make a good profit through automated trading
     > and is actually being sold?? Yeah sure, so I coded a bot to make
     > millions when I’m sleeping and I’m publishing it as open source
     > or selling it for $500. Just name ONE that makes guaranteed
     > profit. [8]

He absolutely may be right about this!

On another note, I’m not at all convinced that he knows “none of them are working.” I’m not convinced he’s ever purchased/leased a single bot to try for himself. I’m not convinced he has had real conversation with [credible] others who have. He may be one to spend lots of time in the forums and read what others (also potentially with limited experience like himself) have to say. Back from [7], does anybody know 1,000 working daytraders?” Lots of people say lots of things. We have to evaluate the source, too, and assess what we really don’t (and what they can’t) know.

Again, AJ makes some really good points to consider. As mentioned in the fifth paragraph here, I’ve just started testing multiple strategies over the long term. None have really worked thus far.

To be continued next time.