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Point & Figure charting is redundantly listed twice under the general heading "Charting Terms & Indicators." It is listed as both a "concept" as well as "type" of chart. Moreover, the abstract general idea or concept that is signified by the word "Point & Figure" must be, by definition of the word "concept," a collection of those characteristics which are common to all types of charts. It is quite proper to list Point & Figure as a "type" of chart. It is not proper and is in fact incorrect to label it as a "concept." Why are you disallowing this correction? —Preceding unsigned comment added by 99.10.168.190 ( talk) 15:47, 27 January 2010 (UTC)
For example, the abstract general idea or concept that is designated by the word "red" is that characteristic which is common to apples, cherries, and blood. The abstract general idea or concept that is signified by the word "dog" is the collection of those characteristics which are common to Airedales, Collies, and Chihuahuas.
The abstract general idea or concept that is signified by the word "point & figure" is the collection of those characteristics which are common to....??? —Preceding unsigned comment added by 99.10.168.190 ( talk) 15:54, 27 January 2010 (UTC)
John Murphy is not an Economist by trade. According to his bio, he is most well known as a technical analyst and book author. See: http://stockcharts.com/help/doku.php?id=support:about_john_murphy
However when I change the Wiki to reflect these facts, someone keeps changing it back. —Preceding unsigned comment added by 99.10.168.190 ( talk) 21:36, 25 January 2010 (UTC)
Whats the difference between Principles, Characteristics and General Description? We have three sections with virtually the same title. We need to combine and sort these out. Any suggestions?-- — Kbob • Talk • 21:35, 17 October 2009 (UTC)
(I last commented on this talk page on the same subject back in sept 2007. That comment is no longer visible, but the error still stands)
None of the quotes attributed to Warren Buffett are available from the link given as source - (Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."). A quick non-exhaustive search turns up one reference from the year 2000 to the librarians-quote, here, but I'm less sure of the tech analysis charts quote. A similar use of Google Timeline to find its first use results in a fool.com article from 2008, that is, after the quote appeared here.
Please comment below. Troed ( talk) 16:40, 28 December 2009 (UTC)
Though the external links section asks us not to include links in this article, I thought that the following links would provide useful contents with respect to Technical Analysis. Introduction to Technical Indicators and Oscillators on StockCharts.com I do not understand why links should not be added. I feel that links serve as verifiable references even though it has not been used for a reference to a particular instance of information. Diptanshu Talk 10:29, 7 January 2010 (UTC)
Ted, Drummond Geometry is known by very few people. The book you are referencing is only available through people, like you, who are selling the information and classes. Unless something has changed, the product is extremely expensive. Because Drummond is not available to the whole world, freely, and is not part of any TA Body of Knowledge, it really does not belong in this article. Sposer ( talk) 15:49, 13 January 2010 (UTC)
best regards Tedtick
Only mainstream indicators, tools and techniques that are widely used and widely available ought to be presented in a generalist TA article. Presenting odd or niche indicators, tools and techniques only serves to obfuscate when our goal ought to be to inform and enlighten. Hence, I agree with Dee Dee's deletions. TradingBands ( talk) 23:45, 3 September 2010 (UTC)
For NPOV's sake I removed some extremely strong statements added recently such as the following (emphasis added):
The random walk hypothesis - now refuted - may be derived from the weak-form efficient markets hypothesis
positively proving the random walk does not exist and never has. Several years passed before the acadmics finally and reluctantly admitted they were right.
It is patently obvious that prices mostly trend, which randomness would not support.
The random walk hypothesis article does not seem to support such bold claims (although it does discuss Lo's paper as evidence against RWH), so I toned them down in this article. Can anyone provide some enlightenment on whether the RWH has been conclusively disproven as the author ( User:JMcGoo I think) asserts? Destynova ( talk) 10:47, 12 October 2010 (UTC)
Actually, most of Magoo's points are correct, even if the volume was a bit high. Random walk has been disproved in dozens of papers and much of the edifice of Modern Portfolio Theory is crumbling under an onslaught of reality. However, the proof you seek comes not from papers, but from the massive exodus of Phds and academicians from the academy to Wall Street. Thus the very people who taught the theory now seek to take advantage of the consequences of the acceptance of their teachings by the masses. Really quite a fine game! TradingBands ( talk) 16:14, 19 October 2010 (UTC)
The cycles topic in the main article is most welcome and long overdue. Unfortunately, there is no matching Wiki article. Would someone please start one? TradingBands ( talk) 17:15, 5 November 2010 (UTC)
Not sure what to do about industry section. I added a reference from FINRA regarding MTA/CMT. Not sure what kind of articles exist.
For the history tends to repeat itself, that is common knowledge and is a sentence in almost every single book on the subject and there is no way it should be removed. The evidence/rule based work is covered in multiple of the referenced books (Aronson, Kaufman, Murphy). I do not have time to find exact page references. That statistical evidence section cites a paper, and academia is clearly more and more in line with the idea that TA is of value (and the market are neither random nor efficient). The use section refers to books written by the people that cover the topics and should not be removed. Sposer ( talk) 21:12, 24 February 2011 (UTC)
While its true an editor "may" remove unsourced content it is usually more appropriate to place a cite tag there and wait a few weeks to see if an editor can produce a source, meanwhile the tag alerts the reader that the text is not referenced and that it's accuracy may be in question. Regarding this specific instance, Sposer says it's a statement in almost every technical analysis book, so why not cite the text and end this discussion?-- — Keithbob • Talk • 18:03, 25 February 2011 (UTC)
The Jimbo "quote" above can be found in its entirety at WP:BOP:
-- CliffC ( talk) 20:54, 25 February 2011 (UTC)
This article doesn't seem to do justice to EMH or RWH. It doesn't at all mention the strong, semi-strong, or weak variants, and when claiming it has been shown to be false doesn't state which version was so shown. Also, it doesn't mention that Malkiel doesn't say that trends cannot sometimes be predicted. He says that given the costs of trading, the amount of prediction that can be made does not result in making more money than investing in an index. These costs are not just commissions, but bid/ask spread, market action, etc. None of this is mentioned in the article: the opposing positions need to be made more accurate and detailed. Yworo ( talk) 02:30, 1 March 2011 (UTC)
I am not sure on your background, but it seems to me you are all missing a point. TA rejects the EMH as one of its premisses. It does not concern itself with the strong\weak versions, or the Random Walk idea. The EMH is unproven. It is statistically supported (perhaps) but not proven. By contrast, the Euler identity is proven. You are not going to save or destroy TA on wikipedia, and the question of EMH is irrelevant. It is a point of fact that TA exists. It is point of fact that many people use it. It is a point of fact that many more people will turn to Wikipedia to find out introductory explanations about TA, about what it does, and if they are interested, which books to buy to find more info. In light of this, I think it is enough to say that TA does not accept the EMH as a premiss, as some stricter theories of FA do. It is a matter of opinion really, do you believe in the EMH or not. But matters of opinion should not be expressed in an article. Even if we feel the EMH is relevant, there should be an article on the EMH, with a disussion there. It is not a relevant part of TA, but a mere remark. The page should be written better, with a crossreference on the EMH, not a discussion about it being proved or disproved on the main article page on TA. Sandro Skansi 14:40, 9 April 2011 (UTC) — Preceding unsigned comment added by Horao ( talk • contribs)
Can this statement be clarified? I've read it several times and don't understand. What is the being referred to by 'index composite others' or between 'Han Seng index' and 'index'?
"Recently, Kim Man Lui, Lun Hu, and Keith C.C. Chan have suggested that there is statistical evidence of association relationships between some of the index composite stocks whereas there is no evidence for such a relationship between some index composite others. They show that the price behavior of these Hang Seng index composite stocks is easier to understand than that of the index.[24]" -- Golden Eternity ( talk) 20:35, 4 May 2011 (UTC)
Four years later and it is still word salad. — Preceding unsigned comment added by 123.211.71.34 ( talk) 23:07, 17 January 2015 (UTC)
I propose removing the npov tag from the head of the article as opposing/contrasting points of view are well represented throughout the article. This may have been a problem at one time, but it is clearly no longer one. I will wait for a week to allow for discussion. TradingBands ( talk) 16:54, 3 August 2011 (UTC)
I propose taking down the intro too short notice. At this stage the intro actually seems quite adequate. I'll wait a week before taking action to allow discussion. TradingBands ( talk) 15:11, 12 August 2011 (UTC)
The second line of Intro says " Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands in contradiction to much of modern portfolio theory."
Behavioral Economics DOES NOT "incorporate" technical analysis. Also, SOME quantitative models use technical analysis, but the introduction makes it sound like ALL quantitative models use technical analysis. Also, what does active management have to do with MPT? It is EMH that says active management is not possible (as captured in the third line). I am taking out that second line.
Here is the low down on Behavioral Economics:
(1) According to the book "Advances in Behavioral Economics":
So, please understand how behavioral economics fits into economics.
(2) In the world of mathematical modeling, the approach followed by technical analysis falls under the category of Empirical Modeling. There is nothing wrong in using empirical models to predict future outcomes (and I am not interested in a debate of whether empirical modeling is the correct way to predict future stock prices -- To Each His Own!). Models incorporating behavioral economics tend to fall under the category of explicative or simulation modeling. Yes, volume and price generated from the markets are used -- not as inputs to the model, but to validate the model. The use of market generated volume and price in such manner does not make it technical analysis (if it does, then the sections "Description" and "Principles" in the the article are invalid). In other words, models based on behavioral economics try to EXPLAIN a market phenomenon and use market generated information to VERIFY the validity of the model. In comparison, technical analysis DOES NOT explain anything but tries to predict future outcomes. — Preceding unsigned comment added by 59.161.191.227 ( talk) 20:39, 19 November 2011 (UTC)
[ I have removed this outlandish and irrelevant statement. Even if it is true, it should not be there, but I agree it is factually highly questionable. Incidentally, this whole article reads like a defense of the methodology and an attempt to jsutify it, as opposed to a dispassionate statement of what it is. Nexus501 ( talk) 04:13, 17 February 2012 (UTC) ]
References
I don't know where to start. They are completely incoherent. What is going on here??? 76.191.143.69 ( talk) 04:08, 2 September 2012 (UTC)
This article is a god-awful mess. The lede is utterly incomprehensible, and violates pretty well every requirement of Wikipedia:Manual of Style/Lead section. The remainder of the article is almost as bad - scattered with poor grammar, jargon, non-sequiteurs and bizarre statements (e.g. "Technical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat) or some combination". What else could a price do? Perform handstands while whistling Colonel Bogey?). I have to conclude that either (a) there is no subject here worthy of an encyclopaedic article, or (b) there is one, but those interested in the subject would prefer that the article be as obscure as possible in order to hide what appears on the surface at least to be self-evident - which is that "technical analysis" is pseudoscientific hocus-pocus if it is anything at all. I suggest that those responsible for this heap of unintelligible gloop do something about it - and soon. AndyTheGrump ( talk) 03:27, 3 September 2012 (UTC)
Qoute: "it is still considered by many academics to be pseudoscience". Are there any academics who consider 'technical analysis' to be something other than pseudoscience? What is the balance of opinion amongst those acedemics who are qualified to make such a judgement, and have done so? Simply leaving a statement like that hanging is untenable. If the only academics who have expressed an opinion on the subject do indeed consider the subject to be pseudoscience, Wikipedia:Fringe theories guidelines apply: "When discussing topics that reliable sources say are pseudoscientific or fringe theories, editors should be careful not to present the pseudoscientific fringe views alongside the scientific or academic consensus as though they are opposing but still equal views. While pseudoscience may in some cases be significant to an article, it should not obfuscate the description or prominence of the mainstream views". As to where on the spectrum between 'Obvious pseudoscience', 'Generally considered pseudoscience' and 'Questionable science' (as discussed in the guidelines) the topic falls, it is difficult to say without further evidence. However, since the article states that some academics at least consider the subject pseudoscience, there can be no reasonable doubt that Wikipedia:Fringe theories guidelines need to be taken into account - which this article singularly fails to do. I would remind contributors that there have been several arbitration cases relating to fringe topics over the years, and such matters are taken seriously by the community. As with all the other issues raised in the section above, this clearly needs prompt attention. AndyTheGrump ( talk) 13:28, 3 September 2012 (UTC)
If this article is to make claims asserting scientific credibility for Technical Analysis, it will need to cite sources which back this up. Neither blogs, [3] nor 'Journals' produced by consulting firms [4] are likely to meet the standards required, per WP:RS policy. AndyTheGrump ( talk) 02:38, 4 September 2012 (UTC)
User:Sposer just restored a sentence to the lede: " Behavioral economics and quantitative analysis use many of the same tools of technical analysis". I had removed this sentence in its previous form (" Behavioral economics and quantitative analysis build on and incorporate many of the same tools of technical analysis") because the sources given do not support that assertion and because, well, because it's simply false (Behavioral economies most certainly does not "incorporate" or "build on" technical analysis, perhaps vice versa).
Sposer's edit summary was: Given that sources almost exactly stated what was in sentence, reverting. Will soften text momentarily however.. This isn't true (and it would be weird if four different sources stated exactly that). And in fact, the sources do not even support the milder wording.
One by one:
Seeking Alpha - first, this is a blog more or less so doesn't meet WP:RS. Still, the word "behavioral" does not appear in the article (only in comments) hence the assertion that behavioral economics uses many of the same tools as technical analysis is NOT supported by this source. The word "quantitative" occurs once in the article, basically saying that "quantitative strategies" involve looking at past trends. It doesn't say anything about quantitative analysis building on the tools of technical analysis. Hence this source does not support the sentence at all, even if we do ignore reliability issues.
Mizrach and Weerts - this appears to be a working paper which runs into WP:RS issues. And also again, the source simply does not support the sentence. Yes, it does talk (and define) what behavioral economics is, and it does talk (and more or less define) what technical analysis is but nowhere does it state that one builds upon or incorporate the other. If I'm missing where it is supposed to do that please provide a quote and page number.
Capco - again I'm not 100% sure that this can be considered a reliable source, though it does have some academics on its editorial board. Anyway, once more, the article talks about "behavioral finance", it talks about "technical analysis" but it does not say that one builds upon or incorporates the other. If I'm missing where it is supposed to do that please provide a quote and page number.
The last source [5] is a book and judging by the title maybe it does support the claim. However, without a page number it's impossible to verify and I'm not going to read the whole thing. The burden of proof is on the person inserting the text to provide the page number.
There are some additional problems here.
First, there is a bit of a definition confusion in regard to the word "quantitative" can mean pretty much anything involving numbers, as the wlink to quantitative analyst indicates. In fact these terms can be equivocated and using "quantitative" does not add to the article.
Second, and more importantly, even if you can find a source or two which makes the claim above that does not imply that this view is well established. Essentially, while some technical analysts may believe that the behavioral economics are building upon their work, they're not. Even the converse statement - that technical analysts are building upon the work of behavioral economists is not really true. Basically, behavioral economists for the most part regard technical analysis as the same kind of mumbo-jumbo that the more traditional "efficient market hypothesis" see it as (in fact Becon is not necessarily conflict with some forms of EMH). The sentence which is being included is a very strong (and essentially false) claim and hence really needs some very high quality sources to back it up. Right now it has no sources which really back it up. VolunteerMarek 05:45, 4 September 2012 (UTC)
a lack of quantification though they use certain statistical terms such as moving averages or ratios. To justify some of these approaches psychologists have joined the foray and tried to provide an explanation for the way market behaves using psychology. Figure 1 is a cognitive psychology explanation of oscillation of prices that fall into a rising or falling band called a “channel.” The Seeking Alpha story title: "Beating the Quants at Their Own Game" relates how both quants and technical analysts both use moving averages for investing/rich/cheap decisions: "Many quantitative investment strategies are based on some sort of trend following - very simply put they buy an uptrend and sell a downtrend. The “trend” is typically determined by a moving average. For the sake of this analysis I will be dealing with simple moving averages as opposed to exponential moving averages due to the fact that I was not prepared to spend my whole weekend creating the necessary calculations in Excel. The general take-away of this exercise will be the same for either. A simple moving average is the average price of the last “X” number of days. Popular moving averages used in technical analysis are the 50 day, 100 day, and 200 day. A technical investor wants a signal that is clear enough that they will not miss a big portion of the price move but also slow enough that they will not get whipsawed around from trading “noise”." The SSRN article points out that behavioral researchers and technical analysts focus on high and low prices: "Psychological, behavioral, survey and experimental evidence appears to support our choice of simple, widely reported, and graphically oriented rules like the n-day high and low." Graphically = Technical = Chartist. I am honestly confused what you are missing? I very much watered down the lede, and did not put it as same building blocks, although that is arguable, and rather said they use the same tools/indicators, as clearly stated with three different examples (highs and lows, moving averages, channels) in three cites. Sposer ( talk) 03:07, 7 September 2012 (UTC)
The text was not removed due to the content. It was due to the fact that nobody has any idea what you are trying to say. I read the text multiple times. I am a former technical analyst and a former quant, and I have no idea what you are trying to get across. There were some things in there that I think are points I've been trying to get across as well, but I am not even sure. As far as forecasting, I am not sure what you are getting at. However, TA most definitely attempts to model expectations for future prices or trends, and some types of TA absolutely do attempt to forecast and time future prices and price turns. If you are trying to say that is not possible, you are not alone, but that was not clear either. If you are saying TA does not attempt to do that, you are incorrect. Sposer ( talk) 19:45, 10 September 2012 (UTC)
is that:
More than 3 months have passed, more than enough time to both evaluate necessary changes as its bibliography, so I put down my amendment about the definition of the term:
"Technical Analysis is a heuristic tool used by both professional as amateurs traders for acting over price movements of some financial instruments, with the purpose of profit by buying or selling them, trying identify best possible points for entry or exit in a trade.[1][2]
It is also interpreted both as a form of opinion research, [3] where the trend lines and other visual or statistical patterns are perceived as "photos" of the behavior of most market participants at any given time; [4] as well as a form of probability analysis based on the idea that prices, since they are reflections of cognitive biases of the crowds, would move according to recurrent and identifiable patterns.[5]
And that although it is impossible to forecast when and to what degree these patterns will recur in the future (due to the fact that financial markets are social environments), as well as be impossible in the moments which negotiations are occuring distinguish real signs of such patterns from false alarms,[6] is fairly possible to traders take advantage of this heuristic tool, provided One knows its limitations added to a rigid risk control.[7]"
Numbers in brackets indicate references (one or two at each point) to be added.
I'm open to suggestions, reminding that the biased character of the supposedly predictive characteristic of this tool, will begin to be corrected in its definition section, but should be extended to the whole article to avoid the current tendentious aspect of this article.
189.121.168.62 (
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The Technical analysis software article was recently trimmed down, removing some spammy links. See activity at WP:COIN It's now so short it could just be a paragraph here. Any objections to merging? John Nagle ( talk) 05:27, 12 August 2017 (UTC)
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Tyler wood ( talk) 13:38, 16 August 2017 (UTC)
This article is clearly biased. The introduction has a single sentence concerning what technical analysis is actually about, and then three sentences concerning objecting and competing methods. Furthermore, these other methods are presented as being more factual or reliable, despite the fact that the efficient-market hypothesis and active management theory are both unproven. I don't understand why there is such a concerted push to give this article a negative slant considering that trading would essentially be impossible without technical analysis, and it influences every single market considering that most price-action these days is driven by bots which act almost entirely upon TA signals. High-frequency trading, which makes the majority of trading volume in the US stock market and certainly in the crypto market, is entirely driven by TA.
The claim that TA is 'pseudoscience' is written by someone who lost a large amount of money in the dot-com bubble and according to this talk page has been up for, what, a decade now, and nobody is allowed to alter or remove it? Or even give it some context, or perhaps a differing perspective? In the introduction for the topic!? The defining aspect anyone who reads this article will be the implication that this is pseudoscience and therefore nonsense, and this all hangs upon one book written by somebody who is clearly going to be personally biased against the concept of trading itself.
I have tried to give that quote some further context considering that studies done on TA have been done in the abstract and do not actually reflect applied circumstances but it has been reverted twice. TA in the real world is not done in isolation, as the studies are conducted, but TA signals are used in conjunction with one another to construct a heuristic understanding of -price action-, which traders, and bots, then act upon if the risk to reward ratio is favourable. You cannot gain an accurate understanding of TA by running statistical analyses on individual signals without any context for how entities act upon those signals and then conclude that the method is nonsense. This article's introduction, the thing most people will read when looking up TA for the first time, is terribly biased and needs to be reconsidered. It should be rewritten with an emphasis on what TA actually is and how it is applied in markets rather than a emphasis on how other theories disagree with it. Hueycookafew ( talk) 09:37, 23 July 2021 (UTC)
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Point & Figure charting is redundantly listed twice under the general heading "Charting Terms & Indicators." It is listed as both a "concept" as well as "type" of chart. Moreover, the abstract general idea or concept that is signified by the word "Point & Figure" must be, by definition of the word "concept," a collection of those characteristics which are common to all types of charts. It is quite proper to list Point & Figure as a "type" of chart. It is not proper and is in fact incorrect to label it as a "concept." Why are you disallowing this correction? —Preceding unsigned comment added by 99.10.168.190 ( talk) 15:47, 27 January 2010 (UTC)
For example, the abstract general idea or concept that is designated by the word "red" is that characteristic which is common to apples, cherries, and blood. The abstract general idea or concept that is signified by the word "dog" is the collection of those characteristics which are common to Airedales, Collies, and Chihuahuas.
The abstract general idea or concept that is signified by the word "point & figure" is the collection of those characteristics which are common to....??? —Preceding unsigned comment added by 99.10.168.190 ( talk) 15:54, 27 January 2010 (UTC)
John Murphy is not an Economist by trade. According to his bio, he is most well known as a technical analyst and book author. See: http://stockcharts.com/help/doku.php?id=support:about_john_murphy
However when I change the Wiki to reflect these facts, someone keeps changing it back. —Preceding unsigned comment added by 99.10.168.190 ( talk) 21:36, 25 January 2010 (UTC)
Whats the difference between Principles, Characteristics and General Description? We have three sections with virtually the same title. We need to combine and sort these out. Any suggestions?-- — Kbob • Talk • 21:35, 17 October 2009 (UTC)
(I last commented on this talk page on the same subject back in sept 2007. That comment is no longer visible, but the error still stands)
None of the quotes attributed to Warren Buffett are available from the link given as source - (Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."). A quick non-exhaustive search turns up one reference from the year 2000 to the librarians-quote, here, but I'm less sure of the tech analysis charts quote. A similar use of Google Timeline to find its first use results in a fool.com article from 2008, that is, after the quote appeared here.
Please comment below. Troed ( talk) 16:40, 28 December 2009 (UTC)
Though the external links section asks us not to include links in this article, I thought that the following links would provide useful contents with respect to Technical Analysis. Introduction to Technical Indicators and Oscillators on StockCharts.com I do not understand why links should not be added. I feel that links serve as verifiable references even though it has not been used for a reference to a particular instance of information. Diptanshu Talk 10:29, 7 January 2010 (UTC)
Ted, Drummond Geometry is known by very few people. The book you are referencing is only available through people, like you, who are selling the information and classes. Unless something has changed, the product is extremely expensive. Because Drummond is not available to the whole world, freely, and is not part of any TA Body of Knowledge, it really does not belong in this article. Sposer ( talk) 15:49, 13 January 2010 (UTC)
best regards Tedtick
Only mainstream indicators, tools and techniques that are widely used and widely available ought to be presented in a generalist TA article. Presenting odd or niche indicators, tools and techniques only serves to obfuscate when our goal ought to be to inform and enlighten. Hence, I agree with Dee Dee's deletions. TradingBands ( talk) 23:45, 3 September 2010 (UTC)
For NPOV's sake I removed some extremely strong statements added recently such as the following (emphasis added):
The random walk hypothesis - now refuted - may be derived from the weak-form efficient markets hypothesis
positively proving the random walk does not exist and never has. Several years passed before the acadmics finally and reluctantly admitted they were right.
It is patently obvious that prices mostly trend, which randomness would not support.
The random walk hypothesis article does not seem to support such bold claims (although it does discuss Lo's paper as evidence against RWH), so I toned them down in this article. Can anyone provide some enlightenment on whether the RWH has been conclusively disproven as the author ( User:JMcGoo I think) asserts? Destynova ( talk) 10:47, 12 October 2010 (UTC)
Actually, most of Magoo's points are correct, even if the volume was a bit high. Random walk has been disproved in dozens of papers and much of the edifice of Modern Portfolio Theory is crumbling under an onslaught of reality. However, the proof you seek comes not from papers, but from the massive exodus of Phds and academicians from the academy to Wall Street. Thus the very people who taught the theory now seek to take advantage of the consequences of the acceptance of their teachings by the masses. Really quite a fine game! TradingBands ( talk) 16:14, 19 October 2010 (UTC)
The cycles topic in the main article is most welcome and long overdue. Unfortunately, there is no matching Wiki article. Would someone please start one? TradingBands ( talk) 17:15, 5 November 2010 (UTC)
Not sure what to do about industry section. I added a reference from FINRA regarding MTA/CMT. Not sure what kind of articles exist.
For the history tends to repeat itself, that is common knowledge and is a sentence in almost every single book on the subject and there is no way it should be removed. The evidence/rule based work is covered in multiple of the referenced books (Aronson, Kaufman, Murphy). I do not have time to find exact page references. That statistical evidence section cites a paper, and academia is clearly more and more in line with the idea that TA is of value (and the market are neither random nor efficient). The use section refers to books written by the people that cover the topics and should not be removed. Sposer ( talk) 21:12, 24 February 2011 (UTC)
While its true an editor "may" remove unsourced content it is usually more appropriate to place a cite tag there and wait a few weeks to see if an editor can produce a source, meanwhile the tag alerts the reader that the text is not referenced and that it's accuracy may be in question. Regarding this specific instance, Sposer says it's a statement in almost every technical analysis book, so why not cite the text and end this discussion?-- — Keithbob • Talk • 18:03, 25 February 2011 (UTC)
The Jimbo "quote" above can be found in its entirety at WP:BOP:
-- CliffC ( talk) 20:54, 25 February 2011 (UTC)
This article doesn't seem to do justice to EMH or RWH. It doesn't at all mention the strong, semi-strong, or weak variants, and when claiming it has been shown to be false doesn't state which version was so shown. Also, it doesn't mention that Malkiel doesn't say that trends cannot sometimes be predicted. He says that given the costs of trading, the amount of prediction that can be made does not result in making more money than investing in an index. These costs are not just commissions, but bid/ask spread, market action, etc. None of this is mentioned in the article: the opposing positions need to be made more accurate and detailed. Yworo ( talk) 02:30, 1 March 2011 (UTC)
I am not sure on your background, but it seems to me you are all missing a point. TA rejects the EMH as one of its premisses. It does not concern itself with the strong\weak versions, or the Random Walk idea. The EMH is unproven. It is statistically supported (perhaps) but not proven. By contrast, the Euler identity is proven. You are not going to save or destroy TA on wikipedia, and the question of EMH is irrelevant. It is a point of fact that TA exists. It is point of fact that many people use it. It is a point of fact that many more people will turn to Wikipedia to find out introductory explanations about TA, about what it does, and if they are interested, which books to buy to find more info. In light of this, I think it is enough to say that TA does not accept the EMH as a premiss, as some stricter theories of FA do. It is a matter of opinion really, do you believe in the EMH or not. But matters of opinion should not be expressed in an article. Even if we feel the EMH is relevant, there should be an article on the EMH, with a disussion there. It is not a relevant part of TA, but a mere remark. The page should be written better, with a crossreference on the EMH, not a discussion about it being proved or disproved on the main article page on TA. Sandro Skansi 14:40, 9 April 2011 (UTC) — Preceding unsigned comment added by Horao ( talk • contribs)
Can this statement be clarified? I've read it several times and don't understand. What is the being referred to by 'index composite others' or between 'Han Seng index' and 'index'?
"Recently, Kim Man Lui, Lun Hu, and Keith C.C. Chan have suggested that there is statistical evidence of association relationships between some of the index composite stocks whereas there is no evidence for such a relationship between some index composite others. They show that the price behavior of these Hang Seng index composite stocks is easier to understand than that of the index.[24]" -- Golden Eternity ( talk) 20:35, 4 May 2011 (UTC)
Four years later and it is still word salad. — Preceding unsigned comment added by 123.211.71.34 ( talk) 23:07, 17 January 2015 (UTC)
I propose removing the npov tag from the head of the article as opposing/contrasting points of view are well represented throughout the article. This may have been a problem at one time, but it is clearly no longer one. I will wait for a week to allow for discussion. TradingBands ( talk) 16:54, 3 August 2011 (UTC)
I propose taking down the intro too short notice. At this stage the intro actually seems quite adequate. I'll wait a week before taking action to allow discussion. TradingBands ( talk) 15:11, 12 August 2011 (UTC)
The second line of Intro says " Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands in contradiction to much of modern portfolio theory."
Behavioral Economics DOES NOT "incorporate" technical analysis. Also, SOME quantitative models use technical analysis, but the introduction makes it sound like ALL quantitative models use technical analysis. Also, what does active management have to do with MPT? It is EMH that says active management is not possible (as captured in the third line). I am taking out that second line.
Here is the low down on Behavioral Economics:
(1) According to the book "Advances in Behavioral Economics":
So, please understand how behavioral economics fits into economics.
(2) In the world of mathematical modeling, the approach followed by technical analysis falls under the category of Empirical Modeling. There is nothing wrong in using empirical models to predict future outcomes (and I am not interested in a debate of whether empirical modeling is the correct way to predict future stock prices -- To Each His Own!). Models incorporating behavioral economics tend to fall under the category of explicative or simulation modeling. Yes, volume and price generated from the markets are used -- not as inputs to the model, but to validate the model. The use of market generated volume and price in such manner does not make it technical analysis (if it does, then the sections "Description" and "Principles" in the the article are invalid). In other words, models based on behavioral economics try to EXPLAIN a market phenomenon and use market generated information to VERIFY the validity of the model. In comparison, technical analysis DOES NOT explain anything but tries to predict future outcomes. — Preceding unsigned comment added by 59.161.191.227 ( talk) 20:39, 19 November 2011 (UTC)
[ I have removed this outlandish and irrelevant statement. Even if it is true, it should not be there, but I agree it is factually highly questionable. Incidentally, this whole article reads like a defense of the methodology and an attempt to jsutify it, as opposed to a dispassionate statement of what it is. Nexus501 ( talk) 04:13, 17 February 2012 (UTC) ]
References
I don't know where to start. They are completely incoherent. What is going on here??? 76.191.143.69 ( talk) 04:08, 2 September 2012 (UTC)
This article is a god-awful mess. The lede is utterly incomprehensible, and violates pretty well every requirement of Wikipedia:Manual of Style/Lead section. The remainder of the article is almost as bad - scattered with poor grammar, jargon, non-sequiteurs and bizarre statements (e.g. "Technical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat) or some combination". What else could a price do? Perform handstands while whistling Colonel Bogey?). I have to conclude that either (a) there is no subject here worthy of an encyclopaedic article, or (b) there is one, but those interested in the subject would prefer that the article be as obscure as possible in order to hide what appears on the surface at least to be self-evident - which is that "technical analysis" is pseudoscientific hocus-pocus if it is anything at all. I suggest that those responsible for this heap of unintelligible gloop do something about it - and soon. AndyTheGrump ( talk) 03:27, 3 September 2012 (UTC)
Qoute: "it is still considered by many academics to be pseudoscience". Are there any academics who consider 'technical analysis' to be something other than pseudoscience? What is the balance of opinion amongst those acedemics who are qualified to make such a judgement, and have done so? Simply leaving a statement like that hanging is untenable. If the only academics who have expressed an opinion on the subject do indeed consider the subject to be pseudoscience, Wikipedia:Fringe theories guidelines apply: "When discussing topics that reliable sources say are pseudoscientific or fringe theories, editors should be careful not to present the pseudoscientific fringe views alongside the scientific or academic consensus as though they are opposing but still equal views. While pseudoscience may in some cases be significant to an article, it should not obfuscate the description or prominence of the mainstream views". As to where on the spectrum between 'Obvious pseudoscience', 'Generally considered pseudoscience' and 'Questionable science' (as discussed in the guidelines) the topic falls, it is difficult to say without further evidence. However, since the article states that some academics at least consider the subject pseudoscience, there can be no reasonable doubt that Wikipedia:Fringe theories guidelines need to be taken into account - which this article singularly fails to do. I would remind contributors that there have been several arbitration cases relating to fringe topics over the years, and such matters are taken seriously by the community. As with all the other issues raised in the section above, this clearly needs prompt attention. AndyTheGrump ( talk) 13:28, 3 September 2012 (UTC)
If this article is to make claims asserting scientific credibility for Technical Analysis, it will need to cite sources which back this up. Neither blogs, [3] nor 'Journals' produced by consulting firms [4] are likely to meet the standards required, per WP:RS policy. AndyTheGrump ( talk) 02:38, 4 September 2012 (UTC)
User:Sposer just restored a sentence to the lede: " Behavioral economics and quantitative analysis use many of the same tools of technical analysis". I had removed this sentence in its previous form (" Behavioral economics and quantitative analysis build on and incorporate many of the same tools of technical analysis") because the sources given do not support that assertion and because, well, because it's simply false (Behavioral economies most certainly does not "incorporate" or "build on" technical analysis, perhaps vice versa).
Sposer's edit summary was: Given that sources almost exactly stated what was in sentence, reverting. Will soften text momentarily however.. This isn't true (and it would be weird if four different sources stated exactly that). And in fact, the sources do not even support the milder wording.
One by one:
Seeking Alpha - first, this is a blog more or less so doesn't meet WP:RS. Still, the word "behavioral" does not appear in the article (only in comments) hence the assertion that behavioral economics uses many of the same tools as technical analysis is NOT supported by this source. The word "quantitative" occurs once in the article, basically saying that "quantitative strategies" involve looking at past trends. It doesn't say anything about quantitative analysis building on the tools of technical analysis. Hence this source does not support the sentence at all, even if we do ignore reliability issues.
Mizrach and Weerts - this appears to be a working paper which runs into WP:RS issues. And also again, the source simply does not support the sentence. Yes, it does talk (and define) what behavioral economics is, and it does talk (and more or less define) what technical analysis is but nowhere does it state that one builds upon or incorporate the other. If I'm missing where it is supposed to do that please provide a quote and page number.
Capco - again I'm not 100% sure that this can be considered a reliable source, though it does have some academics on its editorial board. Anyway, once more, the article talks about "behavioral finance", it talks about "technical analysis" but it does not say that one builds upon or incorporates the other. If I'm missing where it is supposed to do that please provide a quote and page number.
The last source [5] is a book and judging by the title maybe it does support the claim. However, without a page number it's impossible to verify and I'm not going to read the whole thing. The burden of proof is on the person inserting the text to provide the page number.
There are some additional problems here.
First, there is a bit of a definition confusion in regard to the word "quantitative" can mean pretty much anything involving numbers, as the wlink to quantitative analyst indicates. In fact these terms can be equivocated and using "quantitative" does not add to the article.
Second, and more importantly, even if you can find a source or two which makes the claim above that does not imply that this view is well established. Essentially, while some technical analysts may believe that the behavioral economics are building upon their work, they're not. Even the converse statement - that technical analysts are building upon the work of behavioral economists is not really true. Basically, behavioral economists for the most part regard technical analysis as the same kind of mumbo-jumbo that the more traditional "efficient market hypothesis" see it as (in fact Becon is not necessarily conflict with some forms of EMH). The sentence which is being included is a very strong (and essentially false) claim and hence really needs some very high quality sources to back it up. Right now it has no sources which really back it up. VolunteerMarek 05:45, 4 September 2012 (UTC)
a lack of quantification though they use certain statistical terms such as moving averages or ratios. To justify some of these approaches psychologists have joined the foray and tried to provide an explanation for the way market behaves using psychology. Figure 1 is a cognitive psychology explanation of oscillation of prices that fall into a rising or falling band called a “channel.” The Seeking Alpha story title: "Beating the Quants at Their Own Game" relates how both quants and technical analysts both use moving averages for investing/rich/cheap decisions: "Many quantitative investment strategies are based on some sort of trend following - very simply put they buy an uptrend and sell a downtrend. The “trend” is typically determined by a moving average. For the sake of this analysis I will be dealing with simple moving averages as opposed to exponential moving averages due to the fact that I was not prepared to spend my whole weekend creating the necessary calculations in Excel. The general take-away of this exercise will be the same for either. A simple moving average is the average price of the last “X” number of days. Popular moving averages used in technical analysis are the 50 day, 100 day, and 200 day. A technical investor wants a signal that is clear enough that they will not miss a big portion of the price move but also slow enough that they will not get whipsawed around from trading “noise”." The SSRN article points out that behavioral researchers and technical analysts focus on high and low prices: "Psychological, behavioral, survey and experimental evidence appears to support our choice of simple, widely reported, and graphically oriented rules like the n-day high and low." Graphically = Technical = Chartist. I am honestly confused what you are missing? I very much watered down the lede, and did not put it as same building blocks, although that is arguable, and rather said they use the same tools/indicators, as clearly stated with three different examples (highs and lows, moving averages, channels) in three cites. Sposer ( talk) 03:07, 7 September 2012 (UTC)
The text was not removed due to the content. It was due to the fact that nobody has any idea what you are trying to say. I read the text multiple times. I am a former technical analyst and a former quant, and I have no idea what you are trying to get across. There were some things in there that I think are points I've been trying to get across as well, but I am not even sure. As far as forecasting, I am not sure what you are getting at. However, TA most definitely attempts to model expectations for future prices or trends, and some types of TA absolutely do attempt to forecast and time future prices and price turns. If you are trying to say that is not possible, you are not alone, but that was not clear either. If you are saying TA does not attempt to do that, you are incorrect. Sposer ( talk) 19:45, 10 September 2012 (UTC)
is that:
More than 3 months have passed, more than enough time to both evaluate necessary changes as its bibliography, so I put down my amendment about the definition of the term:
"Technical Analysis is a heuristic tool used by both professional as amateurs traders for acting over price movements of some financial instruments, with the purpose of profit by buying or selling them, trying identify best possible points for entry or exit in a trade.[1][2]
It is also interpreted both as a form of opinion research, [3] where the trend lines and other visual or statistical patterns are perceived as "photos" of the behavior of most market participants at any given time; [4] as well as a form of probability analysis based on the idea that prices, since they are reflections of cognitive biases of the crowds, would move according to recurrent and identifiable patterns.[5]
And that although it is impossible to forecast when and to what degree these patterns will recur in the future (due to the fact that financial markets are social environments), as well as be impossible in the moments which negotiations are occuring distinguish real signs of such patterns from false alarms,[6] is fairly possible to traders take advantage of this heuristic tool, provided One knows its limitations added to a rigid risk control.[7]"
Numbers in brackets indicate references (one or two at each point) to be added.
I'm open to suggestions, reminding that the biased character of the supposedly predictive characteristic of this tool, will begin to be corrected in its definition section, but should be extended to the whole article to avoid the current tendentious aspect of this article.
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The Technical analysis software article was recently trimmed down, removing some spammy links. See activity at WP:COIN It's now so short it could just be a paragraph here. Any objections to merging? John Nagle ( talk) 05:27, 12 August 2017 (UTC)
This edit request by an editor with a conflict of interest has now been answered. |
Here are some proposed minor edits for this page:
Tyler wood ( talk) 13:38, 16 August 2017 (UTC)
This article is clearly biased. The introduction has a single sentence concerning what technical analysis is actually about, and then three sentences concerning objecting and competing methods. Furthermore, these other methods are presented as being more factual or reliable, despite the fact that the efficient-market hypothesis and active management theory are both unproven. I don't understand why there is such a concerted push to give this article a negative slant considering that trading would essentially be impossible without technical analysis, and it influences every single market considering that most price-action these days is driven by bots which act almost entirely upon TA signals. High-frequency trading, which makes the majority of trading volume in the US stock market and certainly in the crypto market, is entirely driven by TA.
The claim that TA is 'pseudoscience' is written by someone who lost a large amount of money in the dot-com bubble and according to this talk page has been up for, what, a decade now, and nobody is allowed to alter or remove it? Or even give it some context, or perhaps a differing perspective? In the introduction for the topic!? The defining aspect anyone who reads this article will be the implication that this is pseudoscience and therefore nonsense, and this all hangs upon one book written by somebody who is clearly going to be personally biased against the concept of trading itself.
I have tried to give that quote some further context considering that studies done on TA have been done in the abstract and do not actually reflect applied circumstances but it has been reverted twice. TA in the real world is not done in isolation, as the studies are conducted, but TA signals are used in conjunction with one another to construct a heuristic understanding of -price action-, which traders, and bots, then act upon if the risk to reward ratio is favourable. You cannot gain an accurate understanding of TA by running statistical analyses on individual signals without any context for how entities act upon those signals and then conclude that the method is nonsense. This article's introduction, the thing most people will read when looking up TA for the first time, is terribly biased and needs to be reconsidered. It should be rewritten with an emphasis on what TA actually is and how it is applied in markets rather than a emphasis on how other theories disagree with it. Hueycookafew ( talk) 09:37, 23 July 2021 (UTC)