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T/A Absolutely Works!

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 Thomas Kee, President & CEO of Stock Traders Daily

 Tuesday, December 22, 2015

The backbone of everything I have been doing for the past 16 years is technical and algorithmic. That focus has allowed us to thrive during the Internet debacle, and the credit crisis, and during the good times as well. The notion that technical analysis does not work, as that was proposed in a recent discussion in this group, is not something that I can embrace. Technical analysis absolutely works, but it is not perfect. The author suggested that as it began to work a decision to leverage up was made, and then something happened adversely. The leveraging up may actually may the problem. Leveraging up is akin to being greedy. That emotion has no place in this business, and technical analysis is explicit. Example: if support breaks get out! Many people are not as disciplined as that, but there is another approach. We can use T/A to give us an understanding of underlying market sentiment, instead of a specific buy-sell trigger. The process is simple. I have identified 139 stocks that I have come to know as being largely representative of the underlying sentiment in the markets, and every day I categorize them based on algorithms into either weak, neutral, or strong on a near term, midterm, and longer term basis. That identifies near-term overbought or oversold conditions, which in turn offer us the opportunities to trade contrary to the market's direction with high degrees of probable accuracy. Look at the Results of the Sentiment Table Strategy: +70% YTD, 20 Trades, 68% of the time in cash. That would be possible without T/A. T/A has been the backbone of what I have done since essentially the onset of online trading, it is what helped us stand out during market crashes, and although the process requires a little more work, the beauty is that it can be used no matter what conditions surface, but you can't be greedy, you can't over leverage yourself, and when technical signals to exit your trade surface you must respect them.


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17 comments on article "T/A Absolutely Works!"

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 Сергей О., Специалист – Упаковочная промышленность

 Wednesday, December 23, 2015



Я очень люблю смотреть на море. Оно очень разное бывает тихое и спокойное , как во флэте. А иногда волны достигают громадной величины, но есть признаки когда будет шторм. изучив эти признаки можно оказаться на гребне большой волны, наслаждаясь огромной энергией. И важно понять когда эта энергия теряет свою силу.


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 Danail Yordanov, Leadership that brings a hamony

 Friday, December 25, 2015



I agree with you! You have summarized the essentials.


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 Mark Brown mark@markbrown.com, Global Quantitative Financial Research, International Institutional Trading, Algorithmic Modeling.

 Friday, December 25, 2015



Thomas - the recent discussion titled T/A Fails Time and Time Again - Why? Actually explores how T/A might actually work more dependably with consistent results when using non time constrained data. Not that T/A doesn't work.


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 Paul Ferry, President, Ferry Capital Management

 Friday, December 25, 2015



Where are the examples of T/A & the 139 stocks


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 Oscar Cartaya, Private Investor

 Friday, December 25, 2015



I think we are looking at the use of TA in absolute terms, instead of relative terms. TA indicates possible outcomes, or approximate outcomes based upon previous price action. This is fine, it does do that. What it does not do is to give solid and definite solutions with solid entries and exits, these solutions have to be worked up by the trader. The reliability of the results obtained may be improved by using specific techniques like non time constrained data, or rigid adherence to a set of rules developed by the trader. This is entirely correct. However in the final analysis TA, as helpful and useful as it may be in expert hands, will not provide absolute solutions to the market. Even in the best and most expert hands, there is always the possibility of a bad trade due to a bad interpretation of a TA pattern or setup. Absolutely no one scores 100% profitable trades at all times regardless of what technique they use.


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 Mark Brown mark@markbrown.com, Global Quantitative Financial Research, International Institutional Trading, Algorithmic Modeling.

 Friday, December 25, 2015



Paul - I think it would be logical to follow the top five to ten or so of the largest cap stocks in option-able indexes. This will bring you to a portfolio that has all the action covered.

Oscar - there are a couple of trading methods where a trader can win absolutely 100% of the time. You have to have an open mind that anything is possible, because it is.


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 Сергей О., trader – Alpari

 Friday, December 25, 2015



Мое мнение, никто и никогда не сделает 100% сделок в плюс. да это и не нужно для прибыльной торговли


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 Danail Yordanov, Leadership that brings a hamony

 Saturday, December 26, 2015



Whatever type of analysis is based on information that has been given/announced to the market. The reactions to that information cause what's happening or not. What if the information is manipulated to certain extent? There's no guarantees whatsoever.


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 private private,

 Saturday, December 26, 2015



It's a probability game, casino make money with only 51%. TA is like 80% accurate. From me, most of the time, the trouble is in the MM as M.Kee said, not TA.


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 Сергей О., Специалист – Упаковочная промышленность

 Saturday, December 26, 2015



Самая большая беда это СТРАХ.


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 Oscar Cartaya, Private Investor

 Saturday, December 26, 2015



Mark, with no intention to offend you, I find it very hard to believe that there are trading methods that produce 100% wins. Perhaps if you were kind enough to provide some kind of general information as to what these methods may be, it might be possible to open my eyes to new possibilities.


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 Mark Brown mark@markbrown.com, Global Quantitative Financial Research, International Institutional Trading, Algorithmic Modeling.

 Saturday, December 26, 2015



Oscar - I know it is hard to believe you can win 100% of the time and never take a loss. However there are several trading methods that are capable of that. One such method involves selling naked options, given a solid plan and adequate reserve capital you can not lose. There are of-course other less known methods which do not involve options as well.


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 Oscar Cartaya, Private Investor

 Saturday, December 26, 2015



OK Mark, I had not thought of this and you may be right. I will have to think about it.


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 sean seo, Portfolio Manager at KH Investments

 Sunday, December 27, 2015



I agree on that. I'm sure that it works


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 Pablo B., en BR ARQ Ltda.

 Monday, December 28, 2015



Thomas: do you use TA also as a way to classify that sentiment table, or only for trading what the table shows?


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 Thomas Kee, President & CEO of Stock Traders Daily

 Monday, December 28, 2015



Sentiment Table is algorithmicly derived, but generally yes.


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 Evan D., Developer / Analyst at Integral Derivatives

 Tuesday, December 29, 2015



I think Matthieu got it correct here. Trading/Investing is a game of probability. As long as you aren't too greedy, make reasonable assumptions, and act accordingly, getting things >50% correct is certainly achievable. Keep in mind that Warren Buffet had one of his worst years on record (purely performancewise relative to the market), but was still able to make a number of acquisitions and substantially profitable investments.

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