Talk:Technical analysis

Unhelpful edits

The unsourced, critical personal remarks about MTA members is inappropriate in an encyclopedia article on technical analysis, as is a link to financial astrology. --Rgfolsom 15:38, 8 June 2007 (UTC)

The edits and comments regarding financial astrology are inappropriate and unsourced. It's true that the Market Technicians Association has not defined technical analysis, but it clearly does not include financial astrology in the CMT course curriculum. --Rgfolsom 17:39, 8 June 2007 (UTC)

The MTA has a definition of TA. I've included it in the article. Additionally,there are few technicians that consider Financial Astrology to be part of TA. Some do use it however, and I was always one who argued that we should not disallow it from discussions on the old MTA email list. That however does not me we consider it to be TA. We discussed economics there are as well.

I'm glad to be corrected about the MTA having a definition, and I followed up to find a linked reference to include in the article. I've removed the mention of Bollinger in the paragraph, at best it adds nothing to the article overall.

--Rgfolsom 17:39, 11 June 2007 (UTC)

Edits by 207.195.244.116 to Technical analysis have been unsourced and inappropriate for the article. Please stop, or I'll request that the page be protected.

--Rgfolsom 01:15, 13 June 2007 (UTC)

Neural Networks

I've added 2 references to this, the one to Funahashi and the one to Hornik in the same journal (and volume). The Hornik article is slightly later and is probably the first source of the phrase 'universal function approximators.' The Funahashi article refers only to continuous functions, and says that for function defined on a bounded region there is an arbitrarily good uniform approximation using a 3 level neural network allowing large numbers of neurons in the middle layer.

Also it would be good if someone had an idea how this section fits into the article.

Just as 'technical analysis' is controversial, also the use of neural networks in attempting to extrapolate a single function of time is also controversial in the same way the usefulness of Fibonacci numbers or Elliot Waves is controversial. For the 1 or 2 articles finding a statistically significant gain, many more do not. But the concept of approximating a function is not controversial and neural networks perhaps fit in in the sense that they bridge the gap between fundamental analysis where actual equations can be written down, and there is no question effects exist, on the one hand, versus technical analysis which is intuition and in some opinions questionable. If a function of several variables can be empirically approximated, it can be used even if the precise equation is not known or understood. 82.26.87.140 23:48, 8 June 2007 (UTC)

Actually I see someone did talk about this concept of neural networks 'bridging the gap' between technical and fundamental analysis, which is insightful or else I copied the idea, but the end of the sentence explaining why, that "these variables can be used as inputs" doesn't seem clear enough. I think it refers to the variables from fundamental analysis??? YES Yay the article is more intelligent than I thought, but no one but a genius is going to understand that the antecedent of 'these variables' is the variables of fundamental analysis. I am going to make a 1 or 2 word edit if people think it is OK to make the antecedent of 'these' clearly refer to the variables of fundamental analysis.82.26.87.140 23:58, 8 June 2007 (UTC)

Continued changes regarding "what is technical analysis"

I have never seen Bollinger say dividends are part of TA. He suggests a different form of analysis that is more an inclusive than TA: Rational Analysis. Here is a link for the Bollinger "Rational Analysis" definition: http://www.bollingerbands.com/bbandsforum/viewtopic.php?=&p=15. Unless you can cite a source, please stop entering this statement.

As far as financial astrology is concerned, it is not part of the MTA's Body of Knowledge. There is no reason for the MTA to say that financial astrology is not part of TA. That is kind of like requiring George Bush to say he is not a Democrat for us to believe it, when he is a registered Republican.

Please halt these useless, and factually incorrect changes.

Sposer

Financial astrology

George Bush has never denied doing cocaine either, even though there are many eye witness reports that he used the drug in his youth.

There is every reason for the MTA to say that financial astrology is not a part of TA, given the multitudinous, heated discussions that have taken place on T.A. forums over the years on this subject, and which continue to occur on a regular basis. Not to mention that one of the best known and most visble "technicians" is Arch Crawford, who blends Financial Astrology with technical analysis, which further confuses the public. Chris Carolan won the 1998 MTA Dow Award for his paper which shows fibonacci time relationships with the lunar cycles between major market tops and bottoms, including a discussion of the impact of "full moons." Given all of this, and much more, it makes every good sense in the world for organized technical societies to take a clear, public position on the issue. The same argument is made for dividends and other non-technical data. Mr. Bollinger has spoken publically about dividends being technical, as recently as his posts to the Markets List, on Feb 22-23, 2007.

Explanation for changing edits

Carolan's paper combines TA and lunar cycles, not astrology (nothing about Uranus going retrogade with another planet, or signs of the Zodiac). Combining methods does not make it purely TA. Again, there is nothing in anything the MTA has ever written that even comes close to implying that astrology is part of TA. Stop twisting things. If financial astrology was considered part of TA by the MTA, or IFTA, or any other TA organization, it would be in their Body of Knowledge or in books on the subject, which I have never seen (not that I've seen every book).

As far as dividends and price ratios, I personally would call it techno/fundamental, which seems to be a developing field. It combines both. I think a technical analyst would not be doing his/her fiduciary duty to not consider such ratios. Double tops and bottoms based on ratios combine both types of analysis. Bollinger wrote that many technical analysts use dividend yield. He did not say it is technical analysis. However, this is basically playing games with words. To be honest, arguing over dividends is a waste of time, as is ratios. Suggesting that use of dividends is not globally accepted as being TA is reasonable, but I wouldn't use a post that does not directly say dividends are TA, as an example.

--Sposer

You are certainly entitled

To your own opinions, but you are not entitled to your own facts.

Can other editors please weigh in here and help us get a consensus

There are two issues at hand:

(1) It is completely reasonable to suggest that there is no real agreement on what is or is not technical analysis. Some consider items like P/E ratio to be part and parcel of TA, because price is what technicians chart to determine future price. Sentiment also falls into this category. Some use a more restrictive definition that says that only data directly produced by trading, or its arithmetic derivatives are under the aegis of TA. I think this is an important and valid point to be brought up. The dispute revolves around statements that are taken out of context. Mr. Bollinger is referred to as having said that TA includes the study of dividends. This comes from a protected GMAIL group. However, he actually said that many technical analyst use dividends in their work. Most technical analysts do not ONLY use TA. Bollinger has consistently argued that technicians need to go beyond price and volume and look at non-direct trading factors. He calls this "Rational Analysis". I provided a link for this earlier in the talk chain.

(2) The second issue is over the constant attempts to either imply that the Market Technicians Association (MTA)considers Financial Astrology to be part of TA, because it has never outright said that it does not. However, Financial Technology does not show up in its Body of Knowledge, nor is it a requirement for the Chartered Market Technician exam. Just becuase a few technical analysts look at things like lunar cycles, and in the case of the editor's reference to Arch Crawford, other astro-items, does not mean that Crawford considers it TA. I honestly do not know what he considers it.

The editor brings up an interesting point regarding the work of Chris Carolan. Carolan received the Dow Award, which is given by the MTA for advances in TA. Carolan's work ties Fibonacci work, which is TA, with lunar cycles. I was not part of that Dow Award decision (I have been on the committee at other times), so I do not know their thinking. However, a pure technical analyst would essentially say he/she has found a price cylce, whereby prices move in an approximate 28-day cycle. That person would also have found that there have been many major market turns around these points. I found a similar pattern in the bond market, which coincidentally occurred around the monthly U.S. non-farm payrolls release. In my case, that does not mean that I consider economics to be part of TA, nor would anybody else I know of. It means that I found, outside of TA, a reason or correlation for the price cycle. Carolan found a non-TA correlation for this price cycle. Adding it to technical work, was a major accomplishment in my opinion, and aids any market analyst, if they believe in the validity of the study, in their attempt to find turning points in price trends.

This article is about technical analysis, and so the definition is certainly critical. I added the MTA definition of TA, because of the repeated attempts to suggest the MTA is avoiding the issue of things like financial astrology. To be honest, I would be just as happy without bringing the MTA into the discussion at all. It is perfectly valid to state that there is some disagreement over what is TA. However, if you polled 100 technicians, I doubt you'd find one that says Financial Astrology is part of TA, I submit that there is no reason for it to even be mentioned in this article.

--Sposer

Wikipedia's rules and guidelines speak to the question at hand.

Articles cannot include original research, namely "unpublished facts, arguments, concepts, statements, or theories. The term also applies to any unpublished analysis or synthesis of published material that appears to advance a position…"

Instead, what articles must include are reliable sources:

"…any material that is challenged or likely to be challenged needs a source, as do quotations, and the responsibility for finding a source lies with the person who adds or restores the material. Unsourced or poorly sourced edits may be challenged and removed at any time….Reliable sources are credible published materials with a reliable publication process; their authors are generally regarded as trustworthy, or are authoritative in relation to the subject at hand."

The editor behind the anonymous IP address who asserts that astrology is technical analysis is putting unsourced, original research into this article. Editors can and should remove any such assertions.

As for Bollinger, his comments about "rational analysis" do not belong, unless Bollinger himself can be quoted in a reliable source as saying that "rational analysis" fits within the definition of technical analysis.

These matters are very straightforward, especially when the unsourced claims are coming from an anonymous IP address. I'm going to bring all this to the attention of an administrator who can put an appropriate block on the page, if it comes to that again.

--Rgfolsom 14:27, 14 June 2007 (UTC)

Offensive, Patently False

It is offensive and against all Wiki policies to smear another editor, in order to push a personal POV. There has never been a single attempt by anyone to "assert that astrology IS technical analysis," as Rgfolsom has falsely accused. Nor has there been any attempts to imply that the MTA considers Financial Astrology to be part of TA, as Sposer has falsely accused.

Administrators should reprimand Rgfolsom and Sposer for attempting to spread these lies.

What is true, and what has been claimed, is that Financial Astrology is often confused with technical analysis, and that (some of) the reasons for this include the following, verifiable FACTS:

1) The largest organizing body for technical analysis in the United States has granted its most prestigious award to an analyst for a paper which specifically deals with Astrological factors.

2) One of the most prominent and visible ambassadors for technical analysis, Arch Crawford, is a strong proponent of Financial Astrology.

3) Personal pledges by certain editors notwithstanding, the MTA's own official definition of technical analysis does not exclude Financial Astrology, or fundamentals, as viable "technical" subjects.

Combine 1+2+3 plus Sposer's own admission that "it is completely reasonable to suggest that there is no real agreement on what is or is not technical analysis" and one can begin to see how this issue is vitaly important to an understanding of technical analysis, and the importance to this article.

Apparently there is an effort underway to suppress the truth and the facts about the ongoing, extant debate over the definition of technical analysis, and the question of whether the MTA's current definition of technical analysis permits the inclusion of subjects such as stock dividends and Financial astrology.

This is not a trivial matter, given the wide public exposure to, and confusion over, the term "technical analysis," and given the fact that there is no agreement on the definition by and between the the most prominent and visible ambassadors of technical analysis, such as Mr. Bollinger, who believes the study of fundemental data falls under the definition of technical analysis, and who rejects the notion of any true defintion of technical analysis, and therefor has come up with an entirely new subject heading which he refers to as "rational analysis," and Mr. Crawford, and the MTA itself.

As Sposer points out, Mr. Bollinger has claimed that "many technical analyst use dividends in their work" in support of the idea that that fundemental data, and specifically dividends, either do, or should, fall under the subject heading of "technical analysis." There is nothing wrong or evil with this. It does however underscore the fact that a) there is no widespread agreement on the definition of technical analysis, and b) the current definition offered by the MTA, while made in good faith, does not add any clarity or help resolve the underlying issue.

Some editors have decided to remove any reference to these facts, which are all fully documentable and true, in order to push their own personal points of view. Administrators please take note. At least one of the individuals behind the effort to block this information is a representative of the MTA, which perhaps partially explains their motives.

MTA, etc.

I stand by the simple facts that the MTA defines technical analysis by its Body of Knowledge and there is no Financial Astrology in its BoK. I honestly do not know if things like dividends and P/E ratios are in it or not, as I do not have it in front of me. But, as I said, I think that inclusion of financial ratios and dividend yields, since they include price, is a discussion that is important (no price in tracking in the moon). I explained why I suspect the Dow Award went to Mr. Carolan, but this article should not be based on assumptions, mine or others, but rather on facts, and there is no fact that suggests that the MTA considers Financial Astrology to be part of TA. Not denying Financial Astrology is part of TA, in my opinion, does not muddy the waters. The other editor thinks it does. The whole concept is based on POV, so it does not belong here.

I am going to stand down on this going forward, since the other editor seems to think I am trying to protect the MTA. I am on the board of the MTA, but the MTA has not asked me to do anything. The MTA does not know of these discussions, and I am not writing as anything but an independent editor and person who has worked as a technical analyst and author. However, some people may not believe that, so to avoid any hint or suggestion of bias, I will exit this discussion, as it relates to the MTA, and leave it to others. I will no longer edit anything that has to do with the MTA in this article, even when it becomes unlocked.

As far as the issue regarding Mr. Bollinger, I am not going to put words in Mr. Bollinger's mouth either. That is the only issue I have with referring to him in the article.

This is the last I will contribute on the discussion. I have stated the case. It is up to others to come to an agreement.

--Sposer

Response to MTA, etc.

It has never been asserted that the MTA includes Financial Astrology in its Body of Knowledge, nor has it ever been asserted or implied that the MTA endorses or considers Financial Astrology to be part of technical analysis. THE ONLY thing that has been said, and which deserves to be part of any official article on "technical analysis," is the FACT that there is much debate, disagreement and public confusion over the definition of "technical analysis," and that the current definition offered by the MTA and by other well known leaders in the field such as Mr. Bollinger, contributes to this ambiguity. Mr. Bollinger for example supports a definition of technical analysis which includes the study of dividends. That is not hearsay, it is a fact.

If Mr. Poser and Rgfolsom are going to include the MTA's definition of "technical analysis" in this article, then it is only fair that all of the facts surrounding this definition be included. Currently the article is "locked" in an effort to protect the personal POV held by Poser and Rgfolson. This is unfair and not in the spriti of Wiki policy.

NPOV

The article flunks WP:NPOV by segregating the criticism and omitting it from the lead section. Mainstream financial specialists consider technical analysis to be quackery, and the article fails to indicate that up front. THF 17:13, 18 July 2007 (UTC)

Calling technical analysis quackery is THF's POV. There is a growing body of academic work that suggests TA to be a valid discipline. The London School of Economics published papers more than 15 years ago supporting things like moving averages in the FX markets leading to positive alpha (although it did not delve deep enough to determine whether transaction costs could be overcome). Such academics as Andrew Lo (MIT), Elizabeth Odders-White (University of Wisconsin), Blake LeBaron (Brandeis), and many others have published papers that show its efficacy. Most recent papers that look into technical analysis lead with sentences like "Academics no longer consider technical analysis to be a waste of time..." and now are seeking to understand how and my it may very well work. Sposer 18:22, 18 July 2007 (UTC)

I am respectfully removing the tags that THF placed in the article. Adding to what Sposer said, please consider the following:

• Federal Reserve economists have published numerous favorable studies about TA.[1][2][3]
• The Boston branch of the Federal Reserve for years has published its monthly "Stock Market Report," which "incorporates technical and fundamental analysis commonly used by investment professionals to interpret the direction and valuation of equity markets." Each report begins with a discussion of "Technical Trends." It also includes the types of charts that technical analysts typically use, plus abundant notes and definitions regarding the technical indicators mentioned in each issue.
• There's this comment in an online text (chapter 11, pp. 114-115) from the then-executive vice president of the New York Federal Reserve: "Nearly all traders acknowledge their use of technical analysis and charts. According to surveys, a majority say they employ technical analysis to a greater extent than 'fundamental' analysis, and that they regard it as more useful than fundamental analysis—a contrast to twenty years ago when most said they relied many more heavily on fundamental analysis."
• The professional designation for technical analysts (CMT) is now recognized by Wall Street's two primary self-governing bodies, and by the U.S. Securities and Exchange Commission. [4] [5]

The regulatory agencies allow those who have passed the first two (of three) CMT exams to skip the Series 86 exam for analysts. They also expect the Market Technicians Association to protect the CMT designation.Sposer 01:08, 27 July 2007 (UTC)

• Technical analysts have their own associations with thousands of professional members. The largest such group has a board of directors that includes blue-chip professionals and academics. Its members have developed entire technical analysis college curriculums, and the courses and curriculums are increasingly recognized and taught at well-known universities.

Thanks, --Rgfolsom 19:01, 18 July 2007 (UTC)

Sorry, but if THF had written "nearly all mainstream financial specialists consider technical analysis to be quackery, and the article fails to indicate that up front." Then he would have been 100% correct. Leaving out the controversy upfront - with 2 folks with admitted COI's - patrolling this article, has led to a POV that goes throughout. e.g. quoting Greenspan as supporting a technical POV when he clearly doesn't. I'd like to see Sposer's quotes to support 'Most recent papers that look into technical analysis lead with sentences like "Academics no longer consider technical analysis to be a waste of time..."' I'll put the tags back. Smallbones 19:12, 18 July 2007 (UTC)

I found the quotes while researching a response to Mr. Frank's changes. I saw a quote in a magazine article and a paper that said this. Sadly, I cannot find this. So, don't put the tags back, based on my statement. If I find it, I will be sure to let you know. Sposer 21:00, 18 July 2007 (UTC)

Smallbones, I need to politely remind you of what happened the last time you were in a dispute with me about who has a problem with bias. THF offered no evidence for his assertion, and in reposting those tags, you ignore the facts and evidence that I have included. As for Greenspan, the article flatly says "he has not described himself as a technical analyst." Please don't do this.

--Rgfolsom 19:49, 18 July 2007 (UTC)

From the Financial Times

“ Business television shows trot out one technical analyst after another to tell you how to invest, based on resistance levels, moving averages, momentum and buy/sell signals. Don’t listen to them. Technical analysis is an oxymoron. It sounds technical, but it is not analysis. It is rubbish, plain and simple. There is not a single money manager or mutual fund who has generated an impressive long-term record using technical analysis. Nor a single academic study that indicates technical analysis offers any utility to investors. It is the stock market’s version of snake oil. Columns touting investment strategies based on technical analysis belong in the horoscope section of the newspaper, not in the business section. ”

[6]

Simply put, this Financial Times op-ed reflects mainstream financial thinking on technical analysis. It's only one point of view, and should not be the only point of view in the article, but it is the majority point of view, and the article as currently constituted gives undue weight to the minority opinion on technical analysis in violation of WP:NPOV. The majority opinion should be given at least equal weight, and should certainly be included in the lead section per WP:LEAD. Financial Times is at least as much of a reliable source as the sources cited in this article.

Moreover, the article, instead of integrating criticism, improperly has a criticism section that segregates the criticism from the rest of the article. This is also a violation of WP:NPOV: see WP:Criticism. And much of the criticism section is marred by WP:NOR violations "responding" to the criticism. THF 20:05, 18 July 2007 (UTC)

I can give you so many academic papers that support TA, from slightly, to extremely, that it will make your head spin. Citing an article from the FT is incongruous. I am willing to bet that in the same edition where they had this piece, they quoted at least five technical analysts in articles in the paper.

I suggest you go to www.ssrn.com and do a search on technical analysis. You will find that most of the papers support TA. I only went down a couple of pages, but I am guessing that is the more recent research. One paper (when I find it again I will provide a link) listed a bunch of surveys and found far more surveys found evidence supporting TA than suggesting it did not work.

Additionally, to suggest that TA does not work because there are no technical managers with long-term positive results is just plain wrong. Tudor uses TA, for one. But, that is not proof anyway. Citing 500 investors or papers will not be good enough for people that believe it does not work. Sposer 21:00, 18 July 2007 (UTC)

I've been here before, THF. I respectfully urge you to read this arbitration decision, including the evidence pages. The question of whether I write and edit from a NPOV has been answered decisively.

Regarding the quote you provide, it includes inflammatory words like "quackery," "rubbish," "snake oil," "horoscope" and "oxymoron" -- and does so with zero accompanying evidence. On its face that fails WP:NPOV, specifically:

"We sometimes give an alternative formulation of the non-bias policy: assert facts, including facts about opinions — but do not assert opinions themselves. There is a difference between facts and opinions. By 'fact' we mean 'a piece of information about which there is no serious dispute.'"

This critic plainly asserts opinions instead of facts. Critical facts are neutral; critical opinions are not neutral. What's more, it fails WP:RS, specifically:

"Claims not supported or claims that are contradicted by the prevailing view in the relevant academic community".

The relevant community in this case is financial academics, such as those listed here, the research from the Fed economists I cited above, and the regulatory body for the securities industry (SEC).

The one quote you offer from an obviously biased columnist is the opposite of a "reliable source," and the burden remains squarely with you to back up your as-yet unsubstantiated claim.

--Rgfolsom 21:11, 18 July 2007 (UTC)

There are multiple facts stated in the article. You disagree with the facts, but I disagree with the astrological "facts" you've propounded. That's why we have an NPOV policy: editors don't have to decide whether the mainstream view propounded by Alsin is correct or incorrect. Both points of view get included, and the mainstream point of view is supposed to be given the primary weight, not the other way around. Your repeated reversion of a legitimate tag violates Wikipedia policy. The tag indicates a dispute and should not be removed until the dispute is resolved. You don't get to unilaterally remove a tag because you disagree with it. Please self-revert. THF 22:10, 18 July 2007 (UTC)

convenience break 2

THF: Your points might be reasonable if they were based in fact. Even papers that suggest that TA does not work, usually do it from the perspective that academia does not understand why market participants continue to use something that they believe should not work (note they say they believe it should not work due to some, IMO, belief in a largely discredited model of the markets). I don't have time to give you the list, but I doubt you would find a single paper cited above, or even one that seemingly disproves TA, that does not take that tact. You cite an op-ed that is purely opinion, while Rgfolsom and I both cite academic papers. The suggestion of astrology does not belong as this article has nothing to do with astrology. Furthermore, if you spent some time reviewing the literature, and articles from the mainstream, you would find the the mainstream POV is that TA is valuable. When I first started in TA, that opinion was largely limited to traders and technical analysts (i.e., those people that actually had to live and breathe the markets). Now, that appears to be changing. Much of quantitative analysis is merely TA done by a person with a PhD as it is. I suggest you do some soul-searching. There is certainly a dispute that TA works or not, but mainstream is that it does. There are more CFAs in the Market Technicians Association (MTA), than there are Chartered Market Technicians. As for my bias, you should know that although I am on the board of the MTA, I no longer work as a technical analyst, and my education is in mathematics, computer science and economics. I came to TA only because I found it was the ::only thing that did appear to work. It isn't perfect. It isn't deterministic, but it is not voodoo or quackery. Sposer 22:45, 18 July 2007 (UTC)

Sposer, you are arguing that my point of view is incorrect. I disagree, but it's beside the point on Wikipedia. The whole point of WP:NPOV is to avoid issuing judgments on which side is correct; in fact, it is irrelevant. The question is whether it is verifiable, and it's verifiably the case that technical analysis is discredited among the reputable. That point of view is not adequately represented in the article. It's also beyond dispute that the page improperly contains a criticism section instead of integrating the criticism into the article. Thus the NPOV tag is appropriate, because the page does not comply with WP:NPOV. THF 23:02, 18 July 2007 (UTC)

THF: You apparently have not read anything cited by anybody here. It is undeniably the case that TA is absolutely accepted by most people in the markets and an increasing number of academics. You said that the article states the fact that the generally accepted fact should be that TA is not accepted and not useful. In point of fact, it is the exact opposite that is true. I have no problem mentioning that there are many that question TA's efficacy in the early part of the article, but not as if that is the general belief, because it is 100% the opposite. Read any newspaper. Talk to most traders, and money managers. Virtually all use TA at some level. Sposer 01:31, 19 July 2007 (UTC)

THF, What’s ironic is that you offer a quote which objects to technical analysts always appearing in the one place that epitomizes “mainstream financial thinking” -- namely business television shows! If financial forums that have the largest audiences (by far) constantly feature technical analysis, then are business televisions shows outside of “mainstream financial thinking”?

Sposer and I have spoken directly to your points, yet you have ignored the abundant facts and evidence we provide showing that technical analysis is well within the financial mainstream. Wikipedia’s guideline (not policy) about a criticism section warns against it becoming a magnet for trolls, etc. That’s not the case in this article – other theories are linked to and explained fairly; the critics are quoted speaking for themselves, which is entirely consistent with NPOV.

This article has few contributors, so reaching a viable consensus is unlikely. The other editor who spoke up for your view probably put himself on very thin ice, given that he was banned from articles closely related to technical analysis – among other things, he kept putting biased remarks and quotations in the lead section. Again, read the arbcom decision for yourself.

You say this article fails NPOV for not indicating “up front” that “mainstream” analysts think technical analysis is “quackery.” I am more than prepared to take the other side of that argument to dispute resolution, and it won't be the first time. --Rgfolsom 02:03, 19 July 2007 (UTC)

Wikipedia is not a chatroom. Again, you are arguing that my opinion is incorrect, and this is beside the point. Wikipedia doesn't care that you think that I'm incorrect. (Don't take it personally. Wikipedia doesn't care that I think you're incorrect either.) The article flunks NPOV because it fails to integrate criticism of technical analysis into the article, because it improperly uses original research to falsely claim that Greenspan is a technical analyst, and because it doesn't give appropriate weight to what every reputable finance professor I've ever seen quoted about the subject thinks about technical analysis. Astronomers don't waste a lot of time refuting astrology, either, it doesn't mean that astrology is a mainstream scientific view. THF 02:25, 19 July 2007 (UTC)

Nobody ever said Greenspan was a technical analyst (although I suspect he is a closet technician, which I was implying at the time and was properly chastised for, as I did not know the Wiki rules well enough at that time). What was put in was that he has been quoted using verbiage that is similar to what technicians see as their reasons for believing in the subject. As far as "reputable finance professors", the articles cited as supporting technical analysis include pieces by professors at MIT, Brandeis, Notre Dame, the London School of Economics, the University of Wisconsin, the University of Warwick, among others. Sposer 02:39, 19 July 2007 (UTC)

convenience break 3

Sposer improperly removed the NPOV and criticism-section tags. There remains a dispute about the compliance of the page with NPOV, and the page quite obviously flunks WP:Criticism. THF 02:28, 19 July 2007 (UTC)

The tags were removed, because I made edits that seemed to address your concerns regarding the criticism and NPOV section. Sposer 02:39, 19 July 2007 (UTC)

You could've asked. No, I wouldn't remove the tags, for the reasons I've previously stated. THF 02:44, 19 July 2007 (UTC)

Response to RfC

I think that it is overkill to include criticism so high up. There is already a good-sized criticism section. It does not have to be flogged so prominently. I agree with some previous comments that this tends to skew the NPOV of the article and that an NPOV tag is necessary until this issue is resolved. Right now this article is over-weighted with criticism.

I would not cut back on the size of the criticism section but I would remove the repetitious discussion early in the article. --Samiharris 21:07, 19 July 2007 (UTC)

Greenspan

There remains no question in my mind that Alan Greenspan believes in TA. He speaks TA's language and regularly uses it in his speeches. Look at this from one of his speeches:

"History tells us that sharp reversals in confidence happen abruptly, most often with little advance notice. These reversals can be self-reinforcing processes that can compress sizable adjustments into a very short time period. Panic market reactions are characterized by dramatic shifts in behavior to minimize short-term losses. Claims on far-distant future values are discounted to insignificance. What is so intriguing is that this type of behavior has characterized human interaction with little appreciable difference over the generations. Whether Dutch tulip bulbs or Russian equities, the market price patterns remain much the same.

We can readily describe this process, but, to date, economists have been unable to anticipate sharp reversals in confidence. Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect. To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific companies that make up our broad stock price indexes." [7]

The man refers to the exact reasons that technicians believe in its value -- because human behavior and interactions have not changed. HE WROTE THAT THE "MARKET PRICE PATTERNS REMAIN MUCH THE SAME." In the next sentence, he says economists cannot predict bubble collapses. That's fine. Technical analysts can. If you think he doesn't believe in TA, you are ignoring what he says, and are instead listening to your own biases. Do you have any quotes from Greenspan where he says that he rejects it?Sposer 20:47, 20 July 2007 (UTC)

Do you have a reliable source that explicitly says he accepts it? shotwell 21:03, 20 July 2007 (UTC)

No, nor am I arguing that he accepts it. I argue that he uses the terminology of technicians. I do have "unnamed sources" that say he uses it and believes in it, and we all know that the Fed uses it and studies it and works against it in interventions (there are academic studies that show this for central banks in general), as you can see from the many articles they've written on the subject. I do know they follow it, simply because they, and other central banks, are clients of technical analysts on the Street (I used to be one such person). My point is that if it looks like a duck, and quacks like a duck, it might very well be a duck. Greenspan argues that the patterns remain the same. If they remain the same, you can profit from them (my words, not his), and that is what technical analysts do. I propose something like, "Although Alan Greenspan is clearly not a technical analyst, he has repeatedly espoused ideas that proponents of technical analysis point to in support of their craft. For example,(above quote) .... I would then add, to make those that have not kept up with academia lately and are under the, IMO, false impression that academia does not believe TA works, "This does not prove that Alan Greenspan accepts or uses technical analysis in any way, but explains the many papers that Fed economists have written on the subject."Sposer 21:15, 20 July 2007 (UTC)

Ok, maybe it does look like a duck, but we aren't here to decide the matter. It seems like you're trying to tie a Greenspan endorsement into this article based on your own deduction that he espouses some central principles of TA. The one glaring problem is that this constitutes original research. The second problem is that I don't think the above quote entirely supports your position. In the last paragraph, he says that economists are unable to predict sharp reversals and this article says that TA analysts attempt to predict reversals. I'm completely ignorant about this subject, so please correct me if I'm reading it wrong.

If there are academic studies showing that the fed uses TA, then it isn't necessary to include the Greenspan information. The studies would be far more convincing anyhow. shotwell 21:34, 20 July 2007 (UTC)

shotwell,

Thanks for archiving the talk page, it helped a lot. Please look at the link I’ve provided above to the arbitration case with smallbones and myself. He has nothing but contempt for technical analysis, and has proven that he cannot be unbiased in articles that relate to it.

The quotation shows that a public comment by Greenspan agrees with one of the core premises of technical analysis. This is a simple statement of fact, not original research that tries to concoct an “endorsement.” The text flatly says that Greenspan has not identified himself as a technician. The Fed doesn’t “endorse” any particular analytical method or tool, but the links and quotes I provided above make it undeniably clear that the Fed recognizes and treats technical analysis as mainstream, in that it’s widely used among financial professionals. These are facts that people who throw around words like “pseudoscience” and “quackery” refuse to face.

I’m also going to take down the “expert” tag, because this article has been and is getting attention from an expert. Sposer is a technical analyst who has practiced the trade professionally, written a book published by a reputable publisher, and is a Chartered Market Technician in good standing with the MTA, the largest professional group of its kind in the U.S. --Rgfolsom 23:45, 20 July 2007 (UTC)

1) The article needs an academic expert. CMT and MTA carries negative weight on this question. It's not the case that only astrologers get to edit astrology articles.

2) The Greenspan quote does not mention technical analysis, so concluding that it is relevant to the technical analysis article is a violation of WP:SYN, and thus WP:NOR. The conclusory argument that it is not original research woefully misunderstands the NOR policy. THF 00:04, 21 July 2007 (UTC)

The example given in WP:SYN shows that the violation is analysis that injects opinion. Yet it is a fact that technicians believe the history of investor behavior appears to repeat itself. It is also a fact that Alan Greenspan believes the history of investor behavior appears to repeat itself. The article cites reliable sources to present these facts so, the quote stands.

Your demands about what this article needs have progressed from expert, to “real” expert, to chiropractor, to “academic” expert. The tag on the page says “expert,” and that is what Sposer is. As for your comment about the MTA, you may as well claim that a CPA carries “negative weight” in an article on accounting.--Rgfolsom 20:08, 21 July 2007 (UTC)

"CMT and MTA carries negative weight"...That reasoning happily therefore removes from consideration anybody in the CFA that does not believe TA works and other flat earth afficianados. You are limiting yourself then to finding the one or two academics that know something about TA, efficient markets, and fundamental analysis, and somehow have no opinion on the efficacy of any of the above. I wish you luck.Sposer 16:23, 22 July 2007 (UTC)

I really don't agree with you about the Greenspan thing. If Greenspan has regularly espoused the principles of TA and this fact was noteworthy, then there would be mention of the fact in some reliable source. As mundane as it may seem, it is your opinion that he's espousing the principles and you've yet to provide a source that echoes this opinion. Moreover, it is clear that the section is being put there in order to serve as some sort of defence or endorsement. I don't understand the need to defend TA in this manner. I did a search on Academic Search Premiere and loads of articles about technical analysis came up (most were just about techniques). shotwell 22:07, 21 July 2007 (UTC)

Greenspan might even be a TA believer, but dropping this quote in the article is astonishing OR. WP:SYN quite clearly speaks of using perfectly factual and verifiable material to advance a new position: that's precisely what's going on here. Shotwell says it very well above. Cool Hand Luke 09:20, 22 July 2007 (UTC)

Just to be clear about Greenspan (this is from the Fed and was on the talk page previously). He states rather clearly that no system can predict foreign exchange prices and uses language similar to that some of the TA's here seem to find offensive. Thus I am removing the other Greenspan quote which, in the context of this article, implies that he believes in TA (or is otherwise just pure OR)Smallbones 16:49, 22 July 2007 (UTC)

Remarks by Chairman Alan Greenspan At the European Banking Congress 2004, Frankfurt, Germany November 19, 2004

From Federal Reserve [8]

“The inability to anticipate changes in supply and demand for a currency is at the root of the statistically robust finding that forecasting exchange rates has a success rate no better than that of forecasting the outcome of a coin toss.2”

Footnote 2. The exceptions to this conclusion are those few cases of successful speculation in which governments have tried and failed to support a particular exchange rate. Nonetheless, despite extensive efforts on the part of analysts, to my knowledge, no model projecting directional movements in exchange rates is significantly superior to tossing a coin. I am aware that, of the thousands who try, some are quite successful. So are winners of coin-tossing contests. The seeming ability of a number of banking organizations to make consistent profits from foreign exchange trading likely derives not from their insight into exchange rate determination but from the revenues they derive from making markets.

Once again, the introduction to the Greenspan quote begins by saying that he does not identify himself as a technician; the entire point of including that introductory remark is to stipulate that the quote DOES NOT “endorse” or “support” technical analysis. That said, what this use of the quote does have now is a reference to a reliable source. WP:NOR and WP:SYN are moot.--Rgfolsom 19:37, 22 July 2007 (UTC)

Nonsense. You have no source that shows he was referring to anything remotely like TA. It's therefore either off-topic or SYN. Either way, it doesn't belong here. Cool Hand Luke 20:11, 22 July 2007 (UTC)

I have a properly sourced reference showing that the quote from Greenspan was published in Futures magazine, along with the observation that his words concur with a key premise of technical analysis.

WP:OR refers “to unpublished facts, arguments, concepts, statements, or theories. The term also applies to any unpublished analysis or synthesis of published material that appears to advance a position….the only way to demonstrate that you are not presenting original research is to cite reliable sources that provide information directly related to the topic of the article, and to adhere to what those sources say.”

Furthermore, in the Robert Blair decision, the Arbitration Committee said:

"It is inappropriate to remove blocks of well-referenced information which is germane to the subject from articles on the grounds that the information advances a point of view. Wikipedia's NPOV policy contemplates inclusion of all significant points of view.

Use of this quote is within policy. I will report any further removal of it to the appropriate noticeboard as disruptive editing.--Rgfolsom 16:34, 23 July 2007 (UTC)

• Count me with those who oppose the Greenspan quote. If Greenspan had been saying something about technical analysis, it might be worth arguing about. He is making general comments about human psychology that are related to technical analysis as a subject in only a very tangential way. And as written, the disputed passage seems to do everything it can to imply that Greenspan is sympathetic with technical analysis without actually bringing any evidence to the table of the fact. Ministry of random walks 16:51, 23 July 2007 (UTC)

The quote is sourced, but including it here is SYN. It's being used to introduce a premise of technical analysis, but he is not commenting on TA. Compare the example of WP:SYN where a reliable source is illegitimately used to comment on a subject it wasn't directly addressing. WP:SYN prevents us from taking commentary out of context this way. If Greenspan is supporting the fundamentals of TA in his quote, you must find previous analysis that comes to this conclusion. Cool Hand Luke 16:56, 23 July 2007 (UTC)

He has provided an additional source: Poser, Steven W. (April 1999). “Through Alan Greenspan's eyes,” Futures (magazine), p. 26. Whether or not this supports the claim, I don't know. I think that this addition may have gone unnoticed. shotwell 17:03, 23 July 2007 (UTC)

Oh jeez. You're right. Here's the relevant article text:

Even among true believers, few contend that technical analysis can be used to predict fundamental events. But technical analysis is a study of crowds and markets, and that is what the economy is. This mindset is particularly apropos to not only the U.S. Fed's interest rate moves but the recent forex interventions of overseas regulators. The rationale for this notion does not come from a spurious source. Consider the following:

"[T]here is one important caveat to the notion that we live in a new economy, and that is human psychology... The same enthusiasms and fears that gripped our forebears are, in every way, visible in the generations now actively participating in the American economy... [J]udging the way prices behave in today's markets compared with those of a century or more ago, one is hard pressed to find significant differences... As in the past, our advanced economy is primarily driven by how human psychology molds the value system that drives a competitive market economy. And that process is inextricably linked to human nature, which appears essentially immutable and, thus, anchors the future to the past."

This isn't from an influential technical analyst or highly respected trader. It's from a recent speech by none other than Fed Chairman Alan Greenspan.

Such thinking explains why technical analysis is a useful tool in your analytical cadre. It probably is easier to predict the Fed with this art than it is to plot the next tick in Treasury bonds. Technical analysis explains group dynamics, which are reflected in the markets. Greenspan seems aware of this. Forecasting what the Fed would do with interest rates last November came down to understanding that the credit markets were set to roll over again if the Fed did not ease.

Fine, but credit this analysis inline to Steven W. Poser, who "is president of Poser Global Market Strategies Inc., a global markets advisory .firm based in Upper Saddle River, New Jersey. Reach him via www.poserglobal.com." Cool Hand Luke 17:20, 23 July 2007 (UTC)

The source is "previous analysis," and it absolutely does "come to this conclusion." Removing the quote is an on-point example of what the arbitration committee said is inappropriate.--Rgfolsom 17:18, 23 July 2007 (UTC)

I think it was an honest mistake. That said, I agree with Cool Hand Luke about attributing this analysis to the source if it's included. shotwell 17:27, 23 July 2007 (UTC)

The footnote did attribute the source, according to normal conventions for a proper reference. To include the author's name, title, company name, location and web address would only invite accusations of spam, etc., etc. I'll move the Futures magazine footnote reference to the sentence that introduces the quote, which I hope everyone will (at last) find satisfactory.--Rgfolsom 17:40, 23 July 2007 (UTC)

No, not his business and all of that. Just include the name of the person who thinks Greenspan was talking about TA. He was not addressing it in his speech, and another analyst (Poser) made this logical leap. Cool Hand Luke 17:59, 23 July 2007 (UTC)

Then we have the issue that Poser's opinion is neither notable nor a reliable source, even before you get to the undue weight problem in WP:NPOV. The POV-pushing is not encyclopedic. The quote should be excluded. THF 13:53, 24 July 2007 (UTC)

I think, being Mr. Poser,that his opinion is more notable than anybody here wishing to remove it. That said, I wrote the original section about Greenspan, so quoting an article I wrote, even if Cool Hand Luke and Shotwell do not see it as being a policy issue, I don't think it is the spirit, so remove it.

convenience break 4

HOWEVER, this article needs to be rewritten to get rid of all the garbage going on. Go to www.ssrn.com and try and find articles that have been written in recent years that are negative on TA. You won't find many. I have worked on Wall Street for years, with economists that have worked for the Fed, in fact. In all my time, I've found ONE -- just one -- that did not think TA was valid. The article should be written from the perspective that (1) Give the definition. (2) The encylopedic POV, is what TA states it is. (3) Give a small mention that some academics think it does not work. (4) Discuss types of TA. (5) Show how PROFESSIONALS use TA to make positive alpha. Although I may not be reliable, and it is original research -- thus on the talk page -- I worked with an economist who traded, and used TA only to trade. It was another economist that taught me TA; I had never used it and wasn't taught it (sadly enough) at university. My MBA is in economics, with a post-MBA certificate in finance and BA in Math/Comp Sci, so coming to the TA view was not easy for me, but I am a financial economist that thinks it works, so TedFrank, you've found me, the guy who had me start doing it, and the one who trades with it. I came to TA, because the technicians were the only people who ever seemed to get the market right. Not the economists. Not the fundamental analysts. By even providing anything but a very minor criticism section, you are actually promoting a POV that has almost no merit. Sposer 19:18, 25 July 2007 (UTC)

This rant, which reflects a woeful misunderstanding of Wikipedia policies and WP:NPOV, demonstrates precisely why this article is a mess and needs attention from an expert. That Mr. Poser thinks TA is correct is absolutely irrelevant, and not for discussion on this page, much less the article that he insists on edit-warring about. His most recent POV-pushing edit is inappropriate, violates WP:LEAD and WP:WEIGHT, and needs to be reverted. THF 19:34, 25 July 2007 (UTC)

Understanding Wiki Policy

This is not a chat room, but you tend to use that only when it is to your advantage. Bottom line, you are forcing a POV that questions TA, when few question it anymore. Forcing so much focus on the few that believe TA is not valid, is like focusing on Creationism in an article on the Big Bang. Wikipedia policy is to get the most accurate article possible, but THF and other flat-earthers are trying to promote a POV that nobody that I have met on Wall Street in years, and few in academia, seems to agree with.Sposer 20:58, 25 July 2007 (UTC)

Adding it up

Having a chance to read Greenspans speech - it's clear that he did not say anything about technical analysis in it. He does mention fundamental analysis however.

There are some pretty strong objections to putting this quote in, namely WP:OR and WP:SYN. The following users have seen fit to remove the quote personally, first User:Benna, myself, THP, and User:Cool Hand Luke (Have I left anybody out?) Ministry of random walks is against putting the quote in, and to my reading shotwell leans in that direction.

Against that is Fgfolsom and Sposer, both of whom have WP:COI.

Maybe they should consider other people's opinions on the matter. Smallbones 18:04, 23 July 2007 (UTC)

I have no COI. Yes, I am a director of the Market Technicians Association, but I make not a cent from TA, and consider myself to be an economist. Sposer 20:58, 25 July 2007 (UTC)

Are you the "S. Poser" who wrote the dishonest article in question that purports to show that Greenspan supports TA? THF 21:07, 25 July 2007 (UTC)

You must not think much of libel laws. The article was not dishonest, nor did the editor of Futures Magazine. I did not say in the article that Greenspan believed in TA. I made sure not to say that. Do not put words into my mouth. Yes, I wrote that article.Sposer 21:14, 25 July 2007 (UTC)

You might want to add WP:COI to WP:NPOV on your queue of Wikipedia policies to read, then, before disclaiming COI on whether the Wikipedia article should include a couple of hundred words about a minor piece that you wrote for a TA magazine. THF 21:23, 25 July 2007 (UTC)

I said elsewhere I agree on the removal of the Greenspan quote. I still believe he uses it, but that is my research. What I disagree with is your accepting arguments that only back up your untruths. Osler has written multiple articles. Some say some things in TA work, so say some items to not. I also mentioned Odders-White, LeBaron, and Lo and others. Golfsom has provided others. You are happy to include Fama. Great, he has a Nobel. I still respectfully believe he and EMH are wrong. Maybe we should go back to pre-Copernican astronomy too, for the seminal papers on that. Sposer 23:04, 25 July 2007 (UTC)

Excuse me, but taking other people's opinions into account is precisely what I've been doing. That is why I provided a reliable source for the quote, then moved the placement of the reference, and now I'll be citing Poser by name as the source. Cool Hand Luke will accept this, and so will shotwell. Ministry of random walks should recognize that does not "cool things off" to revert a good-faith edit, even as reaching a consensus is exactly what I'm trying to do -- it's equally unsporting to decide to suddenly "add it up" just as several participants here are close to an agreement about an acceptable way to keep the quote in. --Rgfolsom 18:34, 23 July 2007 (UTC)

Yeah, I don't think this is an OR or SYN violation anymore. I suspect that it's a WEIGHT problem, and I think it's bizarre to go to such lengths for a quote that isn't even about TA (and is presumably less apt than an on-topic quote), but I won't directly interfere with this any more. My primary policy objection has been answered. I still think you should find something else though. Cool Hand Luke 18:41, 23 July 2007 (UTC)

I pretty much agree with Luke. shotwell 18:46, 23 July 2007 (UTC)

I trust that other editors can see that Smallbones spoke on behalf of a nonexistent consensus, and then reverted my good faith edits just as a real consensus appeared at hand. Ministry of random walks has answered my good faith attempts to reach a consensus by claiming 3rr on the admin board.--Rgfolsom 19:55, 23 July 2007 (UTC)

I agree with Luke that the quote doesn't belong. Aside from the WEIGHT problem, Poser's opinion is neither notable nor a reliable source. I see no one other than TAists who believe the quote has relevance, much less belongs in a Wikipedia article, just a couple of editors who object to the POV-pushing but are worn down by tendentious editing. The consensus reflects that the quote does not belong. THF 13:57, 24 July 2007 (UTC)

We can both put words in Luke's mouth, including "My primary policy objection has been answered." I'd rather point out that Greenspan's quote has been properly sourced and footnoted. What you or any other user here says about Poser is irrelevant -- his views appeared in a reliable source, period. The quote stays.

I'll also point out that the 3rr accusation by Ministry of random walks was completely bogus -- not because I say so, but because I got an administrator to review what's been said on this page and done in the article itself. He lifted the block, and thanked me for bringing all of this to his attention.--Rgfolsom 16:09, 24 July 2007 (UTC)

Aside: it should be clear that I don't think the quote belongs. I only mean that I will not personally remove it from the article now that it's not a manifest violation of OR and SYN. There's a good argument that Poser is too unreliable of a source to justify such a large block invoking an off-topic quote from a highly respected commentator.

As for your eight-hour block, I think AGK was dead wrong to remove it. The blocking admin was correct. Disputes of supposed consensus do not justify breaking the rule: consensus is to be developed on the talk page. Cool Hand Luke 18:46, 24 July 2007 (UTC)

That you tricked one admin into removing a legitimate block by misrepresenting what happened on your talk page does not make the initial accusation--supported by at least one admin and multiple observers--bogus. As you've immediately resumed edit-warring despite the very clear talk-page consensus that the additions are inappropriate (and the best support you can find is an editor saying he "won't directly interfere" with the inappropriate addition), we'll see what happens now that I've notified WP:AN/3RR of your bad-faith resumption of the edit-warring. THF 16:32, 24 July 2007 (UTC)

We will indeed see what happens, just as we've seen what happened already when a fair-minded administrator takes the time to examine all the particulars. It's bloody obvious that shotwell and Cool Hand knew that the quote was properly sourced -- Cool Hand was telling me how to make sure the attribution was done properly. These facts, the obvious policy violation in taking down a relevant and properly sourced quotation, plus your name calling and incivility -- all of it will come into play as this dispute is resolved.--Rgfolsom 17:13, 24 July 2007 (UTC)

Observers might find poetic parallels in the accuracy of your invocation of Alan Greenspan on behalf of technical analysis on the one hand and your invocation of administrator Anthony and user Cool Hand Luke on behalf of your conduct on the other. There were multiple problems with the Greenspan quote; solving the WP:NOR problem by rewriting the section in the main text to make it clear that the interpretation was the idiosyncratic belief of a minor person in an unreliable source (which, incidentally, you have yet to do in your revisions) just demonstrates problems of WP:N, WP:RS, and Undue weight. The consensus remains to keep it out, and I hope for the sake of civility and cooperative editing you cease your disruptive attempts to revert. That you were fortunate enough to face a worse actor in a previous content dispute, and thus avoided scrutiny of POV-pushing in your WP:SPA edits, is hardly an endorsement from on high. THF 19:33, 24 July 2007 (UTC)

Experts needed?

...and yet this member of the MTA board, who is an expert on Technical Analysis, also has a graduate degree in economics and a post-graduate certificate in finance (plus undergraduate in mathematics and computer science). I spoke with a PhD today, who told me that I would be hard pressed to find a neutral academic. Either it will be one that supports TA, or one that is against it. Academics will not weigh in on something they have no knowledge of. So, then, we wind up with more he said/she said. In all honesty, I have no problem with removing the Greenspan quote, because I can see how one could misinterpret it as original research, even though it is not and I think it provides valuable insight. The article is less interesting without it, but at least it removes some of the silly stuff.

What is absolutely uncalled for is to use terminology such as charlatan, astrologer, chiropractor (which is pretty much accepted as a real alternative anyway, but wrongfully has a negative connotation among people who don't know better)when referred to a respected and increasingly academically supported field of study. Sposer 01:57, 21 July 2007 (UTC)

Excessive weight given to Efficient Markets Theory

I wanted to reiterate and amplify my concerns about the insertion of material pertaining to Efficient Markets Theory in the initial introductory portion of this article. Prominent placement of this criticism gives a negative weight to this article that in my view is contrary to WP:NPOV. I believe that the material on EMT obviously needs to be mentioned but not at this length and not so high in the article. --Samiharris 22:21, 22 July 2007 (UTC)

I agree with you that there is too much focus on the controversy in the introduction. I think that the introduction should make a brief mention of the controversy, since it seems to be a major thing. The rest of the material about controversy should be integrated into the article. shotwell 16:46, 23 July 2007 (UTC)

I trimmed as discussed above.--Samiharris 21:42, 24 July 2007 (UTC)

I agree that the introduction needs some work - it looks too much like an out-of-control back and forth. The intro should only state the outline of the basic facts of who says what. The EMH should not drowned out what TA says - what TA says should be the focus of the article. Nevertheless, when a method such as TA contradicts (to the extreme) a standard well-known academic theory, that theory should be mentioned throughout the article, at least in passing.

It should also be stated accurately. "Suggestive" which I have changed to "state" in the following and 1 other spot, is just much too weak. The "many academic papers" will likely be controversial among TA proponents here - but ask any financial economist, and I'm sure that they will consider the whole sentence to be accurate. Smallbones 09:39, 25 July 2007 (UTC)

Technical analysis has generated controversy among market participants and financial economists for decades. Critics include advocates of the efficient market hypothesis, who state that past price and volume data - or indeed any "old news" - cannot be used to profitably predict future prices.

Many academic papers contradict the validity of technical analysis, but a few support it.

I put my comment back the way that I wrote it.

It will be quite difficult to find a way to summarize the weight of the academic evidence on EMH and TA. The papers are numerous (though often they don't bother to directly mention TA), going back at least to the 1930's. They do have some grays in them: it is not all black and white. Nevertheless, I think that it's fair to say that 90% of the research goes against TA, and maybe 10% might be veiwed as supporting it. Others might say that it's 80%-20%, but that's about the extent of disagreement on this topic among academics. Is there any chance we could poll Wikipedian economists on this to get a more solid answer? Smallbones 08:56, 26 July 2007 (UTC)

Smallbones, where do you get 90%/10% or 80%/20%. First of all, before EMH, the markets were assumed to be inefficient, and were perfectly in compliance with the idea of TA. By going back to the 1930s to tally it up, is like including all the writings prior to Copernicus, 10 years after he figured out that the Earth was not the center of the universe. Please look at the recent evidence, not just the papers written back to 1930s. Like I said, I honestly went back to ssrn.com and could hardly find a paper written in the last 5 years that was negative on TA. This includes a survey on the subject. Sposer 14:06, 26 July 2007 (UTC)

Academic support or not

Many academic papers contradict the validity of technical analysis, but a few support it.

- To put in the lead that many papers contradict and some support is just plain not true. To make it that unbalanced, when recent research is favorable, can only be to promote a POV. For the time being, I am willing to stand by a more even appraisal, which I have provided until we can find a neutral party, whom I am 100% sure will finally put the naysayers in their place.Sposer 21:09, 25 July 2007 (UTC)

It'd be far far better to describe what the papers concluded and cite them, rather than just say they support or contradict the validity. I think this would also help eliminate the POV issues. shotwell 21:19, 25 July 2007 (UTC)

There is support for it, but it appears to be qualified support. Taking your suggestion to look into SSRN papers we find: technical analysis is not profitable on long time horizons technical analysis works only with immature markets technical analysis works for currency because of how large banks use stop-loss orders technical analysis not profitable unless underlying stock is illiquid Cool Hand Luke 21:41, 25 July 2007 (UTC)

And Candlestick TA doesn't work. And that Hsu/Kuan paper suffers from hindsight bias: if you test 100 rules, then 5 of them are likely to end up being "statistically significant" by chance.

Note also that there's a selection bias for SSRN. Most creditable economists don't waste time measuring TA because there's no academic prestige in stating the sky is blue. Academics are rewarded for surprising results, not the mundane ones. The definitive papers on TA were written forty years ago, have not been refuted, and aren't going to be on SSRN. THF 21:53, 25 July 2007 (UTC)

Too, a complete SSRN search would include a search for "random walk" (advocates of the well-proven random walk hypothesis necessarily disbelieve TA) and "efficient markets" (advocates of the efficient markets hypothesis necessarily disbelieve TA). THF 21:59, 25 July 2007 (UTC)

Finally, note that the Brandeis paper (Osler (2000)) repeatedly touted by Poser is far more ambiguous than Poser makes it out to be, as she does not test whether the strategies are profitable after transactions costs, only if they have some predictive power. THF 22:13, 25 July 2007 (UTC)

Introduction

Is there any agreement to just plainly remove the third and fourth paragraphs of the introduction? I'm saying this because:

1. They are not sourced ("many academic papers...", "The MTA believes the tide is turning...", "The conundrum for academia is..." all need citations).
2. They use overly dramatic language (e.g. "tide", "conundrum", etc..).
3. They introduce clear POV issues.
4. They provide hardly any real information; just bald assertions that sound as if they're ripped from a marketing brochure.

Any thoughts? shotwell 21:44, 25 July 2007 (UTC)

I agree. THF 21:56, 25 July 2007 (UTC)

Agree. Langauge was way over the top, unsupported, and POV. Cool Hand Luke 00:02, 26 July 2007 (UTC)

My edits and sources provide unimpeachable references and NPOV language. THF's reverts flagrantly disregard Wikipedia policies about reliable sources. The failure of other editors to object to this abuse will speak for itself. --Rgfolsom 00:16, 26 July 2007 (UTC)

Have you noticed that every third-party to look at this issue disagrees with your assessment of Wikipedia policies? Please recognize that you do not own this article, and edit collaboratively, and respect consensus. THF 00:21, 26 July 2007 (UTC)

Latest edits

I found it interesting that several editors seemed fine with a "citation needed" tag on a sentence like "Technicians have long said that irrational human behavior influences stock prices, and that this behavior leads to predictable outcomes," but saw no need to challenge the claim that "Many academic papers contradict the validity of technical analysis, but a few support it." As for the Nison reference, here’s what it says: Page 17: “Among the first and most famous people in Japan to use past prices to predict future price movements was the legendary Munehisa Homma. He amassed a huge fortune trading in the rice market during the 1700s.”

Page 18: “In order to learn about the psychology of investors, Homma analyzed rice prices going back to the time when the rice exchange was in Yodoya’s yard.”

On page 19, “His [Homma’s] trading principles evolved into the candlestick methodology currently used in Japan.”

There’s more, of course. Page 14 of the other Nison book quotes Homma: “When all bearish, there is cause for prices to rise. When everyone is bullish, there is cause for prices to fall.” Everything I’ve just added is properly sourced, relevant to this article, and consistent with Wikipedia’s policies. I remind editors of what the Arbitration Committee said in the Robert Blair decision: "It is inappropriate to remove blocks of well-referenced information which is germane to the subject from articles on the grounds that the information advances a point of view. Wikipedia's NPOV policy contemplates inclusion of all significant points of view. --Rgfolsom 22:42, 25 July 2007 (UTC)

THF has reverted sources and edits that are from top financial professionals and academics, with no explanation beyond a bunch of WP acronyms. That is not acceptable. --Rgfolsom 00:09, 26 July 2007 (UTC)

Each of the acronyms represents a policy that Rgfolsom's edits violate.

• WP:WEIGHT: "We should not attempt to represent a dispute as if a view held by a small minority deserved as much attention as a majority view. Views that are held by a tiny minority should not be represented except in articles devoted to those views. To give undue weight to a significant-minority view, or to include a tiny-minority view, might be misleading as to the shape of the dispute. Wikipedia aims to present competing views in proportion to their representation among experts on the subject, or among the concerned parties. This applies not only to article text, but to images, external links, categories, and all other material as well."

You stand the meaning of that quote on its head. This article is about Technical analysis -- by definition the majority are technical analysts, and authors and academics who write about it. And also by definition the critics are the minority -- unless you have reliable sources to show that critics comprise the majority of experts.--Rgfolsom 00:59, 26 July 2007 (UTC)

Again, your response greatly misunderstands the NPOV policy, and demonstrates why your version of the article fails to comply with NPOV. THF 01:48, 26 July 2007 (UTC)

The tags you put on the article fail to comply with the ability to answer my points. One op-ed harangue is a laughable answer to a request for reliable sources showing that critics comprise the majority of experts.--Rgfolsom 02:56, 26 July 2007 (UTC)

• WP:LEAD: Again, the additions are inappropriate in the lead paragraph. Legitimate criticism was deleted from the lead paragraph in contravention of both talk-page consensus and WP:LEAD. THF 00:19, 26 July 2007 (UTC)

The lead had NO sources cited for the criticism, until my addition of Fama.--Rgfolsom 00:59, 26 July 2007 (UTC)

• WP:NPOV: Again, the additions are one-sided and POV-pushing. Legitimate criticism was deleted from the lead paragraph. THF 00:19, 26 July 2007 (UTC)

See above. You (et. al.) have not added so much as one critic from a reliable source on the level of the references I cited.--Rgfolsom 00:59, 26 July 2007 (UTC)

• WP:RS: Sellers of TA products should be identified as such. Conclusions of academic studies severely misrepresented by text. THF 00:19, 26 July 2007 (UTC)

If I've misrepresented the authors' text, it should be easy enough for you to show quotes from the books and papers to that effect. As it is you (et. al.) keep reverting the Nison reference, even after I produced the quotes to back up what the article says. As for identifying people "as such," let's also do so for editors who use language like "horoscope" and "pseudoscience" to describe the work of respected financial professionals?--Rgfolsom 00:59, 26 July 2007 (UTC)

It is YOUR POV that TA is supported by a small minority. You present zero evidence of this, except for the work of an extremist, such as Fama. And, I seem to remember Fama evening softening some of his stance on EMH. I rewrote the introduction last week, and that seemd to stand with the only criticism of it by a third party and that person said it focused too much on the criticism of TA. Sposer 00:49, 26 July 2007 (UTC)

It is a fact that TA is supported by a small minority, and that respectable economists and financial analysts pooh-pooh it. Cf. the Financial Times op-ed paragraph reprinted above. THF 01:48, 26 July 2007 (UTC)

AOL chart and article in general

Cool Hand Luke - I agree that we need a citation. I wish I was more up on the studies. I have seen work that clearly shows that markets trend, especially over longer timeframes (the opposite conclusion of some academic papers that suggest that TA may work in shorter time frames, but not longer time frames). The reference for the chart is not clear there, but refers to the earlier in the article explanation that the market is trending down. As I said earlier, the view of THF, Smallbones and Ministry of Random Walks is that the consensus (not theirs, but the market and academia) is that EMH is correct, Random Walk is correct, and therefore technical analysis is not. Unfortunately, as you can see even in the EMH article, there is plenty of controversy as to the correctness of EMH. Furthermore, Fama allows for his own anamolies (market cap, value vs. growth I believe) and is an advisor in a fund with his frequent co-author, Kenneth French.

I do not understand why the TA article needs to represent a view that just does not exist. I worked on trading desks for years and nearly all traders used technical analysis to some degree to help them time entry and exit, some for long term and some for short term. Fidelity has a whole department dedicated to technical analysis. I could contact a few academics that I know, but folks like THF will say they are not reputable. Their logic? Because they support TA. Technical analysis is now taught as part of the MBA curriculum at many universities, and the list grows every day.

We are being required to defend against an opinion that TA is in the minority, when there is absolutely no evidence except to the opposite. Assertion via an op ed piece proves nothing. There are people that say TA is wrong, but use it, and call it another name. It is THF's POV that TA is not accepted. I cited a paper in an earlier version of this article that was written because the academics could not understand why so much time and money were spent on technical analysis. That suggests that TA is the majority view, not the minority, at least in the markets. Their conclusion was that it was at least of some use (though I do not remember how much). RGFolsom and I (and another who felt I was too negative on TA in my earlier attempt at a compromise) are trying to come to an amicable resolution, but the others only accept arguments from those that agree with them.

I suspect that MIT, Brandeis (not just Osler), Notre Dame, the Univeristy of Wisconsin, the London School of Economics and countless other universities should be warned by THF that their professors are not reputable since they have published papers that support technical analysis.Sposer 02:00, 26 July 2007 (UTC)

It's also obvious that THF (et. al.) don't even understand academic research, specifically that the findings are always couched with every possible exception and qualifier: the more understated the claim, the less open it is to a challenge. That said, scholars at Ivy League schools and other blue-chip universities would not be producing a steady flow of studies about horoscopes -- but they do produce plenty of studies about technical analysis. And when you read beyond the qualifiers, a lot of that research says "We see promising things..."--Rgfolsom 02:56, 26 July 2007 (UTC)

Yes, there are qualifiers, but some of them appear to be devastating. Of the papers in SSRN I cited above, this one on illiquid stocks suggests that TA works for almost no stock. And interestingly, the fact that it only appears to work with poor liquidity is probably consistent with EMF. Their introduction is also telling.

Technical analysis continues to prove very popular with practitioners despite the majority of academic studies finding it does not produce profits that are large enough to compensate for the transaction costs incurred. . . .

It seems that a lot of the research is an attempt to explain why large investors put so much effort into TA to begin with. The Park/Irwin literature review is similarly devastating in its qualifications. They note the positive results on one hand, but methodological flaws on the other. They moreover claim there is no evidence for successful TA in US stock markets since the early 1990s. They seem to agree with THF that most academics reject TA. It also seems that many of the theories purporting to explain success are made to be consistent with EMF (for example: market inefficiencies and central bank intervention). It therefore seems that even researchers who get positive results would prefer to retain EMF.

But I'm more concerned that the argument sections under EMF and random walk might be OR. Academics don't seem to attack EMF the way that this article suggests that technicians do. Seeing an example of these arguments would be helpful. Cool Hand Luke 14:27, 26 July 2007 (UTC)

There are lots of strong critiques of the EMH/Random walk. Daniel Kahneman and Amos Tversky's "Prospect theory" paper in 1979 helped launch the behavioral finance school, which was further pushed along by Robert Shiller's paper in 1981, "Do stock prices move too much to be justified by subsequent changes in dividends?" This web site includes academic critiques of the EMH going back to the early 1990s.

Here's a sample quote from Harvard economist Andrei Shleifer's book Inefficient Markets: An Introduction to Behavioral Finance:

"…the second line of defense of the efficient market theory is that the irrational investors, while they may exist, trade randomly, and hence their trades cancel each other out. It is this argument that the Kahneman and Tversky theories dispose of entirely. The psychological evidence shows precisely that people do not deviate from rationality randomly, but rather most deviate in the same way. To the extent that unsophisticated investors form their demands for securities based on their own beliefs, buying and selling would be highly correlated across investors. Investors would not trade randomly with each other, but rather many of them would try to buy the same securities or to sell the same securities at roughly the same time. This problem only becomes more severe when the noise traders behave socially and follow each other's mistakes by listening to rumors or imitating their neighbors (Shiller 1984). Investor sentiment reflects the common judgment errors made by a substantial number of investors, rather than uncorrelated random mistakes."

Aaronson's Evidence-Based Technical Analysis explains why Behavioral finance theory serves the practice of technical analysis, especially the chapter on "Theories of Nonrandom Price Motion."

Hope this helps.--Rgfolsom 15:43, 26 July 2007 (UTC)

NB that that passage has nothing to do with technical analysis, and that, in any event, Tversky is controversial. Refuting EMH (and the weaker version, random walk hypothesis), is necessary, but not sufficient for TA to be non-quackery. Luke's review is spot on: EMH is mainstream thinking, and thus needs to be reflected as such in this article. (Note, for example, that the entirety of American securities law theory is based on EMH, and noone has tried to get around a "fraud on the market" charge and overturn Basic v. Levinson by arguing that EMH is incorrect.) THF 15:54, 26 July 2007 (UTC)

Speciousness and insults, as usual. The Shleifer passage isn't about technical analysis because I was responding to Luke's request for critiques of the EMH, which IS what the passage is about. Instead of typing out your screeds on this page, your time might be better spent reading Kahneman's acceptance address of his Nobel Prize. Prospect Theory itself was hugely controversial when it first published, because it challenged EMH orthodoxy -- yet nearly 30 years afterward, Tversky would have shared Kahneman's Nobel had he been alive. As for Basic v. Levinson, only a lawyer would advance the fiction that Supreme Court precedents have a shred of relevance to debates over competing theories of finance among academics.--Rgfolsom 17:01, 26 July 2007 (UTC)

I'm arguing nothing of the sort. I'm arguing that close-to-unanimous legal academic consensus has a great deal of relevance to WP:WEIGHT. The mainstream may be wrong, but Wikipedia does not care if you are correct that it is wrong or that I am correct that it is correct. Wikipedia policy is to recognize the mainstream view as the mainstream view, rather than to deduce the truth, and even the legitimate papers you cite recognize that the validity of TA is a fringe academic view. The only people you cite to the contrary are selling TA books, and are not especially credible. THF 18:04, 26 July 2007 (UTC)

Most of your posts here include insults ("quackery") and sneers ("not especially credible"), as if an abundance of drivel will obscure the fact that you have yet to cite a reliable source that concurs with (much less quantifies) your assertions of what is "mainstream." As I said before, the portfolio manager you quoted whined about technicians on business TV, which by definition IS mainstream!

The behavioral finance school now includes Nobel laureates, peer-reviewed research journals, tenured faculty at the best universities, and hundreds (maybe thousands) of published studies. Look here to see the growing mentions of behavioral finance vs. declining mentions of efficient markets.

To the extent that there is a mainstream among academics, the least one can honestly say is that it includes at least two major schools of thought.

Furthermore, "mainstream" is not confined to academia. The Wall Street and financial community includes people who actually use the methods -- and I've cited reliable sources which show that technical analysis is a common method. Then there's the media, e.g., "Business television shows trot out one technical analyst after another to tell you how to invest, based on resistance levels, moving averages, momentum and buy/sell signals."

"One technical analyst after another" indeed. If business TV never included any technicians, would you say technical analysis is not mainstream?--Rgfolsom 19:55, 26 July 2007 (UTC)

In the second blocks of the EMF/random walk sections, every line is a reply in a kind of dialog. I find some of these moves very dubious. The quote you reproduce above supports this line: "EMH advocates reply that while individual market participants do not always act rationally (or have complete information), their aggregate decisions balance each other, resulting in a rational outcome (irrational optimists who buy stock and bid the price higher are countered by irrational pessimists who sell their stock, until the price reaches equilibrium)."

I even take issue with this, because your quote is a characterization from an opponent. It seems to me that an EMF theorist would say something even stronger, like that prices could never get irrational beyond transaction costs because the irrational gap would be exploited and eliminated by rational players. I must admit that I'm an outsider with no economics background, but it seems to me that this is the essence of EMF. A behaviouralist would have to then argue that rational traders are not capitalized well enough to counter the herd, which would be at least a little counter-intuitive because rational traders would be expected to outperform in the long run. Who does Shleifer cite as offering this "second line of defense"? Cool Hand Luke 23:40, 26 July 2007 (UTC)

Let's Please Be Clear on the Truth About "CMT"

Several posts above, someone asserted that: "the professional designation for technical analysts Chartered Market Technician CMT is now recognized by Wall Street's two primary self-governing bodies, and by the U.S. Securities and Exchange Commission."

This is simply not true. The self-governing bodies have ONLY recognized the CMT Level 1 and CMT Level 2 exams themselves. They have NOT recognized the CMT designation, which signifies completion of all 3 levels of CMT testing. — Preceding unsigned comment added by Happytech (talk • contribs)

I deleted Happytech essay

for violations of the no original research policy; this edit shouldn't be controversial, but feel free to discuss here if there's any question about it. THF 22:11, 26 July 2007 (UTC)

I guess I was wrong, because Happytech reverted without discussion on the talk page. I'll request some other editor to delete; I've already referred the editor to the WP:NOT#OR essay. THF 22:17, 26 July 2007 (UTC)

This is Pure Cencorship -- Everything You Deleted is 100% Verifiable

Please point out the specific "unverifiable" parts that caused you to delete the entire section. I assure you beyond a shadow of any doubt, that there is 100 percent validity. Please share your specific issue so that I may correct it properly. Please do not make me play guessing games as to which parts fit your definition of "PC". Thank you.

100000% verifiable, top to bottom. I await your specific complaints

Definitional Ambiguity

Different people attach different and usually imprecise meanings to the term "technical analysis." Even some of today's most prominent and visible ambassadors of technical analysis, have very different definitions for technical analysis. In addition, those organizations whos missions include education of the public have used the term technical analysis to refer to a wide variety of phenomena, including, but not limited to: the study of fundamental data, the study of astronomical data, the study of cycles and patterns in nature, and others.

Examples of the above claims are as follows. The 1998 Dow Award, the most important recognition in the field of technical analysis, was given to a paper which shows fibonacci time relationships with the lunar cycles between major market tops and bottoms, including a discussion of the impact of "full moons." Even though the subject of "valuation" is universally recognized as the traditional purview of fundamental analysis, the largest US based organizing body for technical analysis includes the subject of "valuation" under its "list of indicators." Similarly, candidates studying for the CMT exam program, the only technical analysis exam recognized by the SEC, are expected to know and understand the book "Irrational Exuberance" by Robert Shiller, which deals specifically with the subject of fundamental market valuation.

Definitional ambiguity over the term "technical analysis" has never been publicly or officially addressed by the field's leaders, or by its professional organizations. One result of this, is that public perception often associates technical analysis with astrology. For example, a Google search turns up the following comparative results.

• 28,700 for -- "technical analysis" and "planets"
• 29,600 for -- "technical analysis" and "astro"
• 72,200 for -- "technical analysis" and "astrology"

These results contrast markedly when the same test is run against technical analysis's closest rival, fundamental analysis:

• 522 for -- "fundamental analysis" and "planets"
• 620 for -- "fundamental analysis" and "astro"
• 766 for -- "fundamental analysis" and "astrology"

Given the wide range of phenomena studied by technicians, and the wide range of individuals and organizations involved, it should be emphasized that simply having information on or researching a particular subject, does not imply that it is a “technical analysis.” The term “technical analysis” therefor must be used judiciously and with an acute awareness of its ambiguity and limitations.

These are very amusing google results, but I'm afraid this work is original research. See WP:OR. Original research may be verifiable, but Wikipedia is an encyclopedia and hence not a publisher of original research or synthesis (see also WP:SYN.) Cool Hand Luke 22:43, 26 July 2007 (UTC)

NOT research

Virtually no one disputes that there is widespread public perception linking technical analysis and astrology. If this is the only section (the Google results) that bother you, then please, can you give an example of how these facts can be included in this article, in an acceptable format.

You publish an article in a reliable source that cites these numbers and reaches these conclusions. Then we can include it, although we must still be careful to avoid giving this information undue wight. Cool Hand Luke 23:35, 26 July 2007 (UTC)

Given your reluctance to permit the truth, and to cencor facts you disagree with, it's no bloody wonder that this article has been rated as Start-Class on the project's quality scale. Do you also aspire to Christ-like martyrdom, just as the real Cool Hand Luke did.

No, but what we have here is a failure to communicate. Our policies are not about truth, but about being an encyclopedia. Reputable encyclopedias simply do not publish new primary research. We strive to be an accurate synopsis of the reliable work already published. Cool Hand Luke 00:39, 27 July 2007 (UTC)

WHY ARE YOU PREVENTING THESE FACTS?

The 1998 Dow Award, the most important recognition in the field of technical analysis, was given to a paper which shows fibonacci time relationships with the lunar cycles between major market tops and bottoms, including a discussion of the impact of "full moons."

https://www.mta.org/eweb/docs/1998DowAward.pdf