Talk:Technical analysis

Mislabeling of Point & Figure

Point & Figure charting is redundantly listed twice under the general heading "Charting Terms & Indicators." It is listed as both a "concept" as well as "type" of chart. Moreover, the abstract general idea or concept that is signified by the word "Point & Figure" must be, by definition of the word "concept," a collection of those characteristics which are common to all types of charts. It is quite proper to list Point & Figure as a "type" of chart. It is not proper and is in fact incorrect to label it as a "concept." Why are you disallowing this correction? —Preceding unsigned comment added by 99.10.168.190 (talk) 15:47, 27 January 2010 (UTC)

For example, the abstract general idea or concept that is designated by the word "red" is that characteristic which is common to apples, cherries, and blood. The abstract general idea or concept that is signified by the word "dog" is the collection of those characteristics which are common to Airedales, Collies, and Chihuahuas.

The abstract general idea or concept that is signified by the word "point & figure" is the collection of those characteristics which are common to....??? —Preceding unsigned comment added by 99.10.168.190 (talk) 15:54, 27 January 2010 (UTC)

To be honest, I missed the spot it was put in and didn't notice that it was duplicative. At this point, the discussion should be with TradingBands. It should be in one place or the other.Sposer (talk) 18:52, 27 January 2010 (UTC)

Ok thank you. Let us keep it under "charts" and removed it from "concept." —Preceding unsigned comment added by 99.10.168.190 (talk) 20:26, 27 January 2010 (UTC)

Mr TradingBands can you please support your claim. What collection of characteristics signified by the term "Point & Figure" is common to all charts? For example. Momentum is a concept shared by all types of charts. Support and resistance are concepts which are shared by all charts. P&F is a TYPE of chart. But why should P&F be labeld a "concept" and not, for example, standard OHLC charts, too? And why do you insist on duplicative entries? --99.10.168.190 (talk) 00:00, 28 January 2010 (UTC)

Sure, P&F charts are a type of chart, but the concept of P&F extends well beyond charts into the realm of pure price analysis. It is unique in this regard in TA. (Some rare types of swing charts also ignore time.) So, you have two parts and thus two entries, a charting technique and a timeless -- literally -- approach to price and indicator analysis. As for the naming, that was done more than 100 years ago and we live with those naming conventions. TradingBands (talk) 21:34, 3 September 2010 (UTC)

John Murphy

John Murphy is not an Economist by trade. According to his bio, he is most well known as a technical analyst and book author. See: http://stockcharts.com/help/doku.php?id=support:about_john_murphy

However when I change the Wiki to reflect these facts, someone keeps changing it back. —Preceding unsigned comment added by 99.10.168.190 (talk) 21:36, 25 January 2010 (UTC)

Just what discipline do you think financial market analysis belongs to? He even has a degree in economics. Being a book author has never disqualified anyone from being an economist or any other professional. Financial institutions hire economists to do their market analytics. Kbrose (talk) 00:36, 26 January 2010 (UTC)

Sorry, but he would not consider himself an economist. Just ask him. When I was sitting on a desk, I called myself a financial markets analyst. I have a degree in economics. I did not consider myself to be an economist. I know John personally. I am pretty confident he would blanch at the thought of being called an economist.Sposer (talk) 01:34, 26 January 2010 (UTC)

It's almost laughable that anyone would even try defend themselves on the question of whether John Murphy is an economist. Donald Trump has a degree in Economics. Does that make him an economist? Gloria Estefan has a degree in Psychology, does that make her a shrink? —Preceding unsigned comment added by 99.10.168.190 (talk) 04:25, 27 January 2010 (UTC)

Article needs some organizing

Whats the difference between Principles, Characteristics and General Description? We have three sections with virtually the same title. We need to combine and sort these out. Any suggestions?-- — Kbob • Talk • 21:35, 17 October 2009 (UTC)

I agree with these comments. --99.10.168.190 (talk) 23:47, 27 January 2010 (UTC)

False sourcing of statements

(I last commented on this talk page on the same subject back in sept 2007. That comment is no longer visible, but the error still stands)

None of the quotes attributed to Warren Buffett are available from the link given as source - (Warren Buffett has said, "I realized technical analysis didn't work when I turned the charts upside down and didn't get a different answer" and "If past history was all there was to the game, the richest people would be librarians."). A quick non-exhaustive search turns up one reference from the year 2000 to the librarians-quote, here, but I'm less sure of the tech analysis charts quote. A similar use of Google Timeline to find its first use results in a fool.com article from 2008, that is, after the quote appeared here.

Please comment below. Troed (talk) 16:40, 28 December 2009 (UTC)

Found my earlier comment, will let it stand since it documents for how long these uncited quotes have been left without action. I'll correct this in two steps and document how here. This page seems to be seldomly updated, but I don't want another 2.5 years to pass before something happens. I will start by removing the listed reference since it does not contain the quotes in question, and replace with [citation needed] for a few days/a week or so. If no one has made any comments or added references by then I will remove the quotes altogether, after having done another attempt to find them myself. Troed (talk) 13:38, 30 December 2009 (UTC)

Oh my. While not applicable to the above (verified by checking earlier versions) I see now that there are serious problems with references at this page. The section just below the one I edited contains a sentence obviously meant to reference Brock et al - reference numbered 12 at the moment - but instead links to reference 30. It seems prudent to look into this further and I will likely do so when correcting the above quotes. —Preceding unsigned comment added by Troed (talk • contribs) 15:51, 30 December 2009 (UTC)

Adding links to the article

Though the external links section asks us not to include links in this article, I thought that the following links would provide useful contents with respect to Technical Analysis. Introduction to Technical Indicators and Oscillators on StockCharts.com I do not understand why links should not be added. I feel that links serve as verifiable references even though it has not been used for a reference to a particular instance of information. Diptanshu^Talk 10:29, 7 January 2010 (UTC)

The issue is that this is a commercial web site and that is not permitted. I am removing for now, but let's see what some other editors say in response to your link. If we get a great hue and cry, we can think about it.Sposer (talk)` —Preceding undated comment added 11:21, 7 January 2010 (UTC).

Drummond Geometry

Ted, Drummond Geometry is known by very few people. The book you are referencing is only available through people, like you, who are selling the information and classes. Unless something has changed, the product is extremely expensive. Because Drummond is not available to the whole world, freely, and is not part of any TA Body of Knowledge, it really does not belong in this article.Sposer (talk) 15:49, 13 January 2010 (UTC)

Hi Sposer,

well...yes, Drummond published his books privately, and I agree that the methods should be wider known. But even if we take these two reasons as valid exclusionary criteria (which I would dispute) my second supporting reference is to a recent book published by Bloomberg Press, which is freely available and is neither expensive nor exclusionary. and which places Drummond solidly in the mainstream of TA and is edited by the chair of the New York Region of the Market Technicians Association. Certainly this belongs in an article about technical analysis. In addition there are a number of articles that have been published in various professional TA magazines discussing the fundamentals of Drummond Geometry that are all in the public domain. Furthermore the cost of the methods have been dropping and the entry level software and education is now $250, which cannot be said to be extremely expensive nor exclusionary.

I suggest that I take your point regarding the first edit that you made and the second edit supported by the Bloomberg Press book be restored.

best regards Tedtick

Tedtick (talk) 17:49, 13 January 2010 (UTC)

Both Sposer and Tedtick have valid points. Per Wikipedia:Verifiability, an exhorbitantly-priced book that isn't even likely to be available in libraries is a poor source because it isn't verifiable by the general population.

However, Drummond Geometry is notable. Few technical traders know the details, but I would bet that most technical traders have heard of it. It is also mentioned or described in many widely-available books (some of which are considered 'classics' such as Pruitt & Hill). I think it's notable enough to warrant its own article, and one has been created recently, so it is not wrong to mention it in this article. The text that is sourced to something verifiable should be restored. ~Amatulić (talk) 17:57, 13 January 2010 (UTC)

I had missed the chapter in Dave's Bloomberg book (I had a chapter in the earlier edition). I am not really convinced that pl dot is notable, since it is used probably less than market profile, which is far more notable (and not used very much I am told either). It might desrve a "see also", if there is an article on it. I am not going to kill it for now, because I am not into policing this article. But, it is not currently part of the MTA Body of Knowledge, and is right now not widely known, which makes it hard to suggest belonging in this article, which should really only talk about the most widely used tools. I will need to look at the article in the book, and find some magazine articles, to see if there is enough info to make it meaningful enough to keep. Still, this article should really only refer to the most widely used methods, and Drummond barely registers. Let's see what other editors say. I will give Dave and Robin M. a call on it when I have a chance. Ted should have mentioned his COI, and if you sell it too, you should let us know as well.Sposer (talk) 23:06, 13 January 2010 (UTC)

I think you're right about the PLdot and other specifics (honestly, I didn't read carefully the text I restored; I restored it on the basis of having a verifiable and reliable source). I have no COI -- I don't even own any Drummond stuff but I have reviewed material that a friend bought some years ago, and found it incredibly complicated. Nevertheless, I do see it mentioned in books, some of which I consider notable books on technical analysis, so in that sense Drummond Geometry is widely known about, not widely known, because it's widely mentioned.

I'm not sure that presence in the "MTA Body of Knowledge" is meaningful in the context of this article. ~Amatulić (talk) 19:25, 14 January 2010 (UTC)

MTA is the main professional organization. I think it is relevant. Be that as it may, I do not think it is in any of the major books: Murphy, Pring, Edwards&McGee, Kirkpatrick/Dahlquist. The article is not about indicators, but TA itself. I am not taking Drummond out, but this article should not become a link farm for everybody's favorite indicator.Sposer (talk) 01:37, 15 January 2010 (UTC)

Which Indicators to Present in the Main Article

Only mainstream indicators, tools and techniques that are widely used and widely available ought to be presented in a generalist TA article. Presenting odd or niche indicators, tools and techniques only serves to obfuscate when our goal ought to be to inform and enlighten. Hence, I agree with Dee Dee's deletions. TradingBands (talk) 23:45, 3 September 2010 (UTC)

In line with the above, I propose the removal of the PAC chart and Strat indicators from the main article. I'll do so in a week unless discussion intervenes. TradingBands (talk) 15:34, 14 October 2010 (UTC)

Completely agree. Sposer (talk) 23:47, 14 October 2010 (UTC)

Done. TradingBands (talk) 18:27, 18 October 2010 (UTC)

Random Walk Hypothesis

For NPOV's sake I removed some extremely strong statements added recently such as the following (emphasis added):

The random walk hypothesis - now refuted - may be derived from the weak-form efficient markets hypothesis

positively proving the random walk does not exist and never has. Several years passed before the acadmics finally and reluctantly admitted they were right.

It is patently obvious that prices mostly trend, which randomness would not support.

The random walk hypothesis article does not seem to support such bold claims (although it does discuss Lo's paper as evidence against RWH), so I toned them down in this article. Can anyone provide some enlightenment on whether the RWH has been conclusively disproven as the author (User:JMcGoo I think) asserts? Destynova (talk) 10:47, 12 October 2010 (UTC)

Although I would argue that anybody that is willing to look at the evidence would agree with User:JMcGoo, the majority of the sadly misinformed world of academia, and even many non-academics, would disagree with those assertions. Those assertions are not backed by academic consensus. If there is a source that shows consensus that Random Walk is no longer considered valid, I would be more than pleased to include it. There is growing believe in that, although less so for EMH in general. They are not the same. Sposer (talk) 21:15, 12 October 2010 (UTC)

The statements quoted above are indeed POV and incorrect. The random walk hypothesis isn't derived from the efficient markets hypothesis. It's the other way round.

There are reliable sources, such as the book Chaos and Order in the Capital Markets by Edgar Peters, and A Non-Random Walk Down Wall Street by Andrew Lo and Craig MacKinlay, that soundly refute[1] the hypothesis that the market's behavior is a random walk -- and this is clearly demonstrated by anyone by plotting a distribution of returns and observing that the distribution is not gaussian (whereas a gaussian distribution can't be avoided in a random walk). ~Amatulić (talk) 16:19, 13 October 2010 (UTC)

This is a common misconception -- a random walk need not involve Gaussian increments. Btyner (talk) 01:32, 4 December 2010 (UTC)

What misconception? Nobody has claimed that gaussian increments are required. A random walk does, however, result in a gaussian distribution of returns, and the increments themselves need not be gaussian. ~Amatulić (talk) 02:10, 4 December 2010 (UTC)

You said "a gaussian distribution can't be avoided in a random walk". Can you please elaborate on this statement? Btyner (talk) 22:38, 5 December 2010 (UTC)

Actually, most of Magoo's points are correct, even if the volume was a bit high. Random walk has been disproved in dozens of papers and much of the edifice of Modern Portfolio Theory is crumbling under an onslaught of reality. However, the proof you seek comes not from papers, but from the massive exodus of Phds and academicians from the academy to Wall Street. Thus the very people who taught the theory now seek to take advantage of the consequences of the acceptance of their teachings by the masses. Really quite a fine game! TradingBands (talk) 16:14, 19 October 2010 (UTC)

I think the edits made by Destynova are correct, in that they removed POV adjectives and wording. If anyone wants to add something on that topic to the article please feel free but please also make sure it is backed up by a reliable secondary source and not an editor's self knowledge. Thanks to all who are working to improve the article. Cheers!-- — Keithbob • Talk • 22:27, 19 October 2010 (UTC)

Cycles

The cycles topic in the main article is most welcome and long overdue. Unfortunately, there is no matching Wiki article. Would someone please start one? TradingBands (talk) 17:15, 5 November 2010 (UTC)

Recent Removals

Not sure what to do about industry section. I added a reference from FINRA regarding MTA/CMT. Not sure what kind of articles exist.

For the history tends to repeat itself, that is common knowledge and is a sentence in almost every single book on the subject and there is no way it should be removed. The evidence/rule based work is covered in multiple of the referenced books (Aronson, Kaufman, Murphy). I do not have time to find exact page references. That statistical evidence section cites a paper, and academia is clearly more and more in line with the idea that TA is of value (and the market are neither random nor efficient). The use section refers to books written by the people that cover the topics and should not be removed. Sposer (talk) 21:12, 24 February 2011 (UTC)

Sorry, no. Full citations with page numbers are needed for verfiability. Simply mentioning the book title is not sufficient. Yworo (talk) 01:05, 25 February 2011 (UTC)

Why did you not simply add a {{cn}} tag to the material you are challenging to give other editors a chance to provide citations? That is the standard practice. Nothing is gained by arbitrarily removing the material from sight, leave it where it can be seen and discussed. --CliffC (talk) 02:31, 25 February 2011 (UTC)

Because the sections and other material removed were (mostly) already tagged. Plus I happen to agree with Jimbo that

"I can NOT emphasize this enough.

"There seems to be a terrible bias among some editors that some sort of random speculative 'I heard it somewhere' pseudo information is to be tagged with a 'needs a cite' tag. Wrong. It should be removed, aggressively, unless it can be sourced. This is true of all information ..." [2]

Yworo (talk) 16:56, 25 February 2011 (UTC)

Personally, I removed content which had been added to the article with {{cn}} tags. That's a very bad thing; it's perhaps understandable that content gets added to articles without source, but when content gets added with a tag that says "I know there's no source, somebody else expects a source, I haven't found a source but I'll add the content anyway" - that's very hard to reconcile with WP:V.— Preceding unsigned comment added by Bobrayner (talk • contribs) oops, sorry I forgot to sign - bobrayner (talk) 17:26, 25 February 2011 (UTC)

Every sentence cannot have a tag on it. You removed basic statements that are in virtually every technical analysis book. You also removed an item that said that there is increasing evidence that TA added value and there was a paper referenced. You can't just remove stuff because you don't like it. I could probably have sourced some of the items from my own book, which is RS, but felt it was not appropriate. I don't have time to source every sentence, and you have removed much TA 101 and History of TA, making the article far less valuable to readers, and probably less correct. I have edited this article over the years, and removed spam, items that were even correct if I thought they were too biased, etc. Some of the items you removed needed cleaning up, but none were wrong. You should not remove text just because of citations, if you are not initimately familiar with the subject or subscribe to a school of thought (not accusing you of this) that disagrees with the article. I do see some was added back (the paper and industry sections by you and others), which is appreciated. I will attempt to get cites for others later. Good faith would place much of what you removed back as there is nothing controversial in there. I should add that though the paper provided evidence, the edit made is misleading, since it sounds as if it is the only paper that says so. There are 100s of papers from academia that show TA of value, some of which note the rightly removed interpretive statement.Sposer (talk) 11:09, 25 February 2011 (UTC)

Any editor may remove unreferenced material. It is edit warring to put it back without citing it. See WP:BURDEN and WP:BRD. Yworo (talk) 16:55, 25 February 2011 (UTC)

While its true an editor "may" remove unsourced content it is usually more appropriate to place a cite tag there and wait a few weeks to see if an editor can produce a source, meanwhile the tag alerts the reader that the text is not referenced and that it's accuracy may be in question. Regarding this specific instance, Sposer says it's a statement in almost every technical analysis book, so why not cite the text and end this discussion?-- — Keithbob • Talk • 18:03, 25 February 2011 (UTC)

Not according to Jimbo, quoted above. Most of the material I removed had already been tagged some time ago and so far no citations had been provided. Someone with the sources is welcome to cite. I don't have them. Yworo (talk) 18:10, 25 February 2011 (UTC)

Thanks, Yworo. If the content had been tagged for some time than I agree removal is an valid option.-- — Keithbob • Talk • 18:13, 25 February 2011 (UTC)

Most of the section had been requested to add cites. I never said otherwise. I really don't have that much time for this. Much of the article though was common knowledge and in intro sections of any book on TA, which is why I didn't think there was a need to cite. Two items were cited, but removed anyway. I didn't know how to cite the industry info, since that is typically not written about anywhere, and requires, in most cases, using the actual organization as a source, which obviously can be questionable. I found quotes in a book I had, which surprised me, and found an order for a regulatory exception that highlghts at least some of the industry info. At this point, almost everything Yworo removed has been put back. I think the only items that are missing are sort of inside baseball and not terribly important (i.e., do technical analysts prefer to be called technical analysts, technicians or chartists). That is largely opinion anyway and I had considered removing it in the past. I don't have time to find a source giving credit for "the trend is your friend". That provides color, which makes the article more interesting, but doesn't add a huge amount of value. I am willing to bet we can find that quote attributed to many different people. I think we should re-cite request the bit about trading with the trend being more profitable. I believe RS sources it exists somewhere for that statement, but to be honest, I do not know where. We also need to fix the section on the paper saying that TA is of value, as though it is cited, it is currently misleading. There are 100s of papers saying that TA works(and 1000s saying otherwise). It should not be presented as a lone article, but it shouldn't imply proof that TA works, regardless of which camp you are in. The rules-based section needed work, but was correct, and currently remains out of the article, which is a pity. I only have very old editions of books that could be cited for that, though the Aronson book that is cited elsewhere in the article is essentially a whole book on the subject. That is not my expertise, so hopefully somebody else will provide a cite so that we can put the article back to the way it should be.Sposer (talk) 20:11, 25 February 2011 (UTC)

One final note. There was no edit warring. I reverted once, because the cites were not up there very long and because they are largely common knowledge. Once it got reverted again, I did not put back anything without a cite, although those were removed again by Yworo. In fact, he made more than reverts and would be guilty of 3RR. Everything I put back, after the first revert, was cited.Sposer (talk) 20:16, 25 February 2011 (UTC)

The things that were cited and inadvertently removed were restored yesterday. Don't you even look at the article before discussing? Other than that, all I can say is there is no hurry on Wikipedia. Per Jimbo, it's better to have nothing than uncited material. Finally, I did not break 3RR in any way and I insist that you retract that accusation. Unbroken series of edits count as a single edit for the purpose of 3RR. Yworo (talk) 20:18, 25 February 2011 (UTC)

If I miscounted, I apologize, but you removed the material, I added it back. You reverted my revert. I cited material and returned it, and you reverted it again. That seems to be three. If I am missing something or should not count the first revert, then I truly do apologize. However, you accused me of edit warring, which according to the edit warring link you cited, I did not. I stood down and cited only after your revert of my one revert. Furhtermore, you cited WP:BURDEN, which suggests that the cite requestor/material remover might want to look for cites themself. The statement about uncited material I thought was referring to false material, and is really opinion. Most of the material you removed was verifiable, as I did find cites in minutes, once I looked. Although you accused me incorrectly of edit warring, I do not seek an apology. It was an honest mistake.Sposer (talk) 20:47, 25 February 2011 (UTC)

I never accused you of anything. I simply made a statement that restoring material removed by another editor without improving it could be considered edit warring. You weren't mentioned or accused. Finally, when one reverts, then continues to work on the article to correctly integrate material, then the whole series of edits is taken as one, which in total is not a revert. Since after my initial edits, I only made three series of edits (one interrupted by Amatulic while I was still working on it), and the last series contained no reverts, I could not possible have broken 3RR which requires four reverts. Yworo (talk) 20:51, 25 February 2011 (UTC)Yworo (talk) 20:51, 25 February 2011 (UTC)

The Jimbo "quote" above can be found in its entirety at WP:BOP:

Any material lacking a reliable source directly supporting it may be removed. How quickly this should happen depends on the material and the overall state of the article. Editors might object if you remove material without giving them time to provide references. It has always been good practice to make reasonable efforts to find sources yourself that support such material, and cite them. Do not leave unsourced or poorly sourced material in an article if it might damage the reputation of living persons or organizations, and do not move it to the talk page.[emphasis added]

--CliffC (talk) 20:54, 25 February 2011 (UTC)

That's not a quotation of what Jimbo said, it's a quotation of the current policy wording. I provided a link to where he said it, here: "It should be removed, aggressively, unless it can be sourced." The original quote simply says that this is particularly true for material about living people, it does not exclude other material. Again, the rule is that a person adding or restoring material to an article must provide references. As I don't have sources handily available while the other editor does, removing the material seems to be the best way to get it cited. Yworo (talk) 21:01, 25 February 2011 (UTC)

NPOV

This article doesn't seem to do justice to EMH or RWH. It doesn't at all mention the strong, semi-strong, or weak variants, and when claiming it has been shown to be false doesn't state which version was so shown. Also, it doesn't mention that Malkiel doesn't say that trends cannot sometimes be predicted. He says that given the costs of trading, the amount of prediction that can be made does not result in making more money than investing in an index. These costs are not just commissions, but bid/ask spread, market action, etc. None of this is mentioned in the article: the opposing positions need to be made more accurate and detailed. Yworo (talk) 02:30, 1 March 2011 (UTC)

Please self-revert the "dubious" statement since that is your interpretation. The detailed review of EMH belongs in that article. Lo wrote a whole book debunking Random Walk in the late 1990s. There is no need to identify which form of EMH he questions, since there is nobody that believes that the strong form is correct and if I recall correctly, few abide by semi-strong. I can provide 100s of articles that support TA from highly respected academics. That is not the point. The Lo quote should stand. At a minimum, remove dubious. I will think about rewording the remainded if I have time.Sposer (talk) 11:18, 1 March 2011 (UTC)

What quote? Nothing was quoted. Quotes have to either be in quotation marks or blockquoted, and must have an immediately following citation. Somebody (you?) added an uncited unencyclopedic colloquial-language "explanation" complete with contractions (you do know we do not use contraction in an encyclopedia, right?). In any case, I left the cited material and only removed the uncited "explanation". I dispute that the material removed is accurate. Yworo (talk) 13:10, 1 March 2011 (UTC)

I eas referring to the bit where you altered the cite of the Professor Lo article and added the term "dubious". If it wasn't you , then I misread the diffs. But the addition of dubious certainly is not in the cite and is opinion of the editor.Sposer (talk) 17:01, 1 March 2011 (UTC)

Dubious is a tag that's used when an editor believes that the description of what a source says does not accurately reflect what the source says. I don't have a copy of Lo, so I request a quotation of precisely what his conclusion is, and which form or forms of EMH he says it applies to. Yworo (talk) 17:12, 1 March 2011 (UTC)

The paper is online and was linked and taken nearly word-for-word. Sposer (talk) 19:16, 1 March 2011 (UTC)

The paper is online and linked, yes. However it is only available for purchase or to subscribers. Since I cannot access it, I am requesting quotations, which is my right. Yworo (talk) 19:19, 1 March 2011 (UTC)

Missing the point

I am not sure on your background, but it seems to me you are all missing a point. TA rejects the EMH as one of its premisses. It does not concern itself with the strong\weak versions, or the Random Walk idea. The EMH is unproven. It is statistically supported (perhaps) but not proven. By contrast, the Euler identity is proven. You are not going to save or destroy TA on wikipedia, and the question of EMH is irrelevant. It is a point of fact that TA exists. It is point of fact that many people use it. It is a point of fact that many more people will turn to Wikipedia to find out introductory explanations about TA, about what it does, and if they are interested, which books to buy to find more info. In light of this, I think it is enough to say that TA does not accept the EMH as a premiss, as some stricter theories of FA do. It is a matter of opinion really, do you believe in the EMH or not. But matters of opinion should not be expressed in an article. Even if we feel the EMH is relevant, there should be an article on the EMH, with a disussion there. It is not a relevant part of TA, but a mere remark. The page should be written better, with a crossreference on the EMH, not a discussion about it being proved or disproved on the main article page on TA. Sandro Skansi 14:40, 9 April 2011 (UTC) — Preceding unsigned comment added by Horao (talk • contribs)

Reference to Lui article

Can this statement be clarified? I've read it several times and don't understand. What is the being referred to by 'index composite others' or between 'Han Seng index' and 'index'?

"Recently, Kim Man Lui, Lun Hu, and Keith C.C. Chan have suggested that there is statistical evidence of association relationships between some of the index composite stocks whereas there is no evidence for such a relationship between some index composite others. They show that the price behavior of these Hang Seng index composite stocks is easier to understand than that of the index.[24]" --Golden Eternity (talk) 20:35, 4 May 2011 (UTC)

Yes it needs clarifying. I suggest looking at the source and rewriting the text for the article.-- — Keithbob • Talk • 18:30, 5 May 2011 (UTC)

NPOV

I propose removing the npov tag from the head of the article as opposing/contrasting points of view are well represented throughout the article. This may have been a problem at one time, but it is clearly no longer one. I will wait for a week to allow for discussion. TradingBands (talk) 16:54, 3 August 2011 (UTC)

OK, removing it as there were no objections. TradingBands (talk) 16:34, 11 August 2011 (UTC)

Fine by me. ~Amatulić (talk) 16:59, 11 August 2011 (UTC)

Intro too short?

I propose taking down the intro too short notice. At this stage the intro actually seems quite adequate. I'll wait a week before taking action to allow discussion. TradingBands (talk) 15:11, 12 August 2011 (UTC)

I agree. It exactly states what TA is.Sposer (talk) 15:56, 12 August 2011 (UTC)

Removing short-intro template as there were no objections. TradingBands (talk) 15:00, 19 August 2011 (UTC)

Second line of Intro section is NOT correct

The second line of Intro says "Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands in contradiction to much of modern portfolio theory."

Behavioral Economics DOES NOT "incorporate" technical analysis. Also, SOME quantitative models use technical analysis, but the introduction makes it sound like ALL quantitative models use technical analysis. Also, what does active management have to do with MPT? It is EMH that says active management is not possible (as captured in the third line). I am taking out that second line.

Here is the low down on Behavioral Economics:

(1) According to the book "Advances in Behavioral Economics":

"This conviction [use of psychological realism] does not imply a wholesale rejection of the neoclassical approach to economics based on utility maximization, equilibrium, and efficiency. The neoclassical approach is useful because it provides economists with a theoretical framework that can be applied to almost any form of economic (and even noneconomic) behavior, and it makes refutable predictions. Many of these predictions are tested in the chapters of this book, and rejections of those predictions suggest new theories. Most of the papers [in Behavioral Economics] modify one or two assumptions in standard [Economic] theory in the direction of greater psychological realism. Often these departures are not radical at all because they relax simplifying assumptions that are not central to the economic approach."

So, please understand how behavioral economics fits into economics.

(2) In the world of mathematical modeling, the approach followed by technical analysis falls under the category of Empirical Modeling. There is nothing wrong in using empirical models to predict future outcomes (and I am not interested in a debate of whether empirical modeling is the correct way to predict future stock prices -- To Each His Own!). Models incorporating behavioral economics tend to fall under the category of explicative or simulation modeling. Yes, volume and price generated from the markets are used -- not as inputs to the model, but to validate the model. The use of market generated volume and price in such manner does not make it technical analysis (if it does, then the sections "Description" and "Principles" in the the article are invalid). In other words, models based on behavioral economics try to EXPLAIN a market phenomenon and use market generated information to VERIFY the validity of the model. In comparison, technical analysis DOES NOT explain anything but tries to predict future outcomes. — Preceding unsigned comment added by 59.161.191.227 (talk) 20:39, 19 November 2011 (UTC)

Please read WP:AGF. Nobody's abusing anything. The whole point of Wikipedia is that you can edit it for any good reason. In your case, editing to correct errors and misunderstandings and using reliable sources (as opposed to original research) is what it's all about. "I will wait for a week before I take out the second line." Why a week? If it's wrong, be bold and go for it now. CityOfSilver 20:59, 19 November 2011 (UTC)

Point taken. Thank you. I have edited my previous entry to reflect your point.

I believe that quote that you were mentioning is taken from a reliable source. Technical analysis tries to predict the future, but it tries to predict the future using the same basis and reasons as behavioral economics/finance. All of TA is based on psychological reaction to various stimuli. Behavioral economics, which came after TA, built on TA's base. Whether academics like it or not, TA is part of behavioral finance, a truism that many academics absolutely agree with. The exact wording might need to be made more clear (and I will get the quote from the source I refer to tomorrow, but the general theme remains 100% correct. No technician believes he/she can predict the market for any reason other than due to the same principles that behavioral economists use. The difference being that technicians do not use everything that behaviorists (or quants) use. The overlaps are substantial. They are not the same, but all three fields are close relatives.Sposer (talk) 17:24, 20 November 2011 (UTC)

I tend to agree with your assertion that there are people who practice TA influenced by the psychology of human decision making under uncertainty. However, I don't agree with your statement "Behavioral economics [is] built on TA's base." Behavioral economics got started based on the work done by Amos Tversky and Daniel Kahneman, two psychologists who tested the validity of rational expectations theory assumed in economics. Just because SOME people who use TA take into account psychology of human decision making under uncertainty, and behavioral economics also defines CERTAIN behavior of economic actors in terms of psychology DOES NOT mean Behavioral Economics INCORPORATES TA (as the intro previously claimed). You also seem to use behavioral economics and behavioral finance interchangeably -- remember finance is a subset of economics and so is the behavioral inputs to these fields. Finally, you said "TA is part of behavioral finance, a truism that many academics absolutely agree with." I would like to know which academics agree with that statement!!! I can understand an academician agreeing that TA practiced by FEW individuals uses the SAME psychological underpinnings used by Behavioral Finance, but NOT to your statement. The reason, as I mentioned earlier, is that TA is a Empirical Model while NO behavioral model that I know of till date is an Empirical Model (they are all Explicative Models) -- your statement is really comparing apples to oranges. On a separate note, why are you so keen on linking TA and behavioral finance? Does TA need APPROVAL from academicians to exist? I personally don't care if academicians approve of TA or not, as long as I make money using TA! If you are so particular to have a link between the two that will "please" academicians, say something to the effect "Some types of TA and Behavioral Finance both rely on the idea of bounded rationality of human agents". — Preceding unsigned comment added by 14.96.178.4 (talk) 13:26, 21 November 2011 (UTC)

Actually, behavioral economics/finance was started long before Amos Tversky and Daniel Kahneman. Though they made amazing contributions, they were not the founders. The best candidate for that honor is Humphrey B. Neill. RogerBabson (talk) 01:46, 1 December 2011 (UTC)

I get where you are coming from and I also agree that the sentence in the article was not really correct. The quote I thought I had was not present. My point about TA and Behavioral Finance is essentially that, especially chart patterns, are 100% psychologically based, and TA books go to great lengths to explain why they should work, on a behavioral basis. I cannot know what was in Tversky's and Kahneman's minds as they developed BE, but I would be amazed if they were not at least partially led there from TA. As far as my statement about professors, it is from personal conversations. My bugaboo about technicians is that they had the opportunity to be quants and Behavioral Economists, and were too lazy to spend the time to work it out (maybe they were too busy making money). As far as a desire to have TA approved of by BE academics, the Market Technicians Association, which is the professional organization, does work with academia as does the MTA Education Foundation to reverse the misinformation on TA and the (in)efficient markets.Sposer (talk) 01:45, 22 November 2011 (UTC)

[ I have removed this outlandish and irrelevant statement. Even if it is true, it should not be there, but I agree it is factually highly questionable. Incidentally, this whole article reads like a defense of the methodology and an attempt to jsutify it, as opposed to a dispassionate statement of what it is. Nexus501 (talk) 04:13, 17 February 2012 (UTC) ]

I will provide references in the next couple of weeks, but I have spoken to many academics in Behavioral Finance, and many openly acknowledge the connection. Was at a conference yesterday, and multiple quants there agreed that the statement: "much of your work is built on more sophiscated usage of technical analysis tools and methods." Obviously, that is not a reliable source, but not one disagreed.Sposer (talk) 22:15, 17 February 2012 (UTC)

• This content has been removed. While we value and welcome subject-matter experts to participate in editing articles, we do not base encyclopedic content on word-of-mouth, assumptions, or personal convictions outside of reliable and independent sourcing. Additionally, we do not allow ownership of articles by individuals who wish to assert their preferred version of an article bypassing policy, guidelines, and consensus. To this point, you may want to consider a Request for Comment, content dispute resolution, or the Fringe theory noticeboard. In either point, do not restore this questionable content outside of established consensus. Best regards, Cind.amuse (Cindy) 13:24, 18 February 2012 (UTC)

• Further to the edit summary, I clearly stated that I was not using my anecdotal notes as reason to revert. The reason for the revert (beyond the fact that there were grammatical errors, which obviously I could have corrected), is because there are papers and books that state these points as facts. I can point to academics who use TA to prove BF. If you ever looked at quantitative tools, they use rich/cheap analysis (overbought/oversold), moving averages to determine how rich or cheap things are, etc. I know this, because I also worked as a quant and an economist before I was a technical analyst. The tools are the same in many many cases. I will provide the required cites, but do not have the time to search right now, but will in about a week. As for fringe theories, TA is accepted by a large and growing number of academics. And, just to be clear, I have not worked as a technical analyst in many years.Sposer (talk) 22:29, 18 February 2012 (UTC)

• I've gone ahead and offered a list of policies and guidelines on your talk page. It doesn't appear as though you have been properly introduced to the community. Please spend some time reviewing the policies, particularly in regards to reliable sources, edit wars, and adding unsourced or poorly sourced content. It is clear from the dialogue on this page that consensus has not been met. Do not continue to revert the work of others. Users are expected to collaborate with others, to avoid editing disruptively, and to try to reach a consensus rather than repeatedly undoing other users' edits once it is known that there is a disagreement. Further information has been provided on your user talk page. Options are available to you. Continued disruptive editing is not one of those options. Best regards, Cind.amuse (Cindy) 23:35, 18 February 2012 (UTC)

• You should read the policies, not me. I reverted and added a cite, that clearly stated that quants use technical analysis. I have a further cite now, with a WHOLE book that ties behavioral finance to technical analysis. And, if you are going to revert, it would have helped if you corrected the grammar at least. I am following the rules. You are just trying to force your opinion. I am providing sources while you are just saying that you disagree. That is edit warring.Sposer (talk) 00:12, 19 February 2012 (UTC) There was never any consensus that the tie-in between TA and Behavioral and/or Quant was wrong. There were editors that felt it was all out wrong, but there was more a disagreement about the wording, which was substantially altered. What was there earlier was not correct. Somebody then reverted what was there without achieving consensus, which I reverted. Then, I added a reference on quants using TA tools, and that was reverted. That link is here: . Further, here is an academic paper that directly states the ties between behavioral finance/economics and TA . And there is a whole book on the role of Behavioral Finance in Technical Analysis called "Behavioral Technical Analysis". The two subjects are intertwined and inextricably linked. I understand the points made earlier that TA is predictive, but you will not find a TA book that does not point out that TA works due to psychology and human emotion. The tools Behavior Finance depends on, includes the same tools TA uses. One is not a part of the other, but the basis for both - human emotion and irrationality are one and the same. As for Quants, read any book on quantitative analysis. It is about measuring supply and demand changes via information from the markets. That is technical analysis. Except quants tend to use far more complex statistical and analytical tools, in addition to the ones that they borrowed from TA (such as moving averages, momentum, trend detection, etc.). I know the Wiki rules. I have been editing here for years. Cindamuse is clearly even more experienced than I am, but I suspect she did not read through the whole thread. I have followed all the rules and I am not in any way, shape or form, edit warring. I should also add that it is ironic that the sentence from the Lo book is being used to question the validity of TA. Andrew Lo is a supporter of technical analysis and wrote the book, "A Non-Random Walk Down Wall Street". Sposer (talk) 03:16, 19 February 2012 (UTC)

• The issue here is that there is a current lack of consensus in this article. Rather than engage with the editor, you have chosen to continue reverting content. You additionally add unsourced content stating, "I will provide the required cites, but do not have the time to search right now, but will in about a week." This is inappropriate. Please respond fully to the concerns over article content with the editor above, Nexus501 to discuss reliable and independent sourcing for disputed claims to reach consensus. Once consensus is met, that would be the time to edit the article, as well as providing the citations to support all claims. Pointing to academics and knowledge gleaned from attended conferences and personal background does not meet our guidelines for reliability. Best regards, Cind.amuse (Cindy) 09:19, 19 February 2012 (UTC)

The text that is there now is not grammatically correct. I had changed the text previously and I see now it said before Nexus altered without discussing that Behavioral Finance and Quants incorporate TA. What it should say is that BF and QA incorportate and are built on many of the same tools and theories that TA is built on. The cite that Cindamuze reverted showed that for QA and the ones I noted above shows that for BF. I will put that in next week when I have time. Sorry for posting under an IP, but I am not on my PC. This is sposer. — Preceding unsigned comment added by 24.238.127.242 (talk) 15:55, 20 February 2012 (UTC)

As promised, I have altered the text to more correctly state that TA, QA and BF all use many of the same tools and techniques. I've provided cites, including a full book on the relationship between behavioral finance and TA, as well as a paper describing same. Given that every pattern used by TA is always described based on the psychological and behavioral reason for why it should work, and given that other types of TA, such as Elliott and Dow Theory are 100% described behaviorally and psychologically, it is 100% irrefutable that both TA and behavioral economics and finance are based on the same thing. And, given that quants use many of the same exact measures as technical analysts (and many more complex ones, but still using the same underlying reasoning), it boggles the mind that anybody could question these relationships. I fully understand how a person who incorrectly believes in the validity of random walk or EMH would consider TA, QA or behavioral finance as being invalid, but questioning the noted relationship is illogical.Sposer (talk) 23:04, 25 February 2012 (UTC)

Some interesting additional reading from a quant forum. I know this is not RS, but it should be instructive for those that seem to think that QA and TA are not highly related. http://www.wilmott.com/messageview.cfm?catid=3&threadid=45864.Sposer (talk) 23:18, 25 February 2012 (UTC)

First three paragraphs

I don't know where to start. They are completely incoherent. What is going on here??? 76.191.143.69 (talk) 04:08, 2 September 2012 (UTC)

Yup, they are unintelligible garbage. Probably intended to disguise the fact that the whole article is about pseudoscientific mumbo-jumbo. Technical analysis doesn't work. AndyTheGrump (talk) 15:42, 2 September 2012 (UTC)

If this article is not rewritten in intelligible English, and in compliance with Wikipedia policies, I intend to stubbify it, and/or move for its deletion

This article is a god-awful mess. The lede is utterly incomprehensible, and violates pretty well every requirement of Wikipedia:Manual of Style/Lead section. The remainder of the article is almost as bad - scattered with poor grammar, jargon, non-sequiteurs and bizarre statements (e.g. "Technical analysts believe that prices trend directionally, i.e., up, down, or sideways (flat) or some combination". What else could a price do? Perform handstands while whistling Colonel Bogey?). I have to conclude that either (a) there is no subject here worthy of an encyclopaedic article, or (b) there is one, but those interested in the subject would prefer that the article be as obscure as possible in order to hide what appears on the surface at least to be self-evident - which is that "technical analysis" is pseudoscientific hocus-pocus if it is anything at all. I suggest that those responsible for this heap of unintelligible gloop do something about it - and soon. AndyTheGrump (talk) 03:27, 3 September 2012 (UTC)

Pseudoscience?

Qoute: "it is still considered by many academics to be pseudoscience". Are there any academics who consider 'technical analysis' to be something other than pseudoscience? What is the balance of opinion amongst those acedemics who are qualified to make such a judgement, and have done so? Simply leaving a statement like that hanging is untenable. If the only academics who have expressed an opinion on the subject do indeed consider the subject to be pseudoscience, Wikipedia:Fringe theories guidelines apply: "When discussing topics that reliable sources say are pseudoscientific or fringe theories, editors should be careful not to present the pseudoscientific fringe views alongside the scientific or academic consensus as though they are opposing but still equal views. While pseudoscience may in some cases be significant to an article, it should not obfuscate the description or prominence of the mainstream views". As to where on the spectrum between 'Obvious pseudoscience', 'Generally considered pseudoscience' and 'Questionable science' (as discussed in the guidelines) the topic falls, it is difficult to say without further evidence. However, since the article states that some academics at least consider the subject pseudoscience, there can be no reasonable doubt that Wikipedia:Fringe theories guidelines need to be taken into account - which this article singularly fails to do. I would remind contributors that there have been several arbitration cases relating to fringe topics over the years, and such matters are taken seriously by the community. As with all the other issues raised in the section above, this clearly needs prompt attention. AndyTheGrump (talk) 13:28, 3 September 2012 (UTC)

The pseudoscience statement does not belong in the article and I am not sure why it is in the article, as that is, at this point, a fringe opinion on TA. I cannot use in the article, but I've spoken to many academics, and there is growing acceptance of technical analysis, probably due to the success of its close cousins, behavioral economics and quantitative analysis. There are 100's of academics that believe that technical analysis (TA) is valid. Andrew Lo, whose work is quoted in the article is among them. Blake LeBaron is another. Didier Sornette has also use TA in his work. The NY Fed has written papers pointing out the validity of some patterns (and has written others that are less positive). The London School of Economics wrote severl papers in the 1990s pointing out how some TA methods led to outsized alpha. For all intents and purposes, quantitative analysis is TA on steroids, and few doubt quant's efficacy. I don't argue that the article needs a good deal of work. There have been multiple poor attempts at either trashing my ill-informed people that think TA is invalid, and equally ill-informed technical analysts that are incapable of writing a complete sentence. The article, however, has necessary cites and TA is most certainly anything but fringe.Sposer (talk) 18:52, 3 September 2012 (UTC)

Wow. I haven't looked at the lede in a long time. This is atrocious. We probably need to go back a year to find what is reasonable.Sposer (talk) 18:54, 3 September 2012 (UTC)