Do you guys practice Stock Astrology? If so, let me know why down below!

I used to think this way, but discovered quickly that I was very wrong. One of the reasons technical analysis works is because people use technical analysis.

The deep irony is that this guy is apparently serious and hasn't understood that quant trading IS technical analysis.

ALL models (including quant) are based on previous data, by definition. Anyone who uses a model of any kind is essentially engaged in technical analysis, whether it be a price chart, an income statement, or current order flow.

1:10 if prices are indeed random, then there's no edge you can possibly have, whatever other data you're using as a quant would be equally as worthless

My lazy ass would love a video where you go over the empirical evidence.

technical analysis is not used to predict the future, but to read the present market.

Let’s not forget that the biggest payouts in the markets don’t come from great performances but rather it’s great promotions. Stay invested, diversification for streams of incomes is very important

I use fundamental analysis mostly, but i did start from TA. I've read a lot about it and what I can say is that you don't really understand TA yourself. And probably what price is also. Price is not value and these are two different things. Prices include emotions.TA focuses on these emotions, which can be visible in the price chart.

The kind of technical analysis which does work to a certain extent and is used by hedge funds and asset management firms is completely different from what retail traders do. One of popular class of methods is statistical arbitrage. A lot of asset management companies use price volume data to mine alphas and feed them to machine learning models which in turn generate signals for trade. These are the methods which work (but not 100% of the time of course) so far as "technical analysis" is concerned. All other stuff that retail traders do is considered a joke in academia. But that doesn't mean it will never work. If a lot of people are following the same method/signal to trade, regardless of whether it makes sense or not, some will surely make some profit at some times.

I disagree wirh this. I am a futures trader and TA is critical for my job. If you do not understand TA, it does not mean it does not work. Actually it works but... there are things that some people, even knowing some TA, do not know about. Some people simply do not understand the markets.

I am a individual trader which HFT platform would u suggest me to use my automated strategy i tried MT4 but it was too slow and didnt execute orders on time also on wrong prices ,please suggest HFT platforms.

09:00 the head and shoulders pattern is a pattern that indicates a potential reversal zone, that does not mean that the price will necesary change its direction, it is usually used as a filter to avoid trading in those situations.

How is the technical analyst saying when bitcoins weekly trend turns up statistically speaking it is a good time to ladder into a position,(or for that matter ladder into positions on the weekly up trend in Bitcoin when the 3-day stochastic crosses up) different from a quant coming up with a model?

This guy ain’t got a clue what he’s talking about. He wants us to die for his sins.

Any advice for trading options I'm a scalper and I do use technical analysis?I trade off volume and support and resistance not to many indicators because there all lagging.Any advice or websites for scalping and swinging options?Just found your channel your great !!!!

Why focus on a single indicator? I use 200 sma, rsi, macd, volume, & 20/50/100 ema. Psychological support and resistance is real. Price is not truly random in the long term.

If you do not understand something doesn't mean it doesn't work. Technicals and fundamentals are different things, they are part of a whole. Best traders don't only look at a chart only but they study the sentiment, news, fundamentals, psychology of the market, indicators, long term market regime and then the chart. This cannot be quantified. It is so easy to create a MACD based algo strategy that makes money, once you understand how the markets work, the risk and randomness of the markets. Prices cannot be predicted but you can control your bets and position sizes. Patterns exist, the market is so full of trading algos right now that they often repeat patterns in the market, when they apear they can be traded for a short period of time.

Don't you think small prices movements can be predicted with trade flow imbalance and order flow imbalances ?

The most important counterexample to your position is the performance of james simons' medallion fund. But I agree that most retail traders should not be trying to use technical analysis to try to beat actual quant funds at their own game. In fact, if people stopped trading stocks at all and just bought and held the index, even the medallion fund wouldn't be able to make money.

jesus please tell success rate of the prediction by AI/ ML models for index options trading for day trading work ? if yes which models and how and why and if no please share

How are you defining TA? Like using indicators? Also, would you consider this TA or a quantitative approach. For example, lets say you back-test a strategy on historical data and find that 70% of the time when a stock gaps up 50% pre-market, there is a dip at the open and then a 10% spike, so every time you see this you buy the dip and catch that 10% move. Just curious if you would consider this quant or TA

I don't know what kind of experience you have as a quant, but you really couldn't be further from the truth. Just some background for you, I've been working as a quant for nearly a decade and have experience across a broad swath of Wall Street banks and boutiques. Furthermore, I currently run a consulting firm. Many others have already stated many truths, but on top of that, tech analysis is used as part of a stack for advisors, traders, and analysts. That stack is comprised of chart reading, fundamentals, and all the fun quanty stuff that's involved with designing, backtesting, and possibly implementing of specific algos. It's not a perfect science with respect to accuracy and linear predictability, then again, no system is. If you were worth your salt in your field you would already know this. Technical Analysis is an entirely separate field from HFT, especially if you have worked at a prop firm, this is common sense. I really hope that if anyone is to gain anything from this video, it's that you have no actual idea what you're talking about and you're not worth a subscription nor additional views for spreading misinformation. Literally every major bank and firm I've worked at leverages TA to some degree for various reasons.

What do you use when developing your Quant's what is it based on? Do you not use technical indicators?

I tried feeding prices into several different neural networks and couldn't find any pattern so I'm doubtful their is any.

If this is true why does using KDJ increase returns by around 90% vs buying and holding during the same multi-year time period?

But given that many people trade based on technical analysis, isn't that creating its predictive value? The head and shoulders example isn't a good prediction for a price, but it seems to confidently predict a thiker order book which in turn could be used to get a better price for a high volume order or something. I mean in essence, isn't a big chunk of the market just human psychology?

So, you write your trading bots or whatever based on what? TA etc right? does that means the bot is garbage as well?

So tell me what i want to do?

I respect your advice but I have a question: aren’t you bound by Disclosure Agreements not to share your experience on Public Platforms?

Maybe you haven't looked hard enough or your definition of technical analysis is different.. For me TA is to be able to find a risk defined entry point that gives me twice the reward and has a strike rate of 5/6 on 10...it's good enough to build a career.. It's a lot of work but it possible.. And yes pattern recognition helps.. Doesn't work everytime.. But it doesn't have to. Just enough so you're striking 5 on 10... Took me 4 years to figure out a system... But it works now....week after week.. Same boring process but effective.. Just manage risk, that's the only thing we can control. Trade outcome is random.

Can you combine algo trading with chart reading?

How does one reconcile what is in this video with the fact that Medallion fund's performance " ... averaged a 71.8% annual return, before fees, from 1994 through mid-2014."?

The very fact that people believe in chart analysis is enough to prove it has value - if we know people are buying based on patterns, all we have to do is look for those patterns and we know that other people are buying and selling based upon that pattern. If we know that a bunch of people are going to see a pattern and act a certain way that impacts price, that’s just another catalyst for our decision making. Think about it - if people believe a pattern is a bullish indicator, they’re more likely to buy which makes it a self fulfilling prophecy. All you have to do is see this pattern before others catch on and front run them.

What I find interesting about TA, is that in the short term if everyone concludes that a stock has a particular trend (like up), then that will create buying pressure and momentum. So it's not entirely true to say that past price has no effect, because if enough people believe it does they will trade off that and it becomes a self fulfilling prophecy. Having said that, it can turn on a dime so maybe there is an element of randomness too. My hunch is that Ito calculus is a better mathematical model for price movements that something purely stochastic

Enjoyed the video. So then what is the alternative?

I agree with you on the "only using a single indicator" part. Something that you have to know though is that people can actually create an idea on where price is heading to if they do it correctly. Technical analysis isn't only about chart patterns too. There are different techniques that I use (Not only indicators, my trading plan doesn't use many) in my trading strategy that can earn me profit if done correctly. Obviously, Price action alone isn't very effective, but if added with fundamentals, I think if the person knows what they are doing, and isn't just using one simple indicator they can earn profit.

"Quant Lead" gives me "Tech Lead" vibes, shivers

Hey CJ, I get your points. A lot of quant trading is overfitting on past data and finding patterns in randomness. Just one question, if price is 100% random, then why can it still be statistically differentiated from a random walk? Think about the ADF test, Hurst exponent and variance ratio test. I am fairly new to the world of quant finance.

What if i buy 3 month options in the direction of the market? Is that day trading?

so the algorithm that runs the markets is random ? and past supply and demand zones don't mean anything and are just random ? liquidity levels that institutional trades use retail to fill their orders is random ?

This guy is extremely ignorant, tell that to all of the consistently profitable traders that use patterns constantly, including me. Of course we use multiple forms of confirmation but to think you need to focus on some “investing” thesis is just plain stupid.

Yes , while technical analysis doesn't work , but most traders use it (T/A). So me as a trader I keep my fingers on the pulse of these traders (who use TA) by watching the TA on charts to see what the masses (traders) are thinking, and I act before they do , because I know what they're thinking when they're watching their charts. Trading is psychological , put yourself in the minds of traders and know their move(buy or sell) before they even come to their own conclusion and act before they do.PS: always put your mind into what the masses are thinking /seeing while ignoring your own thoughts . Its like "ask the audience "on that game show, and you'll be right more often than not . Also , prices are random , but people aren't , humans are creatures of habit. This is the end of the lesson .

Exactly . It goes like this and I know it from my teacher in Uni who is a trader . "If you trying to find a pattern , you will.. eventually"

If I master python what job position do you recommend?

We tend to agree. however there are certain patterns which most technical analysts agree on and this in itself creates short term moves in predictable directions. Admittedly longer term they do not necessarily play out but if all analysts believe that a price is going to rise off say the 20 day EMA then they will all take similar positions causing the price to rise - for day or hour traders that is all they need. That said we are great fans of DCF valuations - but this is more difficult in the crypto markets for example where currently its almost impossible to assess future earnings for most if not all cryptos.

1) Work on discipline, risk management, and trade stop hunts paired with higher time frame analysis. 2) Laugh your way to the bank while watching this vid

So what do you recommend over TA?

What about TA+machine learning to optimize? I’ve heard this technique works well. Optimizing values at least optimizes probability based upon TA.

the traditional way of looking at the prices with indicators doesn't really work. But the point is to have some probability at start and then adjust the portfolio as the prices move. it is wrong to say everything about technical analysis is crap. Best strategies are always simple but what makes the whole thing complicated is how you move your position given the large sum of money. buying a stock because of a MA cross over may not make money. But quite honestly, prices are not that random. At least to me, if you pick 5 good mangoes out of 10 from a basket, it is safe to assume that the 6th one would be good as well. of course you can go wrong. but with that probability, given the large set of trades you make, you have a more than average probability to win.

Id also be curious to hear what input parameters go into HFT algos ?

This might be a very different comment from the vid. But i study economics, and trade. Once a person understands how to relate macroeconomic concepts like FDI, CRR , SLR , GDP and study the budget of the government then trades in stocks that are affected by government decisions. Such as banks , real estate and other sectors like defence, one can make good predictions. Example , if a government is trying to help a certain sector , pouring in money and developing it , it's easy to just park the money in the index or pick a few top dogs. Yes mathematics makes perfect sense but the numbers are generated by Economic movements , so if you just know why and what moved, you make money irrespective of moving averages and bla bla.

When there are thousands of people involved there is most definitely a trend! TA is basically learning what the pack is about to do. TA works really well if you can see patterns in creature habits. The reason we have resistance and support lines is because we have thousands of people thinking the same thing and drawing their lines on the same chart. Sorry bro but I used to think like you! It’s not about price at all. It’s about human nature.

The point of of technical analysis to have a idea of where traders/institutions/etc believe a product is oversold or overbought. No system is fool proof. But technical analysis, with good understanding of fundamentals, a proper outlook and experience increases a trader's edge. Thank you for you post, Happy trading.

These kind of videos help me to keep my price action trading edge forever. Thank you. I love them people who didn’t put enough work in technical analysis try to convince others that TA doesn’t work. Just because you didn’t manage to make it work, it doesn’t mean that it doesn’t work. Anyway, you do you, I will keep using my garbage TA :-)

How do you think Medallion fund makes >60% yoy?

What do you think about aikido finance as a trading tool?

TA could be a good simple exemple of a feature extraction tehnics, like simple example of a base signal Many of these series can obtained with different ML or Fourier function aproximation

Agree TA can't predict future prices however it can be used effectively to manage trade positions.

Is supply and demand trading the same as technical analysis?

have you done your own extensive studies, or do you rely on studies others have done?

By calling the entire TA garbage just to prove a point about scammers selling it is ignorant. TA is simply a statistical tool (MATH) to get odds in your favor. Any good TAnalyst will tell you that it is no holy grail. TA also respects the random walk theory and also any other theories out there. TA is not just about historical price movements to predict future movements, pattern recognition, etc like this guy claiming. It is understanding what other investors/traders are also doing currently. It is also a measurement of exuberance, fear, and greed in the market. There is a reason why this guy is a KZfaqr(no different than others selling TA services) and successful traders are simply traders. Skilled traders do not need any services; these services are made for the lazy ones. Think! TA works, Quant works, Fundamental works, Buy-n-hold works, etc. You will find everyone in a different school of thought that has been successful based on their individual personality and lifestyle. Do not be ignorant like this guy.

Unfortunately for your viewers, there is a lot of misinformation in this video, and also a lot of assumptions on your behalf about people you dont know, including a ton of generalities that are dangerous if you actually believe these things. Technical analysis is so much more than the things you mention and works for reasons you didnt even address. I was actually hoping this was going to be a good watch.

I’ve always felt it was basically roulette, guessing red because the past 10 were red… am i wrong?

Hi bro can you share your models on drive? Ty

Question : What does quant do different?

You pretty much lost me when you mentioned that prices are random. Human psychology dictates prices and a chart is nothing more than a representation of the market participants’ psychology. Chart patterns can potentially determine how greedy or fearful the participants may feel at a certain point in time. Does it always work? No. TA is about probabilities and in no way is some kind of crystal ball that 100% predicts what’s going to happen. Look at it as a tool that can be used along with fundamental analysis.

I don’t understand. Do quantitative firms/funds depend on technical analysis? How did James Simmons renaissance technology medallion fund blow the market away if technical analysis doesn’t work. Did they use another technique? Is momentum investing different than technical analysis?

so what are we supposed to use them mr knowitall

Hopefully, you traders see the flaw in his argument. 3:40 He stated clearly that he "knows" price action is random. In 4:59 he also stated that he understood that price is subjective (meaning price action is based on the observer). At 2:40 He also states that people are hard-wired for pattern recognition. At this point you should see why the opinion in this video is flawed. Value (price) is based on the observer. We are social observers (group observers) hard-wired to recognize patterns. What appears to be randomness in price movement is actually a product of the competing intentions of social observers. Various groupings of social observers define price movement. The intentions of those observers with the most strength (volume and/or capital) will dominate price movement. Herd recognition and response to these movements creates more pronounced patterns. Based on group pattern recognition, the direction and duration of short term price movement can be reliably predicted with an accuracy above 60%.

Well said! Nicely done. Now the hard part, getting a generation of Robinhood traders, who have only ever seen the greatest bull market in history, to understand this.

You might not be able to predict the direction of price but what about "momentum" of price? If you can predict breakouts with reasonable accuracy then with a good profit/loss ratio you can be profitable in the long run. Where am I wrong?

What could be the solution for that??

One of the best definition of price that is perfectly consistent with main stream modern finance that I ever heard!

Is this guy serious? been trading for a living for years and technical analysis is what i used all the time. But the pros who win consistently combine it with market analysis, money management and effective emotional management. Technical analysis is important, but it's only 1/4 piece of the puzzle.

what do you say about Money flow...??? more money in market means more growth of prices.ITs an obvious analysis.

So are you saying I shouldn't waste my time studying technical analysis, because I want to start learn stock options trading. Any advice?

Hey, man! Great video! So, do you believe in fundamental analysis?

But when all the market follows technical analysis it becomes a self-fulfilling prophecy. There are also psychological elements to price action, such as resistance levels, which technical analysis is based on.

if prices are random why does price gravitate toward support and resistance?

do you have springs ?

Wow you’re absolutely right. I’ve been in the quant rabbit hole and I agree with you

One thing you'll see alot with TA "analysts" is saying things like "it needs to break through resistance to go higher" or "it if breaks support here it will go lower". In other words "it might go up or down" and there's no scenario where they are wrong.

Then what stratergy quant trader use ?

What are your thoughts on NNFX?

Three "trading guru" advertisements during this awesome video✏️

I completely agree with you in everything you have just said, thanks for the effort you are making to popularize the quant trading.

So... how am I suppoused to make money in the stock market short term?

Price movement is 50/50 odds, LOL try to beat that, and yes... we are already losing by paying the broker for every trade we make. What if i make a group of 10 technical analyst that have a 90% or more probability of losing trades, then hedge against them, can i win?

Data produced by a stochastic proccess of predefined rules can be plotted in a certain distributions, yet it's not purely random.

Here’s my TA. Buy low, sell high.

@Coding Jesus can you please do a review/critique of "The Strat" trading system? It would be really interesting to hear your honest thoughts on it. Thank you

What do you think will happen to Eth long term?

Bro I study artificial intelligente for about 3 years, I have a firm, and I can absolutely tell it does work. Even if you plug in an artificial intelligence to the chart it soon finds out the same exact pattern found from other human analyst. You are saying algo trading does not exist, this is crazy.

i'd argue that sure prices can be random, however they will generally follow a pattern of randomness, within a given range of randomness, which can be predicted, so although you cant predict exactly what price will be reached by a given time, it's entirely possible, at least theoretically, to predict the range in which that price will be

@Coding Jesus: great vid. Are there any chartists that don't suffer from the raging apophenia you speak of? The candle interp concepts are mathematically proven aren't they? Cheers

Just wondering, if TA is complete garbage, then why is the best performing found(medalion found) using it?

As a trader, your statement "...prices follow a trend if you believe prices are not random, prices are indeed random." is a yes and no. Prices are indeed random, its the individuals who partake in the markets that make it "not random". We as traders look in the past to identify places where more people agreed that prices are a good price. We as humans implement fear and greed onto the charts in other words supply and demand. As a trader, I identify those areas and assume based on past history that these areas will play a role in the future. That's all it is. Yes prices are random, but the people trading the markets have patterns that we can clearly take advantage of.

Great content! But I have to disagree at one point - price is not random. Technical analysis is indeed bullshit, that is heavy exploited by professionals in the process of liquidity engineering. That's why the markets are predictable - if they weren't heavy manipulated, that would probably prove your point and price would remain "random". The only things that matter are order flow and volume, because if there is a heavier hand in the market that is manipulating the price, the only thing you can do is follow it. Nobody can spot big money using technical analysis, yet it is doable with order flow tools.

Okay, so what about handwriting technical analysist? Anyone?