A Java library for technical analysis | Hacker News Reader

A Java library for technical analysis

github.com

56 points_benj18 comments

In finance, technical analysis is an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume [1]

[1]: https://en.wikipedia.org/wiki/Technical_analysis

Note that TA is old, and often these days subject to game-theory like flukes because everybody knows what everybody is trying to see.

But that also gives it power... the more people act on a given indicator the more powerful (even predictable) it becomes

So then you end up with this weird catch-22 where the indicator only has value because people are watching it, while it is those people watching it that gives them their power.

They aren't going to be as useful for forecasting the big institutional curbstomps that seem to characterize volatility today, but there are other ways of understanding how those guys behave.

The self fulfilling prophecy aspect of speculative trading is often one of the first thing a trader notices.

Now I really wonder if that's not a necessity of semi chaotic systems. A predictable game has no gain to offer, a fully chaotic game is unplayable.. the players will settle on a few emergent patterns to create a form of ladder.

> emergent patterns to create a form of ladder

While I think there are very strong whiffs of alchemy (i.e. belief) in a lot of forms of technical analysis, a number of these patterns have a psychosocial story to them, and the pattern itself is the fingerprint of how that story manifests. (Much like how an earthquake leaves a predictable pattern on a seismograph)

You say alchemy I say superstition. Actually trading at the quant level was the deepest anthropological experiment I ever saw. So much reptilian emotions it was incredible :)

If more and more people know this, it loses power

That depends, the prices sometimes jump up or down the TA lines and moving averages, that is when lot of people get out but then the trend reverses and follows whatever the original pattern was.

So you still have to make a decision which may or may not be right.

It isn't whether or not more and more people know it, it's weather or not they can overcome their emotions to use it effectively. And I think that proportion of people will continue to remain insignificant

Does anyone actually use technical analysis?

I do

I don’t plan all my investing around it of course, but being able to quickly read a chart with oscillators like RSI, or spotting bearish patterns (head and shoulders, bear flag) can tell me that maybe I should wait a bit more before entering to see if it actually falls, or if it breaks out and establishes a more uptrend

TA = good to get an idea what’s going on in the market until now

No one worth anything in finance. Plenty of folks in Main Street do, but they don’t know any better, so you’ll have to forgive them.

The lesson is simple: you can’t predict future price based on price history.

A better phrasing is “Does anyone use technical analysis exclusively?” …and, perhaps, “As a trader or investor?” A select few billionaires have made their fortune through programmatic trading but I suspect the data is not restricted to stock price history.

I suspect the market has the quality of the particle-wave duality. A little Heisenberg’s Uncertainty Principle in play.

Edit: (e.g. once you find a TA method that works exceptionally well, and the market learns of it, it’ll cease to work as well. Hence the teams of developers at all the firms and funds.)

I did few times and made some money ( although I am still not sure if it was luck or my skill) but in the end watching the market all the time got boring and I still had to do my job so I stopped.

I’ve been doing a lot of technical analysis for funsies… using market data from the game Old School Runescape (an MMO with a centralized exchange for trades between players).

It’s really fun! Much easier to find success when you’re not in a zero sum competition against a bunch of quants and don’t have your whole livelihood at stake. Highly recommend it for anyone who wants a “day trading simulator” experience.

Many academics have studied momentum, both cross-sectional momentum and time-series momentum, and many quant firms use it as one of their factors in trading stocks, bonds, and commodities.

Not any real money. Technical analysis is toolbox for new traders before they lose money to institutions and quit trading.

Almost all technical analysis is just slicing and dicing a moving average. There is enough of them to try to keep people trading for some time before giving up.

A single price series just doesn't contain much memory.

Bro, would I be driving a Lambo if I didn't? Sign up for my online course to find out!

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