the bursa journey that worked for me. 2000-2019

Does technical analysis really work? Discussion.

Philip ( buy what you understand)
Publish date: Mon, 20 May 2019, 09:49 PM
How to invest for the long game.

A formal question, and a hopeful answer.

Does technical analysis, or momentum trading really work?

Is there any full time traders or technical trading specialists alive or dead that I can read about and learn more from?

Anyone able to back up with 10 years of portfolio growth using only charts, momentum investing and purely technical without using any valuation or understanding of the company fundamentals? I would very much like to learn more about such a person, they all seem to be very mysterious and hidden. Hopefully I can get in touch with one, as I have attended this year alone 2 sessions of technical analysis courses and have found it to be unhelpful.

My experience is technical analysis has always been that it is highly stressful, always shifting, no single strategy can work over a long period of time and is easy to understand and apply, but very very hard to earn money from consistently.

Majority of technical analysis specialist I have met supplement their income by teaching others how to trade and selling ebooks and classrooms.

Day traders usually trade using OPM raised by bank investments, and leave the banks after a short stint( it never lasts).

And yet I see more and more trainers and users of technical analysis and chart readers...

Hopefully I get to attend and meet a good teacher soon and learn something new every day.

Dear i3 community.

Please advise,


Be the first to like this. Showing 22 of 22 comments

(US/CHN trade war doesn't matter) Philip

Somehow this is quite sad to me. I would assume that Charlie munger was very correct.

"Mankind invented a system to cope with the fact that we are so intrinsically lousy at manipulating numbers. It's called the graph."

2019-05-22 23:36


Prop trading for a commodity firm in Sg & CIMB before for the past 10 years. Yes TA works but 99% of them are craps.

2019-05-22 23:41


technical trading.....its not book knowledge....its mind to mind transmission.

2019-05-22 23:43

(US/CHN trade war doesn't matter) Philip

I see. But ta works and 99% crap sounds like an oxymoron though.

But I have the same trouble as well.

So far 99% of the classes I attend and the young ciku who still me their automatic trading programs never seem to work.

2019-05-22 23:45


TA is a very broad term. indicators like Moving averages , MACD all these are the function of price. When the price moves in one direction at given time period , its actually called trend ( first derivative of price ) . When market starts to trend , all the funny TAs taught by cikgu works - in fact everything works including TanEnd's shitty stock picks when the
price starts to trend.

2019-05-22 23:54


its mind to mind transmission.

what can be written in word is not the truth

truth has been to be experienced and words are not even needed.

mumbo jumpo?

yes and no.

its jumbo mumbo for those who try to find reality in words, its not mumbo jumpo to those experiencing it.

anyway, trading is not for you.....its for me.

2019-05-23 00:04


Technical comes from fundamental.

2019-05-23 00:10


Maybe Chart is not the focus. Focus is the reading money flow into a counter which indicate buying vs selling force. Perhaps chart capture traces of the money flow. Using the tools in chart guessestimate/read the money flow then ride on the flow trend and make money. Guesstimating/read the money flow requires tuition fee/mistake, brains and experience. My 2cents

2019-05-23 00:11


all indicators are formed from chart candle. but one thing TA cannot predict is unforeseen future events like wars, some terror attack, sudden spread of fatal virus, political act, sudden policy change etc. TA also cannot predict the QR, because it is confidential. but might have small clues that we can observe.

2019-05-23 00:17


So there can smart money flow which means perhaps insider info knews some good things in the company and get in 1st. Or dumb money chasing purely on price action. If u can difference which one from chart, then u find your edge as chartist?
So fundamental or technical guy can't predict future event? Perhaps it a correct statement.
But u can follow smart fundamental or smart technical guy, then u be the follower and make money. Vice versa.

2019-05-23 00:26


putting it in perspective. I think trade war is real and trade war will hurt. One year from today, DJ will be much lower.

I have reduced my exposure substantially ...and I know ....a lot more people lose money average stuffs and playing in a bear market.

2019-05-23 00:43


very educational....why DJ don't crack....why still trading strongly?

me?? I believe markets not as smart as people give them credit. Those wall street guys not that smart one.

2019-05-23 00:49


Hi Philip,

How about "Reminiscences of a Stock Operator" if you not already read it.

Its about the life of Jesse Livermore, made hundred of millions during the Great Depression and losing it all after, then committed suicide.

The book was written in 1923, almost 100years old now.

Apparently a must read for all traders.


2019-05-23 14:49


^ yes I read it for > 10 times. It’s a MUST.

2019-05-23 14:51


And the "Market Wizards" series by Jack D. Schwager.

He interviewed numerous successful traders and investors to give insights on stocks trading/investing but mentioned no specific trading system.

I guessed as soon as one trading system works well, other traders will use the same, nullifying the edge on that particular system. Hence, no technical trading system can work in the long term.

2019-05-23 14:59


by AmateurApprentice > May 23, 2019 2:59 PM | Report Abuse

And the "Market Wizards" series by Jack D. Schwager.

He interviewed numerous successful traders and investors to give insights on stocks trading/investing but mentioned no specific trading system.

I guessed as soon as one trading system works well, other traders will use the same, nullifying the edge on that particular system. Hence, no technical trading system can work in the long term.

that is the essence

2019-05-23 15:08


its also called game theory.

2019-05-23 15:09


Correct me if I am wrong, Ray Dalio started his career as commodities trader before Bridgewater Associates.

Not sure if he's still using any trading system in his company now.

2019-05-23 15:26


AI can master the game of GO........but AI cannot beat stock market..............fierce.

2019-05-23 15:30


mostly people are con by variances, randomness..........but share market for beginners...........stick to quality is best advice.

2019-05-23 15:37

Joon Chan

Trading just on technicals makes no logical sense. The more fancy it is, the more bullshit it is.

Price x Action (volume) trends do make alot of sense. And they are actually identifiable to a very high degree in 2hr - 1 week time frames.

I'd think trading around quality stocks to be sensible.

You keep your core portfolio, concentrated and unsinkable. While your ship sails to it's next earnings date, it'll bob up down left right sideways.

Buy low - sell high technical trading is difficult. When can u buy low? when can u sell high? Q up like an idiot. And if your'e t+2 trading, then you run out of time.

Instead, profit on your core positions, by "shorting" without really shorting.
Every few days, when you observe that you get to sell on some mini-trend, 2-3% higher say, sell like 200k worth at one go. This is your "short" price. Then GTD orders for lots at 4-5% below your short price. Due to volatility, or whims of people who are not patient, your limit buys are gonna fill quite quickly (see, you can enter Q to buy at any price if u have cash, but you can't enter Q to sell high if you don't have the shares!)

Boom. Now you own more shares even in a sideways period.

you can also trade between your own holdings, there is bound to be 1 stock doing well trending up, and the other trending down daily. Shift some between the two, easy.

It's not so time consuming, but im sure it pays more than a job =P

2020-01-14 06:51


I'm not to sure if this is helpful for you and honestly i'm an extremely new trader on the stock market.
That being said, i did dabble in the crypto market in 2014-2015.

Specifically, i was involved in the buying and selling of alternate crypto-coins. Looking at today's market, if BTC is tier 1 and lite-coin and etherium was tier 2. The market I was dealing with was tier-3 coins. It was a lot crazier back then with an average of 3-5 new coins being *coughed* created everyday.

On average, maybe 10-15 coins would be added to an exchange every week. And for a while it would be a constant cycle of pump and dumps.

At the time, there wasn't much in the way of Fundamentals oh sure we could take about the number of coins to be generated/the code/the concept but it was pretty much pointless because they were pretty much clones of each other just with different names. Besides, none of that really matters because the most important question always went unanswered, who is using it?...

TA was mostly the only explanation one could give if they wanted to explain a trend on the market. Heck, i remember everyone getting excited if they could spot a pump and would inform everyone else to join in to pump. Human's are funny that way they never think about what if they are the one being dumped. And even if they are, it's ok, next time i wont be so greedy and just sell earlier.

TA skills developed by a normally successful trader on the Stock Market could not be applied to the coin market or at least the ones who tried had pretty bad ends. The market was too unregulated and wild. The coin's almost had no history to speak off with oldest being a few months old.

Imagine dealing in a stock market with 100% retail investors. One sneeze could cause a massive wave of panic buying or selling.

The smarter one's reverted to the basic concept of TA, apply moving averages over time, taking note of anomalies in price movements, etc. Those actually had decent results at scalping. I remember reading on one forum where the guy was so happy his ability to spot pump and dumps had improved from like 15%-20% to just around 50-55% and offered to teach for a price. I believe a lot of people took him up on it.

Anyway, from the above rather long winded explanations. I think TA does work provided 2 criterion are met
1) it must be a stable environment (for stocks it should be bursa rules and reg, the law, security commission)
2) there must be enough data points to actually establish a recognizable pattern (this was seriously lacking in crypto trading at the time).

The approach of going back to basics and building on it showed marked improvements as such it is conceivable that TA can be perfected to a point where it can predict price movements in normal environment to a very high degree but its very hard to make money in such a stable market.

Trouble is TA tends to go haywire during volatile times. Pandemic,QR which shows a 100% increase in profit,etc and IMO its because there are too many outside variables that are not normally considered being ignored.

For example the recent rubber glove craze, the oddities from what i have managed to note over the last few days are

1)price movement was quite heavily influenced by retail investors,
2)Foreign investment went outwards rather than inwards. It is to my understanding that this is anomalous as usually it has always been foreign funds to have been first to take advantage of a down market.

In summary, If your a pure TA specialist and only TA then you should be able to make a decent living during a normal period of time (but the world is not an utopia so it wont last long.) A purist TA will likely starve in times of panic unless they revert to use of the basic concepts of TA to make ends meet by scalping.

Something else will always be needed to supplement TA skills be it FA, voices from God or even a blindfolded thrown dart. Otherwise, all the TA skills will end with buying high and selling low or chasing trends at their end.

2020-06-04 23:56

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