Chartered Market Technician

If you’re looking into TA, you better study time series as well (check out Hamilton’s book) and coding in C++. Without building algos, the market is moving to fast for the TA of yester yore…
You’ll get totally hosed like all the other retail sheep…
 
bchadwick Wrote:
——————————————————-
> ASSet_MANagement Wrote:
> ————————————————–
> —–
> > “Inside the House of Money” praises TA a lot.
>
>
> I’ve come to the conclusion that one can’t really
> do macro without paying attention to technicals in
> some capacity. Some macro types are just
> technical traders that trade across different
> asset classes. I can see why they are categorized
> as macro, but in my book, you ultimately have to
> have some underlying vision of fundamentals to be
> a true macro investor (as opposed to a trader who
> just trades broad asset classes). The
> fundamentals give you a sense of over/under
> pricing, and technicals give you a sense of
> timing, which gets down to making decent
> risk-reward plays. You can be right on the
> fundamentals, but if the risk-reward isn’t
> favorable, you shouldn’t pull the trigger. TA can
> help you decide if there is a good risk-reward in
> there.
Exactly, and people who ignore this invent terms like “value trap”
 
Keys made a good point that I was thinking about mentioning, which is that high frequency stuff (even stuff as “low” frequency as swing trades), is almost all technical in nature, even if perhaps the indicators and oscillators aren’t the standard kinds you see in traditional TA books (but I’d wager a lot of them are conceptually similar, but just measured differently).
For example, “momentum” is basically a technical measure that suggests trending at some specific time interval. Lots of quants use momentum, and a number of portfolio managers do too. Sometimes, these are the same people who laugh at TA and how ridiculous they say it is. But heck, they’re using a trend following indicator - but somehow it gets laundered by throwing it into an optimizer and calling it “quant.”
 
nupps,
You are exempt from 86 when you pass L2. Not sure about CMT, but the 86 wasn’t all about technicals…It was much more about CFA L1 & L2 then anything else, so surprised to hear it will exempt you.
 
Bernanke Wrote:
——————————————————-
> mo34 Wrote:
> ————————————————–
> —–
> > Can you find any model that actually works (
> back
> > tested for years) ?
> >
> > I remember reading a book that tested the most
> > common TA models ( momentum and reversal
> models)
> > and proved that they do not add any value when
> > commission and slippage are included.
>
> can you find any FA model which actually works,
> back tested for years?
>
> I have also read some research papers which have
> tested most common TA models and concluded that it
> doesn’t work.
>
> The point is subjectivity, when you do TA, you are
> ready to accept that your strategy will fail but
> more importantly you know what kind of news will
> make that happen.
>
> I have really never seen anyone who does TA
> without looking at news and fundamentals, neither
> I take TA as set of arbitrary rules, and many
> times different rules contradict each other. I
> take TA as a tool to gauge behavioral aspect and
> sentiment of market, I combine it with FA to make
> final judgment and FA doesn’t means that EMH is
> true.
>
> This is an eternal discussion, and it can go on
> and on, you really have to use it yourself to find
> it’s worth, rejecting it just by testing a set of
> simple rules won’t help you any bit, it didn’t
> helped any professor who published such results in
> a desperate attempt to publish a paper. TA is used
> a lot in market, most of the time its used along
> with FA.
So do you know of any Technical model that works ? or even worked for sometime and stopped working ? I am not interested in subjective stuff (FA included), only trading rules that can be programmed and tested.
 
There are a few general TA rules that generally do work with high probability. But once you start going into the really specific buy/sell indicators like specific candle formations and what not, then it becomes much less certain
 
mo34 Wrote:
——————————————————-
> Bernanke Wrote:
> ————————————————–
> —–
> > I’m also signing up for it. I’m not sure about
> how
> > the value of certification, never saw any
> opening
> > asking for CMT but I just want to learn this
> stuff
> > thoroughly.
> >
> > I was never very fond of TA when I decided that
> I
> > want to make a career in finance. Then, slowly
> I
> > started paying attention to TA when I
> interacted
> > with some traders, and now I’m completely
> addicted
> > to it. When I want to research any stock, I
> look
> > at it’s technicals first. I mean I can’t look
> at
> > any chart unless it’s a candlelight chart, with
> at
> > least 5-6 technical below the chart. TA stuff
> is
> > simply addictive if you look at it to estimate
> the
> > market sentiment and behavioral aspects, that’s
> > what I feel.
> > Frankly speaking, I now believe that EMH is
> total
> > sh!t and I want to be a trader actually.
>
> Can you find any model that actually works ( back
> tested for years) ?
>
> I remember reading a book that tested the most
> common TA models ( momentum and reversal models)
> and proved that they do not add any value when
> commission and slippage are included.
For what it’s worth, traders with decades of success are big believers in TA. You can read about them in Market Wizards, Inside the House of Money, and Hedge Hunters among others.
Closer to home, JDV has always defended the virtues of TA and I worked at a firm where TA was the main trading tool.
Just like anything else, it might not work for everyone.
 
^ yes, but are these traders now dinosaurs…
We can say history repeats itself, blah blah –> but do these individuals ‘stick to their guns’ since they lack the new skillsets required to suceed in the markets these days: i.e. advanced maths and programming.
 
Is CMT a must for traders? I remember seeing the number of charterholders (x,xxx last I remember) and I thought it was kind of an optional thing.
What’s difficult for me (well, i’m just ignorant about it)is to tell is how much TA one would need to know to become a better investor. There are a lot of books about it (and the CMT program seems to cover a lot of them).
It’s true that traders of ‘Liar’s Poker’ aren’t around anymore and perhaps a lot of the major indicators are not effective (I’m not sure about this, somebody please chime in then..). I do wonder how difficult it is for discretionary/non quant traders to trade with the high frequency traders.
 
A company’s stock price moves by 2 different factors.
1. Valuation, multiples, forecasts, etc.
2. Supply & demand of stock, fear, greed, speculation, irrationality, etc.
FA addresses #1.
TA addresses #2.
To those dismissing TA, recall that semistrong EMH dismisses FA being able to beat the market/index.
 
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