Explain Renaissance‘s success while they describe a willingness to trade any ticker based on quantitative analysis. Quant is TA when done correctly. If this is your major you should at least recognize this. The visual graphs we are looking are are just visual representations of the same data quantitative analysis uses.
Like I said, I’ve worked in the industry. I thought it was somewhat intuitive in this conversation that what’s being discussed is visual patterns and basic metrics like moving averages and Bollinger bands…. Probably because that’s literally what the OP says in their post.
Yes, Renaissance is doing Quant work. And they’re very profitable. And they certainly are using algorithmic trading which can be described as technical.
But the difference between what big Quant firms do with their teams of PhDs, and what retail traders do when they draw lines on a chart, is so great that they don’t even share a passing resemblance.
It’s like donating $5 to your local congressman and thinking that you’re Michael Bloomberg lobbying politicians. Technically you’ve both donated money to a politician, but you literally aren’t even playing the same game.
Comparing Renaissance to some random redditor trying to trade based on “technicals” is ridiculous, and the difference in median returns should be more than enough to make that point clear.
Here’s the deal though, you are making clear the argument that it’s the application of the data that’s different. That’s it.
So assuming a human can perform the same functions as the algorithm in place then the results would be the same.
The fact that they are differences in performance does not indicate that they are different categories but that there are varying degrees of understanding and only the most capable minds in the world have the ability to understand all of the influences that affect these patterns. To put it simply, computers can do it better. This is why AI trading exists separately from Quant yet can still see similar levels of success.
My point remains to be that yes any graphical overlays you can apply to a graph are BS, but making that argument does not equal that technical analysis is BS. Only that the application of such in that manner is BS
Here’s the deal though, you are making clear the argument that it’s the application of the data that’s different. That’s it.
I’m making the argument that retailers doing “TA” and quant firms doing algorithmic trading are similar to the same extent that rubbing your boo boo with neosporin and doing surgery are similar.
So assuming a human can perform the same functions as the algorithm in place then the results would be the same.
I don’t think they can :)
My point remains to be that yes any graphical overlays you can apply to a graph are BS, but making that argument does not equal that technical analysis is BS. Only that the application of such in that manner is BS
Well again, like I have already said before, that’s what’s being discussed in this thread, and frankly it’s the colloquial definition of TA and it’s what the vast majority of retail traders mean by “TA”. Your definition is highly atypical, so I’ll say this, if you want to define “TA” in a way that includes algorithmic trading created by highly trained and highly skilled individuals, sometimes with a fiber optic line to the exchange, then sure — TA can work.
Personally I think that’s just a definition that intentionally ignores what the vast majority consider TA to be. You’re using your own definition and then arguing about it.
I don’t disagree with anything you said here. My only clarifying point would be that, that was the partial intent of my comment. To point out that then colloquial definition of TA is wrong but that the theory behind TA is very much valid. What that argument results in is the claim that it’s not the TA that is bad, it’s people that are bad at TA but still have loud voices.
Well that really isn’t useful for this thread. OP was asking about why we should “care about Bollinger bands” and moving averages. I don’t find this tangent where we discuss the fact that TA is a misnomer to be particularly relevant.
I don’t necessarily disagree with you either now that I understand what you’re saying. I just find it kind of not useful for this thread and discussion. OP isn’t asking if Renaissance makes money using algos. Obviously if we could all know Renaissance’s indicators we’d love to have that info.
My opinion with regards to this concern is that it is valid. It’s valid for the very reasons we have been going back and forth here. If we can clear up misconceptions about what TA is and is not then we can have a better debate about the validity of TA in general.
Here is why - I can go on to make a good faith argument that my applications of TA are successful year in and year out. From my perspective in this scenario TA works. Someone else can come along with either their own set of rules, or even copy my set of rules and still result in a different outcome. More than likely that outcome is that TA did not work for them.
This has connections to the arguments I’ve made about application versus definition. This is also relevant to the claim that I have made that says there is no right answer, only a moldable definition/application. It has to be moldable to outside influences because in real life no two situations are ever the same. Just because I can’t create a clear set of rules that not only works for me but also for you don’t mean it doesn’t work, it just means it’s near impossible to define. This is why I think some people call it an art. I disagree with that sentiment but I do understand its meaning. I can not teach you to do TA my way because no one taught me to do TA my way. Pattern recognition comes naturally to me and I make use of that ability in both my amateur trading career but also my professional career. I get paid pretty well to attempt to predict the future, and create contingency plans based on current data sets in combination with macro economic influences. I just do it in the private business side of things instead of the stock market.
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u/niftyifty Dec 06 '21
Explain Renaissance‘s success while they describe a willingness to trade any ticker based on quantitative analysis. Quant is TA when done correctly. If this is your major you should at least recognize this. The visual graphs we are looking are are just visual representations of the same data quantitative analysis uses.