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disclaimer: I've been out of this game for a long time. This is simply an outline of how the current price pattern follows a known phenomenon called the "Bearish Pennant" (Inverse Pennant)

This is for all you newbie speculators out there! (I've seen your post count and join date :P)

The price function is a complex thing. It is dangerous to go with your gut unless you know your gut is very smart. Price movements are stochastic, meaning, like in quantum physics, they are impossible to predict with 100% accuracy. Don't be so sure of yourself. Never bet more than you can afford to lose. Quantify and minimize risk to the level with which you are comfortable. And I sincerely hope you didn't get burned too bad in this recent recklessness.

Fortunately, although price movements are stochastic, they do exhibit time-dependent autocorrelations. This just means that there are deterministic rules in play as well, whose influence is visible through self-similar patterns.

A basic analogy goes as follows:
Imagine betting someone a bitcoin that you could tell them the exact shape of the next snowflake to drop. This is ludicrous, and you would obviously lose, as the process of snowflake formation is so chaotic that that knowledge is profoundly beyond your grasp. It would make sense to bet that the next snowflake is hexagonal though, and you'd take the money of any fool who took that bet. Because of the physical constraints of the shape of the water molecule on the chaotic process of snowflake formation, it is possible to make some, limited predictions.

Let's see some of these self-similar patterns, then!

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http://s8.postimg.org/cidc7s6qd/crashtriangle.png

-===-

HANDY GUIDE:

A is easy. The first confirmation of the downtrend occurred when the price formed a symmetrical top with $266 at its peak. Before the move up, there was a brief low-volume period around $230. The breaking of that support confirms the downtrend.

B is the triangle consolidation shape that is what is referred to as the "pennant". In my physics-based model of price, it is analogous to a Newton's Cradle (http://upload.wikimedia.org/wikipedia/commons/2/20/Newtons_cradle_animation_new.gif) that is quickly losing energy (oscillation with decreasing amplitude). The phenomenon of triangle formation is widespread (there was a brilliant one around $140 that was a bullish pennant -- broke out topside). These formations must be accompanied by decreasing volume in order to behave predictably.

C tests the critical resistance. It is the interesting 'last ditch effort' of the suppressed upwards correction. It is referred to as a "breakout" both because it breaks out of the tightening range, but also because the candle has a suddenly large volume in stark contrast to the waning volume inside the formation. This fully confirms the pattern. This candle generally reaches only as high as the highest point on the wide back-end of the triangle (in this picture it only reaches halfway), but is a nasty bulltrap* because it signals the failure of the price to overcome the resistance (white line near C) which the price was consolidating against. This is followed by the continuation of the trend, D.


*Why does this occur? Why not an immediate downside breakout into the trend continuation? The 'signal' explanation (above) is decent in terms of basic understanding, but is not complete. In my physics model, it is equivalent to momentum. In order to jump, one needs to push against the floor with a force equal and opposite. In a way, the price is 'bouncing off of a ceiling' as opposed to 'jumping', where the price pushes against the critical resistance to gain enough momentum to continue the downward motion.

-===-

Also, for all you "hindsight is 20/20" naysayers, I had plenty of foresight. I hope this will help my somewhat tarnished TA reputation  :D

From SwannyMatt's Bearish Inverse Pennant Chart Formation (https://bitcointalk.org/index.php?topic=172903.0)


-===-

-arepo

if you profit from me, help keep it free!
18N9md2G1oA89kdBuiyJFrtJShuL5iDWDz
I put in a lot of effort and time to present detailed analysis for the forum's benefit,
If you learned from me, please take the time to tell me what you think it's worth.

Follow up:

So I can hear you all saying, "hey, you can't show self-similarity with just one example!" I just wanted not to overload the newbies. My analysis is very technical.

For all interested parties, I do have a particularly beautiful example of self-similarity. This chart was saved while we were still in the mid-$100s:

-===-

http://s21.postimg.org/rcwx6ad2f/hugelegtriangletop.png

-===-

Outlined is a mid-scale "triangle reversal" pattern in the ADX which has the same behavior as the smaller-scale inverse pennant in the OP. It shows an oscillating 'ascending triangle' pattern that close with a diverging "momentum" and "direction" line. I'd upload the updated chart but the site is currently down, so I urge you to look for yourself and see what happened! The ADX momentum line overshot, mirroring* the bulltrap (this is more than just coincidence, even though the quantities measured, price vs momentum, are much different), and then fell in step with the downward movement.

[ *The shape is similar because similar 'physical' constraints are acting on the quantities, but the nature is quite different. The blue line follows price 'momentum'. It is an oscillating formation because volatility can be modeled by a modulated sine curve, and momentum follows volatility during a trend. When price oscillates, it is as if there are "equal and opposite forces" acting on it, like the Newton's Cradle, but when volatility oscillates, its amplitude changes over time in a self similar way, as in composition of sine functions.

That is, if the momentum line of the ADX were averaged and smoothed, it would behave like a stretched-out sine function itself, with near-linear slopes and large, shallow peaks and troughs. So it can be modeled as a sine curve tracing out another sine curve on a much larger scale. (More self-similarity!) ]

Anyway, the point is if you average out an ascending triangle as seen in the ADX in the $100s, you get an upward slope. The upside breakout represents the peak in momentum, which is a reversal signal. Same pattern, different constraints, coinciding with mathematical harmony! This is why I love TA. ;D

a bunch of bear's hindsight BS

Cool, where do you think it is going now? haha  ;D

I do write-ups about my models after my models have been exhausted (public predictions can create complications). There is more work to be done to call a bottom, and models become less accurate the more extrapolation is done. The best I can say is either a mid-term downtrend (slide) OR more vertical movements as EA's and other big wallets unload some of their coins in order to realize recent gains, and then an immediate resumption of the uptrend, as the knives will overshoot and the correction upward at the bottom will immediately be supported by the quickly growing userbase. I have no targets but we're incredibly overbought. Absolute bottom ('impenetrable support') is probably around $10-15. I have no coins, but I am no bear. I will be well-stocked in cheap coins once we bottom out.

If there is demand, I will present another write-up in a week. There will be enough new data to start projecting again.


are you butthurt? this is some of the best work I've done :(
you're quite good at what you do, too. i would appreciate constructive criticisms, if you have any.

I'm just demonstrating TA for those unfamiliar with it.

absolutely hindsight. This guy has been silent since 10 Mar and said nothing until the crash happened.

His last call of "bubble top" was on 7 Mar when the price was about $49: https://bitcointalk.org/index.php?topic=147549.msg1594116#msg1594116 . And he went completely silent since 10 Mar. We all knew what happened since then.

People followed him are still losing money.

Follow him at your own risk.

are you guys my sworn enemies or something? geez.

you didn't even read my post. the OP is stuff that's ALREADY HAPPENED. i'm not making any predictions or attempting to garner any followers..

please stop spamming my threads with general flaming.

context.

i meant that this was an after-the-fact writeup, not a prediction.

What is the merit of TA if it is not used for prediction? You can always find this and that pattern by digging historical data

His analysis posted here isn't to predict the future, it's to learn from the past. TA, especially in Bitcoin world, is pretty reliable. But it shouldn't be a domain of few wise guys. It's best to do your own TA based on your risk management. Arepo's post are great for people that want to learn exactly this.

Can you please stop spreading this bulshit!

TA ist a way to make statements which look serious, but have no meaning, no substance, no predictive value.


Of course it is "pretty reliable" if you are saying exactly nothing!



All of your TA statements comply to a single pattern

Event A will happen, when it is confirmed. When it is not confirmed, it will not happen.



It might be quite enticing to engage into all this math and graph drawing game. But basically it indicates that you're lacking proper education in math and engineering. The first thing you have to learn is to cross-check your own actions critically. This is what you fail to do. And as a consequence, you become a victim of your own delusions. After some time, you start to believe that all your efforts have payed out and helped you in trading.

In fact, you could have arrived by exactly the same trading decisions by just using common sense.

So how much exactly have you earned in trading using just common sense?

probably a lot more, since I am not wasting time and energy with feeding mysefl with sick, pseudo-scientific believe systems!

And let me add a warning to all newbies:

Don't waste any time trying to "learn" the so called "Technical Analysis"

It will cost you a huge amount of time, trying to figure out all those weird concepts, formulas and diagrams, especially when you have no scientific and engineering background. It might look enticing, since the proponents of TA claim all the time that you could somehow uncover hidden structures. But those people were never able to prove that those structures do actually exist, or are just a mental projection in hindsight.

So you sold at 260? And then bought at 110? And then sold second time at 180? Wow, I envy you.

Not this shit again. Like I said before technical analysis is total bunk.

The so called "technical" "analysis" is very similar to esoterism.

It promises to uncover hidden structures. It appeals at our appreciation for the wonders of technology. It combines allegedly technical structures with an aura of mystery. It appeals at our curiosity and readiness to "get into" more complicated matters and relations. And it flatters our ego, since it makes us believe that we have "earned" the trading gains through the effort fed into figuring out all those formulas and drawing all these involved diagrams.

More "technical analysis" from a guy who hasn't made a single right call.. no thanks.

Why I don't agree with everything arepo says, he did say that we will fall far from $7 back in January 2012. And if you remember correctly, price went down to sub $4 then, before regaining strength a lot later.

Ah, so he was right in 2012 once. A broken clock..

why all the hate guys? if you don't like my analysis, don't waste your time and energy snarking about it. every time you post you bump my thread and it gets more views :D

this thread was for people new to TA who might want to learn a little about it. i know many of you think TA is bunk, but making that assertion over and over again in all of my threads gets real old real fast considering that there are a number of people who would actually appreciate this work.

i tried to have an open conversation about it about a month ago in "in defense of technical analysis" and i got more accusations of being a charlatan. why do you think i left? because i was ashamed of my incorrect predictions? i can handle being wrong, it happens to every trader. can you handle me being wrong?

most of the predictions i do make, i do not post. like this one. i recognized this pattern, and the 'prediction' of the resumption of the trend played out like it often does. after-the-fact, i wanted to share this textbook inverse pennant. SwannyMatt says basically the same exact thing in this thread (https://bitcointalk.org/index.php?topic=172903.0), but he has no group of dedicated "PROTECTORS OF THE PEOPLE" to remind everyone to ignore him...

you're seriously damaging my reputation over a personal vendetta surrounding the fact that the last time i did serious work i believed that the market was heading in the opposite direction as you. that doesn't make us enemies, that's silly.


thanks for the backup haha

yeah i've been doing this awhile but my model was way off earlier this year. i've been a bull for most of the time i've known about bitcoin and the one time i convince myself that the price isn't stable, we shoot up to record-setting highs :D oh well. at least there was no skin off of my own back.

Arepo, basically this is not personal, but you are posting in a public forum and your behaviour is inacceptable.

You post musings and unproven and insubstantial claims.
But you make them look as if they where gained in a methodical way by an exact engineering method.

We pointed out the errors in your reasoning and methods numerous times and in all cases you just walk away, and open a new thread to "teach the masses". There you repeat exactly the same ill-guided conclusions and continue to promote your method of so called "technical" "analysis". This more and more arises the suspicion that you want to spread a believe system. Which is unacceptable in this context.



It is irrelevant who is posting this. The hate is not personal.
But you get to feel it since you and your fellow TA believers are abusing math and engineering to promote mythological thinking.


more precisely, we pointed out that we expect a methodical proof from you.

The null hypothesis is that the so called "technical analysis" does not make any substantial predictions and does not show any substantial phenomena and does not yield any practical results which could not be achieved with simpler means. Now your duty would be to disproof this hypothesis, thereby showing that TA is indeed a substantial method.

But instead you just walk away and open a new thread, and repeat the same pattern of reasoning as if we didn't point out the errors in your reasoning.

And it is especially infuriating that you try to lure the newbies into using your ill-guided "method" and inconclusive reasoning.


This is exactly how this self-deception seems to work

• you "recognize" a pattern
• you fail to apply your ability of critical thinking
• you don't account for your presuppositions
• you don't account for your choice of methods.
• if it doesn't work out, you forget it
• if it looks like a real phenomenon after-the-fact, then you advocate it as an "textbook example"

To make this point crystal clear:
It is not the fact that you do predictions.
It is not the fact that some of your predictions turn out wrong.
It would not be a problem if you'd share the "musings of an experienced trader".

It is the fact that you pretend to teach a serious, rational, methodical discipline. Which it isn't.

Great thread  :)

haha thanks. this is an old thread, and i forgot to thank Ichthyo for his last post, because i did take a step back and reassess the rigor of many of my methods. asking questions like "is this falsifiable?" and "is the error on this trendline measurable?" has helped me become more accurate and more precise.

anyway, i posted the chart in question in your thread so that you wouldn't have to hunt.

--arepo

Ichthyo, technical analysis is a well recognized and in the right hands predictive tool to accompany rational market research.

It does not provide answers on its own. Two patterns may be identical, but if one has a crowd screaming "BUY" at it and the other "SELL" they will have different outcomes.

Your entire argument seems to be that TA is tantamount to reading tea leaves. I urge you to do some research, maybe borrow a book from the library and reconsider.

Technical Analysis is the finance equivalent of astrology. Fancy lingo, "reverse prismatic oscillations". Shut the hell up.

Really, then why was Aerop's defense to every attack that none of this was predictive? If it has no predictive value, then stop dreaming up a way of dressing the past in technical jargon to make it sound like some sort of higher organizing (by implication, universal) principle is at work.

And its quite ironic that you attack on me consists of a picture where a child has difficulty reading. Try using english and not a JPEG next time - it only reveals your own inability to articulate a response.

Don't ask me. If used right it is predictive.

There are well researched and explained reasons behind some of the patterns you see. How can you say it's worthless if you know nothing about it?

Maybe so. But not for predictive value. If TA was of significant use, there wouldn't be a market.

A long time ago, in a market far away, there was a little stock named LCC, or US Airways. Now I'd been watching this stock with some interest. It had just had a significant drop, I believe, and there was news (like there is every six months with these guys....) about a potential merger. Volume was up, and the last close had been iffy.

The market opened low. Volume was all but absent. The price was at about $1.10 I believe. Trading was sideways along a knife edge. I watched, I didn't take my eyes off that screen.. and about an hour in, I saw a tiny dip. BUY.

Within minutes it went vertical, up to $1.90. I held on at the $1.70 plateau and correctly timed the peak at $190, a third plateau, selling before it fell back to $1.50.

How did I do that? Not only did I hear the news and knew the market was on edge, I knew it was either going to collapse further due to the bad news causing the prior drop or break upward on a panic buy.

How did I know that? By seeing the volume so uncharacteristically low, and the sideways pattern, finally confirmed for an upward movement by the dip, which I knew was about to cause a buying frenzy snowball. If it had moved upward out of the range, I would've gone off to look at something else while it collapsed.

TA has its place.

Cool story bro. You got lucky. Well done.

And this chain of events make you believe that it was TA which "told" you so?

More specifically, which technique did you apply to uncover a hidden pattern, which an TA unaware guy would never be able to see? So you got a head start?


This is exactly how it works. People put a lot of effort into learning TA stuff. And this effort makes them think that they must have gained some additional skills. From that point on, they attribute every success to their TA kung fu, and of course every loss is attributed to an external obstacle, and eliminated from memory quickly.

Specifically? I could "see" that if things were normal, that stock should've been lazily moving in one direction or another. Instead, it looked like tension-charged uncertainty - specifically, trading within a very narrow range, meaning speculators aren't taking a stand either way - and knowing the two pieces of news good and bad. The comparison of that line, which by itself could suggest a strong breakout, to market sentiment, supported by both strong good and strong bad news, and also knowing that it was a pretty hot stock for traders and was being closely watched and discussed, all confirmed the fact that it was going to break strongly in one direction or another, and keep going.

Seeing the dip confirmed a buy, because with so many automatic traders and hair-trigger fingers watching, a dip would be an opportunity to buy that would be eaten up by everybody watching the tight range, pushing it up out of that range and causing a panic buy. (Which is exactly what happened.)

It's not voodoo and it's not magic. A stock chart will become an open book once you can interpret a chart in the right context. I second guess myself sometimes because the patterns look too blandly obvious, like somebody is trying to make it look that way. Then I remind myself not to be paranoid.

Rusky, I don't question your skills as a trader. Certainly not.

Just your example shows yet again that it's gut feeling and intuitive understanding of a current market situation, which can give you sometimes a head start. You can eliminate any TA related methods completely and still get the same results.

How would I do that if I couldn't recognize:

a) the sawblade range trading pattern, and the implications, and
b) the way other market participants react to various changes on the line?

I could've just as easily figured it was going to be a slow day because the price wasn't moving. Or I could've panicked when it dipped, thinking that was it and it was headed south.

It becomes intuition after a while, sure. But there is still real practical theory behind it, and you'd do well to learn some of it. :)

Confirms exactly my argument. You learned that stuff and now you think it helped you.
But what you actually describe as your actions is just traders common sense. I can't see any method which uncovers hidden structures, or cretaes verifieable predictions.

Please proof that there is no other way finding out.
Please provide a complete account of all incidents, where your method gave you the right indications, and all the incidents were your method led you astray.

Unless you can do so, the conclusion is: your "method" doesn't exist.

try "dampened oscillator" -- that's the model for a triangle consolidation pattern, and those words aren't 'lingo', they're math.


because this thread was not intended to be predictive. plain and simple. this was an outline of a pattern that had already formed in completion -- how difficult is it to understand this? don't necromance my goddamn threads if you're not even going to read them critically, and find my many others if you want to see predictive TA.


if you're feeling up to it, check out this post where TraderTimm explains the mathematical evidence for why methods of TA work (https://bitcointalk.org/index.php?topic=185519.msg1925382#msg1925382).


this is garbage -- really. if there are no 'VERIFIABLE METHODS WHICH YIELD POSITIVE RESULTS AT A RATE BETTER THAN CHANCE" than how can anyone be a 'skilled' trader? what does that even mean? what has ruski learned? if the anti-TA crowd is right, and the price is a random walk, then no method whatsoever can, over long periods of time, yield returns greater than chance.

so go home and buy a lottery ticket. and for the last time, if you have something to say like "TA is bunk" or "this thread is garbage", keep in mind that you're doing exactly what you claim i am -- making groundless assertions. also for the last time, if you want to have a serious discussion about this, start your own damn threads, don't spam mine with single-line, naysaying tactics. C'mon guys...

--arepo

more evidence of the rigor of some methods of TA can be found in this thread (https://bitcointalk.org/index.php?topic=188182.0), where the OP and i came to the same conclusion based upon wildly different techniques. that's called science.

--arepo

also, here's a very simple ceiling-bounce/'doji'+volume hunting exercise i was doing yesterday while daytrading. very straightforward and effective method:

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http://s7.postimg.org/wsmihm3cb/short.png

-===-

--arepo

Sorry for being a noob but what am I looking at here? thanks.  :)

no problem at all.

yesterday, i was shorting on bitfinex during the panic sell. i saw the "bounce" off of the "ceiling" of $150 (which, from previous price data, was an obvious support/resistance). this is a bearish sign.

i opened a short, and then hunted for high-volume 'dojis'. a doji is a short candle with a small body, and a symmetrical range of high and low. when these candles pattern with a spike in volume, it is a very reliable 'reversal' indicator. this is where i closed.

i used this method twice and caught two consecutive tops and bottoms this way. is that any clearer?

--arepo

edit: the second reversal candle looks more like an inverse 'shooting star', but the small body, large volume, and large range proportional to the body are all characteristics of a reversal candle.

in fact, there's a way to understand this more intuitively. 'reversal candles' are periods of time in which the prevailing pressure (buying or selling) changes direction. since there is a struggle, or 'candle battle' between bulls and bears, the body tends to form very small, as the open and close are pulled close to each other by alternately competing forces, while the range of the shadow, or wicks, of the candles is pulled outward by strong waves in each direction.

arepo TA are BS. SELL SELL SELL (we are going to single digit)

EDIT: ahhh you already sold ? It is your problem. :-)
Market is so small, than a lot of entities can move price where they wish.

This--
https://i.imgur.com/DpdspTc.jpg

...reminds me of these:
http://www.1source4stocks.com/technicalanalysis/images/rising_wedge_cont.jpg
http://www.stock-trading-infocentre.com/images/Rising-Wedge.gif

Thoughts?

someone's got to sell at the bottom... pigs gonna pig

and gtfo of my thread with this FUD, i'm seriously tired of it. i haven't even made any bullish calls here....

that being said, discussion and presentation of analysis ITT,

thank you

--arepo

p.s. you might also get the pig award for posting this moments before we resume the uptrend -- by my measurements, within the next 2 hours (if we break out now), or in the next 24 hours (if we consolidate downwards one more time from this test of the $140 resistance ).

good observation!

there is one very important difference. bearish wedges exhibit higher lows and higher highs, resulting in a general upward slope.

this triangle has a level top resistance, and we're consolidating bullishly so far. some evidence for this in this post (https://bitcointalk.org/index.php?topic=183800.msg1948305#msg1948305).

also, this is an old thread that got necromanced, i'd like to keep all current analysis in a single thread, namely "arepo's detailed... ". i'm going to quote you there, this is good analysis.

--arepo

It is not you or your TA who CAN change the price. Market is SMALL, single ENTITY can PUMP or DUMP the price where wish to have. And PANIC will HELP.

now this is an actual point of contention, not FUD, thank you.

my thinking about this goes as follows:

TA demonstrates trends, supports and resistances, and other properties of the price function that help determine which 'moves' are profitable. if someone wanted to dump their coins, they could have done so at the $120 resistance, when we were threatening to crash right through. why didn't they? probably because they think they can get better than $120 per coin -- that is, they valuate BTC as "oversold". this is exactly why i'm anticipating a leg up. the sellers have run out of coin, and this fact is observable in the data. many are on the sidelines, but the selling pressure has abated.

--arepo

You cannot know from TA when I will realize to start/stop PUMP/DUMP. I know how much money I have $1000, $10,000, $100,000, $1,000,000, $10,000,000, $100,000,000, $1,000,000,000 but TA does not know. I'll stop when MY TA will see PANIC.

it has nothing to do with how much money the players have. you clearly did not follow my line of thought. are you familiar with game theory, by any chance?

anyway, regardless, larger players will have less and less of an impact as time goes on, by many mechanisms.

--arepo

Arepo, the way you behave makes you look like an dishonest manipulator.

You constantly turn and distort other peoples arguments, you create huge claims, and when challenged for a real proof, you walk away and start further threads.


you are bending and derailing the argument.

I demanded proof that a proposed method actually yields results.
I demanded proof that the terms and proceedings are actually necessary to arrive at certain conclusions.

And you: you say "if there are no verifiable methods..."

This is how a manipulator proceeds.


Next example of trickery and dishonesty.
TraderTimm does not provide evidence for why methods of TA work.
He just points to evidence that there are some self-correlation in the market rate curves, that they are no random walk. This does not proof anything regarding the existence and significance of the "method" you promote here

So exactly the crucial part of the conclusion is missing. Yet you claim that there is evidence "in another thread"

This is how a manipulator proceeds.

---

But now to the fundamental part


This is a bold statement. You claim that you can show deterministic rules at work below a seemingly random surface.

Yet in any case where your statements were challenged in the last weeks, you were not able to show an objective rule, law, or otherwise verifiable formula, method or even just empirical proof.

When pressed by critics, you always retract to statements like "it needs to be confirmed by later price movement". Or "this thread was not intended to be predictive"


I'll take an example right from this thread.
You claim to show a causal nexus, but actually you only show a mental projection in hindsight.


(1) this can not be concluded from the pattern you see in the graph. You need to look at the actual orders, and watch the actual deals going on in order to determine (a) if there was actually a resistance, (b) the resistance was the same which couldn't overcome by the first upward oscillation and (c) there are no further resistances, so you could call it rightfully the critical resistance.

(2) You can only conclude this in hindsight. We agree that there was a fluctuation in volume, after the downward movement ended. But when the volume gets up again, the movement can indeed overcome several levels of resistance. Or it can move sidewards between the various resistance levels. Or a huge wall just gets pulled away and this prompts new market action.

(3) Here you claim a generality which objectively doesn't exist. Only in hindsight, when you deliberately pick a consolidation break between several downward legs as an example, you make it look coherent as if there was a uniform and general causal structure behind the price movement. But you omit the cases (a) where you could see a triangle pattern, but no bull trap and no 'last ditch effort', and no continued downward move followed, and (b) you omit the cases where in a similar constellation there was a fluctuation in volume but no clearly shaped visible pattern formed before onset of the next market action.

(4) to stress this point: here you give the impression that you can provide a reason behind the observable action. You claim to have a better explanation than just a "signal" derived from watching the chart, using notions like "resistance", "trend", "consolidation".

(5) the model of classical mechanics indeed shows the virtues of a rational model. It is based on well defined axioms. And you can undoubtedly name the conditions when it is applicable and when not (preservation of momentum). The entities and forces detailed by this model can be shown to exist at the time the observed action actually takes place. Plus, this physical process has indeed a common causal nexus. It is one process, a transport of energy and momentum

(6) but what you provide here as an "physical model" of price action is borderline ridiculous. (not to mention that you don't define your terms and that you don't specify the conditions when this model can not be applied). At the time, when the real market action takes place, there is no generic common reason behind the upwards movement and the downwards movement. Other than the fundamental situation in any market that some people want to buy and some want to sell. That some people want the price to go up and others want it to go down. You can not claim in general that the momentum of the upwards movement causes the momentum of the downward movement. (And if you insisted on this claim, I would demand a first class proof)

There might indeed be a set of typical mass psychological situations, like people being nervous after a crash and anxiously watching the further movement to get an indication. But the way you are presenting your analysis here is not helpful to pinpoint such a situation.

• (a) the pattern you present is formulated way too much generic and especially omits the specifics of the market and the current situation
• (b) the pattern can only be construed reliably in hindsight, when the further action is already revealed ("confirmed" as you like to put it)
• (c) the pattern is not necessary to determine a specific mass psychological situation, e.g. a crash. The fact that the price did not turn round but continue into a second leg down can be determined directly from the data available when the "confirmation" of the pattern has happened.

Ichthyo I swear you would've been the one arguing passionately that the world was flat in the 1500's.

Read here (http://en.wikipedia.org/wiki/Technical_analysis#Empirical_evidence) for a primer on the arguments you're presenting and why you're wrong.

You clearly know nothing about TA at all, so for the love of god go learn something before you resume bashing it.

thank you for your opinion -- know that many disagree with you. i'm not going to babble about asking for "proof" of this claim, but know that whenever you make statements like this, you're treading on a double-standard.


i didn't respond to you in this thread because your tone indicated to me that no amount of evidence would satisfy you. and i was correct!


your game of 'proof' is misguided. i cannot prove that my methods work, i can only supply evidence*. you know this.


i claim only that they exist. and this is given by TraderTimm's comment about the Hurst exponent. the next component of the "TA-Hypothesis" is as follows:

if (a) time-dependent auto-correlations exist in price data, then (b) there exist some methods which can measure these.

im not sure how you might think that this does not follow, but i'm prepared. let me flesh this out with a simple proof:

(a) is given by the Hurst exponent

following from this, the fact that any system of statistical analysis has identified that there are such correlations, they are therefore measurable, (b).


yes, again, because there is proof that they exist. why shouldn't they be measurable?


this thread was not predictive. this is not misdirection, manipulation, or any of the above. if you'd like to discuss my predictive methods seriously, please meet me in my current thread, where i post work held to a much higher calibre of rigor

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now, let me include the evidence* which i compiled for you in this thread, which you seem to have strategically ignored, in addition to some cross-posts.

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independent determination of trendlines


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highly successful, straightforward, repeatable, demonstrable, swingtrading technique


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prediction of a double bottom


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prediction of movement down from $160s


follow-up for above prediction


prediction of movement down from the $140s


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also, you were incredibly dismissive about ruski's earlier comments, which referred to his own techniques. i understand that you should be suspicious because any of these methods are prone to apophenia, among other issues, but refusing to believe it's worth jack shit until you read a full statistical analysis of bitcoin price data and prediction methods is not intellectually honest. the calibre of proof for which you are asking demands hundreds of hours of work, and if you think i'll be willing to do that just so you can shout me down and determine just why it isn't 'scientific' then you'd be dead wrong. the same goes for your breakdown of the OP of this thread. i referred to my private models multiple times, and you see my 'withholding' of the statistical justification as manipulation, when the point of me posting on these forums is not to publish a rigorous proof of why my methods are effective (which would be long, boring, and also cause me an information loss against my 'opponents' -- other traders), but rather to exhibit these methods. this does not mean i have not done the due diligance on my own, as i would not dare publish anything that i haven't determined is sound in my own work.

if this post still doesn't satisfy you, please do not break-down each and every example and point at the holes, etc. i'm am getting tired of this game. i'd like to save us both time -- if you still feel adamant, please, please, please supply me with specifically what would constitute evidence for my methods, as i have attempted three times already in this thread, and now many more, to satisfy that most important claim. i have nothing, at all, to hide, and i would appreciate a little bit of cool-down regarding the claims of dishonesty.

--arepo

that being said, i really do appreciate stuff like this -- like i mentioned earlier your criticisms have, at least sometimes, been constructive and i have kept you in mind to help maintain rigor in my work. my methods are becoming more empirical thanks to you  ;)

--arepo

Rusky, what makes you think so?

Actually I know a lot more than just the wikipedia article.

This link leaves me a bit puzzled. The very paragraph you cite mentions my and several further objections. And it shows a surprisingly thin evidence for methods promoted so boldly by many. Other sources I've seen didn't give me much confidence either.

Actually I hoped some of the TA proponents could point at some reliable standard source to dissipate those doubts.

Arepo, to give you a quick answer to the matters tone and reputation --
I'd happily step down the emotional level of this controversy; also I acknowledge that it can be very difficult to carry out a serious controversy in this forum; I for my part are far from shouting statements "technical analysis is total bullshit", and "thats the greatest nonsense I've ever heard" -- but other people do, making it difficult to stick to a civilised level.

Also I want to stress the point, that I have no objections against presenting some TA related stuff as personal heuristics.

But there is a serious discrepancy between the generality of the claims, the serious technological appeal of the presentation of methods, the attitude of presenting an agreed on and well proven set of tools, and the weakness of the actual definitions, reasoning and conclusions and the lack of critical counter checking in pretty much every presentation of TA methods I've seen. A method using the mathematical and scientific toolset should be prepared to be measured against the respective standards.


The question is not if you, Arepo should do that work.
Rather the interesting question is, if that can be done at all, and how -- and if there was any serious attempt towards such an underpinning.

In the end, the reason why we push any tasks of engineering and science is not primarily to be "right" or "wrong", but to advance the general understanding, to build on each others work and to shed some light in one's own premises.

---

To complement my personal opinion, I think there might be some important insight hidden, and the idea to perform an systematic analysis of the primary market phenomena (as oposed to just explain everything by "fundamentals") has merit. But the specific way this has been done in TA might not be totally appropriate, maybe needs to be challenged and readjusted to get us there.

PS: thanks for the detailed answer, I'll respond to some points more in detail later

i can agree here, and am always willing to entertain serious challenges, although i do sometimes take breaks from the forums :P

thank you for the very humble response.

--arepo