How well does Technical Analysis perform?

[oda.krell]

Or rather: How well do /you/ perform at TA?

Alright, this is the Bitcoin speculation subforum, I'll do my best not to be off-topic. I mean, we discuss (future) Bitcoin price, often by means of TA, so it kind of makes sense to occasionally discuss how TA performs (or how we, individually, perform at it). Hence a meta discussion about TA is (sort of) on topic in this forum? ^*

Anyway, here's a great site. Found it somewhere in this forum, forgot who posted it originally (thanks, whoever you were). Only S&P500 stocks (no crypto yet :D), but I love the simplicity of this game. Play it, then post your summed up results (against buy & hold) here.

Two remarks:

It's stocks from the S&P500. The exact stock name or period isn't shown, but keep in mind that the index as a whole has been going up since the beginning of time, so trade accordingly.

There's two small things about this game that "punishes" trading when compared to B&H. Not so bad that you cannot beat B&H, but it eats a bit into your profits. See if you can find what I mean, or add your own thoughts.

Here's the link.


Chartgame.com


(EDIT) Maybe I didn't phrase it very well, so to be clear: the above website is a chart *game*, not real trading for money. You press 'play game' (no registration, so you're anonymous), then you get a budget of virtual $10k, you are served a fragment of a "nameless" chart, which you then "trade" for ~1 year, skipping forward by days or weeks by pressing a button. At the end of the year, the name of the stock you traded is revealed and you're ranked against a b&h of that chart. Then, you can go to the next chart if you want. Total playing time per chart is about 5 minutes or less, unless you plan to go all EW on each of them :P

Disclaimer: I'm not affiliated with the site or the owner, I just happen to like it a lot.


^{* Yes Blitz?}

[spndr7]

Or rather: How well do /you/ perform at TA?

TA has performed well, and has always given very accurate results, and is well documented in this section.

[oda.krell]

TA has performed well, and has always given very accurate results, and is well documented in this section.

Glad to hear that (and I agree, in principle).

So, why not test that claim over a bigger market and a longer time horizon and see by what factor you outperform the market?


Here are my own results, after playing ~30 rounds.



I played each of the charts I was given rather quick & dirty, no deep analysis, just basic momentum. Outperforming b&h by about a factor of 2 so far.

[RyNinDaCleM]

TA has performed well, and has always given very accurate results, and is well documented in this section.

Glad to hear that (and I agree, in principle).

So, why not test that claim over a bigger market and a longer time horizon and see by what factor you outperform the market?


Here are my own results, after playing ~30 rounds.



I played each of the charts I was given rather quick & dirty, no deep analysis, just basic momentum. Outperforming b&h by about a factor of 2 so far.

Not bad oda.!

I was just reading something about these "couple small things..." the other day. Something about if you were out of the market for just 10 days at just the right time, it cut your profits of a B&H strategy by 25% or more, or something along those lines. I'll see if I can find a link

Edit: I just re-read your OP and realized that the two small things are on this game and not about the actual market. Whatever... My comment still stands! Trade well!

[oda.krell]

Not bad oda.!

I was just reading something about these "couple small things..." the other day. Something about if you were out of the market for just 10 days at just the right time, it cut your profits of a B&H strategy by 25% or more, or something along those lines. I'll see if I can find a link

Edit: I just re-read your OP and realized that the two small things are on this game and not about the actual market. Whatever... My comment still stands! Trade well!

Hehe, I realize this probably looks a lot like I'm humblebragging, but that's not it, I promise.

I never traded any of the "mainstream" markets (still didn't, with real money), but I recently read an article that found evidence that (a) even basic TA strategies can outperform b&h, but that (b) the more mature the market, the less these strategies work. That's why I half-expected the strategies I learned in our own (very immature ) market wouldn't allow me to beat a SP500 b&h.

re: two small things. Yes, I meant two quirks of the game. But I'd be very interested to read the link about the other point you mentioned.

[spndr7]

TA has performed well, and has always given very accurate results, and is well documented in this section.

Glad to hear that (and I agree, in principle).

So, why not test that claim over a bigger market and a longer time horizon and see by what factor you outperform the market?


Here are my own results, after playing ~30 rounds.



I played each of the charts I was given rather quick & dirty, no deep analysis, just basic momentum. Outperforming b&h by about a factor of 2 so far.

6131 days = 16.78 yrs !! Thats a great amount of trading experience.

I will have to compile all results precisely, to reach comparison. But I agree that its better than buy & hold strategy by at least a
factor of 2x to 5x.

[BTCPOOLMINING]

Technical Analysis perform good when there are not good fundamental news in the market, but as soon as we see some good fundamental news in market reliability of Tech analysis is lowered and even market can move to oppsite direction tech analysis prediction, it happens for most markets

[oda.krell]

6131 days = 16.78 yrs !! Thats a great amount of trading experience.

I will have to compile all results precisely, to reach comparison. But I agree that its better than buy & hold strategy by at least a
factor of 2x to 5x.

Haha, I wish (although that'd also make me ancient ). The 6131 days are just the total playing time on that site, over all charts I've traded on. You can skip through a chart week by week if you want, so the total days rack up quickly.

Go give it a try, if you feel like it, it was really interesting to see how my BTC strategies work (or don't) on S&P500 stocks. Also, no real money involved, just Internet Points (measured in $)

[rebuilder]

Just did a single round, got about 6x buy and hold gains. Practically no analysis apart from looking at BBs for breakouts/downs. Can't say much since it was just one try but one thing was clear: I made most of my gains by holding on to losing positions until they turned green. That was a lot easier to do when you just click to fast forward instead of waiting for weeks in the red with real money on the line.

[BldSwtTrs]

Why when I try to play the game I have the message "You are not the owner of this game. But you can review it" and cannot do anything?

[oda.krell]

Why when I try to play the game I have the message "You are not the owner of this game. But you can review it" and cannot do anything?

No idea what's wrong... You followed the "Play Chartgame" from the mainpage?

I just tried it in an incognito window (so my cookies from the previous sessions don't interfere), and it still seems to work. Maybe try another browser?

[hdbuck]

nice game! thx for sharing, ima try improve my 'feeling' skills with it.. ^^

[oda.krell]

Just did a single round, got about 6x buy and hold gains. Practically no analysis apart from looking at BBs for breakouts/downs. Can't say much since it was just one try but one thing was clear: I made most of my gains by holding on to losing positions until they turned green. That was a lot easier to do when you just click to fast forward instead of waiting for weeks in the red with real money on the line.

Yeah, probably makes sense to play a few rounds, as the factor against b&h can vary wildly until there's a bit more data, at least that was my experience.

100% agreed on the 'fast forward'. It makes it easier in a sense, because the (sometimes nerve-wrecking) time in between market moves can be shortened, but I also thought it was pretty 'educational' in a way, because it really seems to sharpen your senses on the patterns, without the emotions that inevitably interfere with your actual trading.

nice game! thx for sharing, ima try improve my 'feeling' skills with it.. ^^

Glad you like it.

I'm still surprised how brutally a the bigger market context of the S&P (which is overall bullish since decades) seems to punish shorting. I made only comparably little profit by shorting a few obvious breakdowns, but then, over just a few charts, lost quite a bit of my total profits by not closing shorts early enough when the trend had turned.

[Mr Crabs]

How well does Technical Analysis perform?

It doesn't. Like the title of the subforum would suggest it is pure speculation and someone cannot predict the price if the coin either ten minutes from now or ten years and that's why I usually just disregard any discussion on the price. Only time will tell really.