yes, i kind of stitched together bullet points of a sort of thesis i'm trying to develop. i apologize for the disorganization.
let me try to build a bridge between the ideas you just mentioned:
cool thanks, some quick thoughts before i go to bed
the emphasis on information is because trading is a limited information game. this is separate from the price function, which is stochastic, essentially random, which is exactly why no methods of technical analysis can produce 100% confidence.
yes information is limited. if you assume the market is efficient, then you dont care if its limited because all information is reflected in price anyway. bitcoin is not that market
take the 'weekend dip'. once a thread about it was posted and trafficked to saturation, the effect stopped happening. why? because traders selling early friday and buying back in sunday, profited off of this information asymmetry, anticipating that others were going to sell and undercutting them.
you are making assumptions that are not necessarily true.
1. that the 'weekend dip' was in fact a real pattern that would have been repeated whether or not new traders learned about it. this is definitely questionable. sure you can point to the fact that banks are closed on weekends and therefore no new money on gox. but that is more fundamental than technical
2. that the reason that the 'weekend dip' stopped was because of new traders learning about it. if this was true, then the dip should just continue moving up earlier in the week. everyone sells friday in anticipation of the weekend dip, now becomes a friday dip. then ppl try to frontrun again, it becomes a thursday dip. etc
these regularities have been shown to exist, and i do believe they violate the strong form of the EMH, which would imply that a good is at its 'true price' at all times in the marketplace. in practice this falls quite short of ideal.
well the EMH is just a hypothesis. you need to decide just how efficient each market is. the S&P500 is about as efficient as they come. its unlikely that you can convince me that TA will work on that market. Bitcoins? way inefficient. thats because its still in growth stage. inside information isnt as important as new projects and wider exposure. that is pretty much what will determine the price. western union makes announcement? price spikes. silk road goes down? price falls.
remember how the price doubled suddenly after a long period of consolidation a few months before the block reward halving? the suddenness of the onset of the price discovery phase suggests that the way that price-relevant information is factored into the price is far from ideal, and if you have meta-information -- information of another players' future actions -- you can undercut them profitably.
this is definitely all true. bitcoin is endlessly in price discovery mode and will continue for a long time. it will be a rollercoaster. if you have info that western union will start at X date, you will be undercutting every seller who sells prior.
overall i agree with your post. but my contention has been whether or not you will actually find usable, valid information from which you can profit from, merely by looking at charts of past prices and drawing lines and BIGMACd indicators and looking for shape of erections developing. i exaggerate for humor, but nonetheless the point remains. and in this post of yours, you dont really talk about charting techniques which is probably why i am not in disagreement
and i'm not just some random who is trying to troll all the chartists. i have read many books on TA and devoted a lot of time in the futures markets. i really wanted TA to work. however, nothing ever passed the common sense test. (talking about discretionary trading only here, obviously if you backtest huge data and have statistical evidence, then sure, but in that case, you aren't trading technically, you are trading statistically). Market Profile stuff made sense, but it seemed to apply more to efficient markets like the big indexes
