Comments on: Delusional Technical Analysis http://tradermike.net/2008/05/delusional_technical_analysis/ Stock market commentary & trading ideas. Stock market weblog (blog), swing trading, day trading, stock picks, technical analysis, stock charts, stocks. Sun, 12 Oct 2008 05:37:48 +0000 http://wordpress.org/?v=2.6.2 By: David http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9389 David Tue, 20 May 2008 18:23:49 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9389 Hi Mike, Glad you mentioned Trader Vic's book. One of my favorites, and I also look to it as a simple and correct guide for reading charts and drawing trendlines, finding change of trend in chart patterns. I see a lot of people drawing trendlines that go through prices, or seem to follow some other flight of fancy. I think anyone who is serious about using, discussing charts should read Vic's book! And there is much more wisdom to be found there, besides. Hi Mike,

Glad you mentioned Trader Vic’s book. One of my favorites, and I also look to it as a simple and correct guide for reading charts and drawing trendlines, finding change of trend in chart patterns.

I see a lot of people drawing trendlines that go through prices, or seem to follow some other flight of fancy. I think anyone who is serious about using, discussing charts should read Vic’s book! And there is much more wisdom to be found there, besides.

]]> By: gurlate http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9388 gurlate Tue, 20 May 2008 01:04:10 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9388 trendlines are all in the minds of those who see it..some technicians would agree w/ the article (of course there are resistances ahead)//remembet TA is an artform...(and sometimes B.S.) trendlines are all in the minds of those who see it..some technicians would agree w/ the article (of course there are resistances ahead)//remembet TA is an artform…(and sometimes B.S.)

]]> By: Michael http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9386 Michael Mon, 19 May 2008 12:22:26 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9386 That's very true about good scientists Jack. I think many good traders are also willing to examine the opposite side and to trade either long & short depending on what the market's telling them. That’s very true about good scientists Jack. I think many good traders are also willing to examine the opposite side and to trade either long & short depending on what the market’s telling them.

]]> By: Jack Stevison http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9384 Jack Stevison Mon, 19 May 2008 12:06:31 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9384 Good scientists set out to prove their theories are wrong (the null set), only when they fail to do that can they be proven right. Great post! Good scientists set out to prove their theories are wrong (the null set), only when they fail to do that can they be proven right.

Great post!

]]> By: Michael http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9383 Michael Mon, 19 May 2008 11:35:11 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9383 Steve, You forgot the part about "not going through other prices." I used the same time frame as the gold bull. In that case the lowest low is in September and the connecting low -- without going through other prices -- would have to be the late December lows. If I was considering a slightly shorter time frame I'd draw a line from the late December low through the February intraday low. Note that in either case we don't get the trendline that thye gold bull have created. Steve,

You forgot the part about “not going through other prices.” I used the same time frame as the gold bull. In that case the lowest low is in September and the connecting low — without going through other prices — would have to be the late December lows.

If I was considering a slightly shorter time frame I’d draw a line from the late December low through the February intraday low.

Note that in either case we don’t get the trendline that thye gold bull have created.

]]> By: Michael http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9382 Michael Mon, 19 May 2008 11:30:57 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9382 Carey, You must be talking about the trend table that I use for the daily recaps. I just use moving averages there for simplicity -- it's easier than having to find & draw 3 trendlines every day. Also, it saves me the trouble of having to argue with folks about what's long, intermediate & short-term. In this case, I'm simply talking about how to draw a trendline. I'd probably call the trendline that I drew on the gold chart the intermediate-term trendline. Carey,

You must be talking about the trend table that I use for the daily recaps. I just use moving averages there for simplicity — it’s easier than having to find & draw 3 trendlines every day. Also, it saves me the trouble of having to argue with folks about what’s long, intermediate & short-term.

In this case, I’m simply talking about how to draw a trendline. I’d probably call the trendline that I drew on the gold chart the intermediate-term trendline.

]]> By: Steve http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9381 Steve Mon, 19 May 2008 08:07:17 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9381 "draw a line from the lowest low, up and to the highest minor low point PRECEDING the highest high" Perhaps I am missing something, but wouldn't you draw the line to "highest minor low point preceding the highest high" which would have been in March just before the 08 high? It seems you drew the line to a point after the highest high and not preceding it. Great article! “draw a line from the lowest low, up and to the highest minor low point PRECEDING the highest high”

Perhaps I am missing something, but wouldn’t you draw the line to “highest minor low point preceding the highest high” which would have been in March just before the 08 high? It seems you drew the line to a point after the highest high and not preceding it. Great article!

]]> By: Carey http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9380 Carey Mon, 19 May 2008 04:47:32 +0000 http://tradermike.net/2008/05/delusional_technical_analysis/#comment-9380 The way I have read Trader Vic's method is slightly different from how I believe you have adopted your "trends," although what you drew is certainly consistent with his methodology. If one views long-term as months to years, intermediate as weeks to months, and short-term as days to weeks, I would view gold as being in a solid long-term up trend (based on a weekly or monthly chart), an intermediate down trend (based on the chart above) and a short-term up trend (again, based on the chart above). You chose moving averages to define these moves but I still find it useful to view such trends in three time frames. Your view of this would be interesting - especially a comment on why you chose moving averages to define these time frames vs. looking at the trend lines. The way I have read Trader Vic’s method is slightly different from how I believe you have adopted your “trends,” although what you drew is certainly consistent with his methodology. If one views long-term as months to years, intermediate as weeks to months, and short-term as days to weeks, I would view gold as being in a solid long-term up trend (based on a weekly or monthly chart), an intermediate down trend (based on the chart above) and a short-term up trend (again, based on the chart above). You chose moving averages to define these moves but I still find it useful to view such trends in three time frames. Your view of this would be interesting - especially a comment on why you chose moving averages to define these time frames vs. looking at the trend lines.

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