Post
Topic
Board Speculation
Re: in defense of technical analysis
by
stillfire
on 08/03/2013, 15:58:14 UTC
And (2) we need to execute that method under controlled and verifiable conditions and yield a significant score of prediction.

To show that TA works I don't think "controlled and verified" conditions would be a feasible experiment. You'd have to round up every Bitcoin trader in the world and somehow control them, because they are the "conditions".

When executing an experiment itself affects the outcome of future attempts of the same experiment, that experiment is not very valuable. For instance, let us assume there was something to TA and we could identify the patterns we wanted to test.

If we ran many "controlled" experiments with real money, other traders would react by changing their strategy to take our particularly rigorous and predictable behaviour into account. If we ran the tests with play money we'd lose the vital component of how the trader's own actions affect the market.

So rather than shooting for a "controlled and verified" test, perhaps just taking a statistical sampling of the average success rate of TA traders versus the norm could be a reasonable test. Setting such a study up would require finding a large group of traders willing to be studied though.