QuoteOriginally posted by: KackToodlesQuoteOriginally posted by: TraderJoeDo you even know what a pde is?I know the most important thing there is to know about it: you cannot predict the long term price of Yahoo shares using PDEs.Short term?

QuoteOriginally posted by: TraderJoeShort term?there's more profit in the long term. ask Warren Buffett. Short term trading is for geeks and streetwalkers. Long term is for gentlemen.

Excellent blog post and discussion. There are too many smart ideas from too many smart posters to acknowledge them all. Yes, QA is related to TA. The core overlap is that both QA and TA take, as inputs, the price time series. Both QA and TA produce, as outputs, statements about prices and future risk-return properties of trades or positions. They also both use statistical and mathematical concepts to construct the mapping from past to future. I agree that QA is "more scientific" than TA both in using statistically rigorous models of price returns and in considering portfolio effects. But, I'd argue that QA has its downside WRT TA. If TA has the problem of being "fooled by randomness" then QA has the problem of being "fooled by elegance." I'd argue that QA too often uses unsupported assumptions (e.g. IID, stable distributions, convergent values of the moments, stationarity, continuity, complete markets, no-arbitrage, constant risk-free ROI, infinite horizons, rational-agents, risk-aversion, etc.) in order to create elegant analytic equations. If TA too often uses "toy math" on the real world markets, QA too often uses real math on a "toy world" version of the markets.I'd also say that TA, in its own way, is a lot closer to Behavioral Finance than is QA. Whereas much in QA assumes perfectly rational agents in an emotionless non-arbitrage world, TA is much more cognizant of the emotional states of market participants and likely future effects of emotion on price actions. TA is a world of driven by emotions of greed and fear, bulls and bears with prices that can be oversold, overbought, hitting resistance or support, or passing through various patterns and cycles. Yes, TA does have it's superstitious astrological side, yet TA is much more aware market reflexivity that the emotions of investors/speculators influence the price patterns and the price patterns affect the emotions of investors/speculators.

QuoteOriginally posted by: KackToodlesQuoteOriginally posted by: TraderJoeShort term?there's more profit in the long term. ask Warren Buffett. Short term trading is for geeks and streetwalkers. Long term is for gentlemen. So ,you mean that James Simons is a "geek" ?

QuoteOriginally posted by: Traden4AlphaExcellent blog post and discussion. There are too many smart ideas from too many smart posters to acknowledge them all.Who cares about your acknowledgment? Just make your point. You are not a judge here. P.S. I see you like to generalize, don't you?

QuoteOriginally posted by: Traden4Alpha[/iBut, I'd argue that QA has its downside WRT TA. If TA has the problem of being "fooled by randomness" then QA has the problem of being "fooled by elegance." Excellent point. Standard techniques employed by QF aren't really suitable for real life trading, even though they appear more scientific.

QuoteOriginally posted by: torontosimpleguyP.S. I see you like to generalize, don't you?We all generalize 100% of the time. I've never trusted individual data points. You are right about generalization, of course. TA and QF are each very broad fields of endeavor with a wide range of models, methods, and practitioners. Even if the central tendencies for TA and QF adhere to the stereotypes, the dispersions are too high to say that all TA is different from all QF on any given dimension of mathematical rigor, correctness, profitability, etc.

QuoteOriginally posted by: lewishortthemallSo ,you mean that James Simons is a "geek" ? no, he's more of a streetwalk as in SOLD OUT to higher bidder.

QuoteOriginally posted by: Traden4AlphaTA and QF are each very broad fields of endeavor with a wide range of models, methods, and practitioners. TAs invented momentum trading and value investing and style rotation, which are all now part of mainstream practices. QF believed incorrectly in "random walk" and "market efficiency" bullcrap because QF was "more scientific", buah ha haha.

What is TA? Osciallators, Indicators, Trendlines, Candlesticks, Fibonacci ratios, ...?The most important authors in TA are in my view: Schwager, Murphy, Edwards/Magee, Pring and Kaufmann.In this discussion we should turn to more recent literature (e.g. DeMark 1994, Aronson 2006, Ehlers 2004) and agree on a body of literature of TA which deserves to be called scientific. Also if TA wants to be behavioural orientated it should make statements about behaviour or draw on a body of knowledge from psychology (in a scientific way). Most traders have no understanding of the fact that psychology is a science. QF is even worse in that it states that all humans are full rational utility maximizers. It will take decades for behavioural finance and quantitative finance to merge in one coherent body of theory.

QuoteOriginally posted by: yabbadabbaWhat is TA? Osciallators, Indicators, Trendlines, Candlesticks, Fibonacci ratios, ...? Trendlnes = ARMA time seriesIndicators = predictive variablesOscillators = VAR analysisTomuto = TomAto = TA = QF

QuoteOriginally posted by: yabbadabbaWhat is TA? Osciallators, Indicators, Trendlines, Candlesticks, Fibonacci ratios, ...?The most important authors in TA are in my view: Schwager, Murphy, Edwards/Magee, Pring and Kaufmann.http://www.investopedia.com/terms/t/tec ... alysis.asp http://en.wikipedia.org/wiki/Technical_analysis

QuoteOriginally posted by: lewishortthemallQuoteOriginally posted by: yabbadabbaWhat is TA? Osciallators, Indicators, Trendlines, Candlesticks, Fibonacci ratios, ...?The most important authors in TA are in my view: Schwager, Murphy, Edwards/Magee, Pring and Kaufmann.http://www.investopedia.com/terms/t/tec ... alysis.asp http://en.wikipedia.org/wiki/Technical_analysisOh, really? I have google. Ask a technical analyst what he does and post his answer.

This has evolved into a very interesting thread indeed.I started this thread by pointing out the similarities in both techniques.Then we get comments about the major differences.And then we go on talking about which one is better!Keep the comments coming!

>QF believed incorrectly in "random walk" and "market efficiency" bullcrap because QF was "more scientific", buah ha haha. what's wrong with that? Markovian/complete models are simply easier to treat - it makes always sense to start with a simple model and then add more complexity. Of course it is not very 'scientific' to declare a first working hypothesis as axiom never to be changed.isn't the difference between QA and TA simply that TA aims at predicting future prices, while QA provides tools for deriving current 'theoretical' prices based on the assumption that you can derive them from other current market data? i admit that maybe my notion of QA might be a bit too restricted -