Refering to traditional chartisits (the edward & magee sort) rather than Quants who use certain technical indicators in their algos.How are the HFT shops and other quant shops changing the landscape for the traditional chartist?I understand it may be difficult to get this perspective from a quant forum (and let's try not to delve into the realm of how bunk Tech analysis is...)

Very humorous but unhelpful!!

I'm a bit skeptic about positive alphas.Small article about JarrowAbstract of his Journal of Portfolio Management article.QuoteIt is commonly believed that active portfolio management can generate positive alphas.This is partly based on the belief that positive alphas represent disequilibrium returns, which can exist in complex financial markets.In contradiction, this article shows that positive alphas represent arbitrage opportunities, not just disequilibrium returns.As persistent and frequent arbitrage opportunities are much rarer, even in complex markets, Jarrow argues that positive alphas are more fantasy than fact. He introduces the notion of an unobservable factor that can generate false positive alphas, and which resolves the inconsistency between common belief and the sparsity of positive alphas.

Might try this book:Heretics of Finance: Conversations with Leading Practitioners of Technical Analysis - Andrew Lo and Jasmina HasanhodzicBook Review posted on Seeking Alpha

QuoteOriginally posted by: frenchXI'm a bit skeptic about positive alphas.Small article about JarrowAbstract of his Journal of Portfolio Management article.QuoteIt is commonly believed that active portfolio management can generate positive alphas.This is partly based on the belief that positive alphas represent disequilibrium returns, which can exist in complex financial markets.In contradiction, this article shows that positive alphas represent arbitrage opportunities, not just disequilibrium returns.As persistent and frequent arbitrage opportunities are much rarer, even in complex markets, Jarrow argues that positive alphas are more fantasy than fact. He introduces the notion of an unobservable factor that can generate false positive alphas, and which resolves the inconsistency between common belief and the sparsity of positive alphas.Sorry...i have seen positive alpha in action, year after year after year (spanning more than 2 decades). It can come from models, but most usually it comes from experience. Of course, we can hardly tell if it is luck or not. But seriously, there are many structural market imbalances that one can "arb" over medium to long time horizons. The problem is that most people think they need to make their alpha before lunch time, they look in the wrong places.

QuoteOriginally posted by: frenchXthe sparsity of positive alphas.Jarrow is an idiot. There cannot exist positive returns without people moving the average above 0. Every person making money is a person without whom the average would have been lower - or if that person and that money had just slept in all week the average would be lower - who therefore is beating the market which it is relevant to compare him to.

QuoteOriginally posted by: ThekeysRefering to traditional chartisits (the edward & magee sort) rather than Quants who use certain technical indicators in their algos.How are the HFT shops and other quant shops changing the landscape for the traditional chartist?I understand it may be difficult to get this perspective from a quant forum (and let's try not to delve into the realm of how bunk Tech analysis is...)Let me return to the original question: The basic principles of technical analysis are still valid and they won't change due to high frequency traders (HFT). HFT do not cause bull or bear markets. HFT do not cause economic expansions or recessions. HFT merely suck on the market like flies suck on shit. But they don't make the shit green or blue or smell good or anything. The shit won't change.Some basic relationships will always be valid (the most basic ones for sure): E.g. Price and volume. Support and Resistance. Consolidation and Continuation. Exuberance and Panic. Etc.

Do academics really waste their careers arguing that on average, people can't beat the average?

I've heard from some Tech Analysts that volume has lost much relevance due to much of the Algo Trading -> Thoughts on this Gmike2000?

Well, i guess it is true that volume patterns have changed since the original technical analysis theories were formulated in the 1920s and 30s etc. Volume appears to have gone up a lot overall in all markets during the past 10yrs (equity and fixed income). Whether that is due to algorithmic trading or not I don't know.On the other hand, volume can still tell you something when for example it rises during a selloff or when it declines as prices go up. When the financial crisis was at its peak, end of 2008 to mid 2009, the stocks I was following (for fun: am not a stock guy) showed bullish signs at the very bottom when their volume expanded during rebounds and fell when the prices came down again. It indicated the beginning of a bullish move. Also, I think, volume patterns still reveal themselves after consolidation phases (triangles, wedges) to confirm a break out.In fixed income most of the stuff is OTC so volume is not used unfortunately. Sometimes I wish I had volume on swap rate charts....