Comment by asdff

Might not work for long holds but for short daytrading I feel like getting enough data for a model, not llm but any model, is the real golden goose moat of most ibs. Pajama traders at home have to set up heuristics for what they believe is a bull flag and maybe develop even a refined gut sense of spotting say a bull flag.

But imagine a quant at Jane street. They see the same candlestick pattern as the pajama guy but their model is giving them actual odds ratios instead of gut instinct. They can now score their putative bull flags in real time and make investments that might be more likely to pay off than not.

A big reason why this works is that technical analysis is a self fulfilling prophecy. Many people are looking for and trading on the exact same signals and this is enough to see a pattern in the candlestick data actually be one associated with market movement. Whether the market movement is 'genuine' or manufactured by other quantitative technical traders in this self fulfilling prophecy doesn't matter, you've made your money and really don't care about the underlying asset at the end of the day, only its delta.