A message to some day traders.

[Amahrix]

Blaming TA is like a builder blaming his tape measure. TA is simply information.

It’s the interpretation you conclude to after using the tool to measure, that makes this deadly to traders $$. It is misused, and (bad) traders use this tool to infer from the past to predict the future and structure their portfolio around such a horrendous investment strategy.

 

[Amahrix]

Blaming TA is like a builder blaming his tape measure. TA is simply information.

Also...since you mentioned measurement.... Wittgeinsteins Ruler.

Wittgenstein's ruler situations:

1) When you use a ruler to measure the table, you are also using the table to measure the ruler.

2) The more unexpected the measurement, the more you apply W's ruler.

As NNT said:

Wittgenstein's ruler: nerds use the ruler to measure the table; Fat Tonies (and real scientists) use the table to measure the ruler.

Unless you have confidence in the ruler's reliability, if you use a ruler to measure a table you may also be using the table to measure the ruler. ” Ludwig Wittgenstein

TA tools give false confidence when one uses them in inferring from past events to predict future events.

 

[padutrader]

I never said “it is impossible to make money in short term trading”.

then what is this:you are misunderstanding your own arguments

HOW CAN YOU SERIOUSLY TAKE A TRADING STRATEGY THAT DERIVES ITS INFORMATION FROM THE PAST TO PREDICT THE FUTURE, ESPECIALLY IF THAT DATA IS LESS THAN 1 YEAR AGO AND Y'ALL DO TRADES BASED AROUND 5 MINUTE MOVEMENT.... YOU'RE FOOLING YOURSELF!!!

 

[Amahrix]

then what is this:you are misunderstanding your own arguments

I’ve answered this already.

 

[Amahrix]

then what is this:you are misunderstanding your own arguments

Here, I’ll answer it again.

That’s me highlighting that a day trading strategy that is based only on TA (assuming the individual is using TA to infer from
the past and predict the future: problem of induction) will fail over the long run.

It does not mean “its impossible to make money in the short term”

 

[Amahrix]

Separately, people forget that predicting an event, itself, is irrelevant. —> The Fallacy of Forecasting

https://www.elitetrader.com/et/threads/the-fallacy-of-forecasting.336260/

 

[padutrader]

I never said “it is impossible to make money in short term trading”.

then what is this:you are misunderstanding your own arguments

HOW CAN YOU SERIOUSLY TAKE A TRADING STRATEGY THAT DERIVES ITS INFORMATION FROM THE PAST TO PREDICT THE FUTURE, ESPECIALLY IF THAT DATA IS LESS THAN 1 YEAR AGO AND Y'ALL DO TRADES BASED AROUND 5 MINUTE MOVEMENT.... YOU'RE FOOLING YOURSELF!!!

 

[Amahrix]

As I sit here in regret regarding engaging with that certain individual in this drawn out back & forth. I’ve come to learn that it is unethical to engage any further.

I, sincerely, wish you all the best and much success.

 

[Amahrix]

Since Amahrix seems to hold some respect for Ray Dalio:

Ray Dalio had horrible trading results in his earlier years. His performance improved greatly when began looking for repetitive patterns in the market. This is T.A. 101, the study of crowd behavior, the causes & effects which repeat over & over through history.

“What I believe is everything happens over and over again through history. ” Ray Dalio

“I think the biggest mistake you can make is to ignore the repetitive nature of the cyclical pattern. Life becomes very easy when you have studied the past to the extent that you have seen the recurring patterns and you can recognize them when they come up again. So I think that’s extremely important." Ray Dalio

Over the last year, I have been studying economic and market moves in major countries going back to about the year 1500, which has given me a superficial understanding of them. With that perspective, I can say with confidence that throughout the times I have studied the same big things happen over and over again for essentially the same reasons. I’m not saying they’re exactly the same or that important changes haven’t occurred, because they certainly have (e.g., how central banks have come and gone and changed). What I am saying is that big paradigm shifts have always happened and they happened for roughly the same reasons.” Ray Dalio

He also is saying very different things than what I am saying. I agree with Dalio.

Big paradigm shifts... booms and busts....economic cycles.... etc etc.

I can say I see a recurring pattern that people get fooled thinking they see patterns then get hit with ruin, and this repeats.

You’re going to mislead a lot of traders that will read this and conclude the wrong things. Like using this to believe that technical analysis used as an inference tool with respect to the future works...

Markers have a fractal patterns etc. For example, a one minute chart, looks the same as a 5 minute, looks the same as a 10 minute, looks the same as a 15 minute etc etc. Check Benoit Mandelbrots work on this...

It’s completely different than what I am saying.

Crowd behavior is unpredictable. Tomorrow, maybe at 1:00, liquidity may disappear, this is unpredictable. But there is a pattern that we can look at that and conclude that every once and a while... liquidity disappears. You see?

 

[Amahrix]

As an individual trader looking in you make an assessment on market sentiment, looking for signs of confirmation.

And this, GuerrillaTrading, is where many fall victim to Confirmation bias.

Source: https://scienceofdoom.com/2010/02/12/the-confirmation-bias-or-why-none-of-us-are-really-skeptics/

“Taleb gives a great example of what we all really do in practice, from research by pyschologists. Pay attention to Nicholas..

Subjects were presented with the three number sequence 2, 4, 6 and asked to guess the rule generating it. Their method of guessing was to produce other three-number sequences to which the experimenter would say “yes” or “no” depending on whether the new sequences were consistent with the rule.

What did the subjects do? They tried to guess the rule.. of course! That’s what they should have done.

And then they tested it by.. producing a sequence consistent with their theory. So almost no one worked out that the real rule was simply, “numbers in ascending order”

Perhaps they decided that the rule was a starting number x1, x2, x3. Or perhaps they decided that the rule was to take starting number then add 2, and add 2 again.

And they generated a sample sequence from their theory and told the experimenter.

But what almost no one did was to suggest a sequence inconsistent with their own mental theory – a test which would allow them to more easily falsify their theory.”