can price action predict market moves

[DiceAreCast]

If it was remotely profitable why would large players be infinitely wasteful instead of trading off charts. If charts have predictive power every fucking hedge fund and bank and pension fund would be sucking dick to get access to those miraculous charts. Let's get real for a moment.

It just does not make sense and only leads to one conclusion

I prefer to stay out of any heated arguments and I don't see any purpose in bickering around, but I do like to set the facts straight when I see something I disagree with. As I myself use a quantitative model for my forecasting I simply can't agree when people compare that with charting as it's really not the same.



There's multiple ways to make money in the markets. I think it's perfectly possible to make money trading off charts alone. And there's ample evidence of players doing so. Maybe not on ET, though. I wouldn't know.

Banks and hedge funds operate within a different market segment than retail traders, so it's not really comparative.

 

[Relentless]

There's a lot of bullshit banter in this thread.

I agree with @Laissez Faire - there are multiple methods to the madness. To say you cant make money through chart work just means you can't or have no prior / current knowledge of anyone doing so. People like to declare something isn't happening / possible because they have no evidence of it or can't do it themselves.

Guess what? Nobody knows everything. Does not mean it's impossible or not happening. And I guarantee you there are hedge funds / banks making money with some of these charting methodologies - or maybe they just haven't "sucked enough dick" to acquire it yet.

 

[notagain]

Range chart, draw your channels

 

[DiceAreCast]

So what's your chart prediction? Roll your dice?

Range chart, draw your channels
View attachment 255862

 

[DiceAreCast]

So none of the professionals who have all the access to deep and diverse research could not make it but some kids from the corner can? Please...

There's a lot of bullshit banter in this thread.

I agree with @Laissez Faire - there are multiple methods to the madness. To say you cant make money through chart work just means you can't or have no prior / current knowledge of anyone doing so. People like to declare something isn't happening / possible because they have no evidence of it or can't do it themselves.

Guess what? Nobody knows everything. Does not mean it's impossible or not happening. And I guarantee you there are hedge funds / banks making money with some of these charting methodologies - or maybe they just haven't "sucked enough dick" to acquire it yet.

 

[Relentless]

So none of the professionals who have all the access to deep and diverse research could not make it but some kids from the corner can? Please...

Now you are just putting words in my mouth.

No where did I state "none of the professionals who have all the access to deep and diverse research could not make it but some kids from the corner can".

Why can't it be both? And to assume lesser opportunistic are "some kids on the corner" is bullshit in the first place. Who died and made you God? Someone isn't sucking dick at Goldman or some quant firm and that makes them some scrub shit auto-fail retail trader?

Get the fuck out of here with this speculative conjecture. Generally I've respected your posts for being in the smaller percentage of logical well thought out contributions - but I find you leaning towards the "I know what's going on and the rest of you are idiots" thought process in this thread which is not the case in brutally obvious fashion.

You know what I think? I think some of you think you know everything and are default successful having "spent some time" or because you "have a background" in the industry.

I call bullshit. Most lose - including "pros". Show me the data that says otherwise? Good luck.

 

[DiceAreCast]

I did not put words in your mouth. I asked an honest question: How is it possible that all those thousands of professional banks, pension funds, buy-side firms, hedge funds, family offices, government entities, do not read charts to make money? If there was any statistical validity in obtaining alpha through interpreting chart patterns then why is that not exploited by any of the firms who would murder their own grandma for an additional cent in the pocket?

It can't be both. You have the world's most sophisticated financial entities who send well-paid consultants into the cocoa plantations in Ghana to assess growth patterns and conditions in order to gain that tiny edge in trading related futures or other asset classes. Companies pay an incredible amount of money to set up communication towers to get that tiny additional millisecond and often even microseconds edge if all they need to do is read chart patterns? Or let me make it very simple for you: In addition to all the approaches they employ, why do they not at least also look at charts when trading? They do not, I have worked at various banks and hedge funds in the past 18 years and I know for sure that this is not the case. Nowhere I worked, whether on the market-making side, exotic derivatives pricing side, prop trading side, whether in fixed income or equities, whether in stocks, options, or futures. And I spoke not just to hundreds of traders in my career but more than a thousand for sure. Can you explain that? Even the tiniest statistical edge would be worth exploiting if charts could be harnessed to obtain alpha. Why not?

Don't get angry, pal, I am reasoning with you, pure logical conjecture and thought process. Try to follow it, give my argument a chance at least if you consider yourself a reasonable person. Nobody declared anyone an idiot. At best the majority just does not know better and has no better access to more profitable approaches to trading. Hence a vast majority breaks even at the absolute best. And that is as positive a spin I can attach to a 95%+ retail loser statistic that has been proven and published by countless brokers in the past.

Now you are just putting words in my mouth.

No where did I state "none of the professionals who have all the access to deep and diverse research could not make it but some kids from the corner can".

Why can't it be both? And to assume lesser opportunistic are "some kids on the corner" is bullshit in the first place. Who died and made you God? Someone isn't sucking dick at Goldman or some quant firm and that makes them some scrub shit auto-fail retail trader?

Get the fuck out of here with this speculative conjecture. Generally I've respected your posts for being in the smaller percentage of logical well thought out contributions - but I find you leaning towards the "I know what's going on and the rest of you are idiots" thought process in this thread which is not the case in brutally obvious fashion.

You know what I think? I think some of you think you know everything and are default successful having "spent some time" or because you "have a background" in the industry.

I call bullshit. Most lose - including "pros". Show me the data that says otherwise? Good luck.

 

[Master Pu]

hi all,

........

my point is, i think previous price action might be useful, BUT it might also not be useful at all. making trading decisions based on what happened is a 50/50 coin flip IMO.

Quite likely, but that 50/50 has value nevertheless, I would rather initiate trades near significant levels, than trade within 'the noise'.

 

[themickey]

I did not put words in your mouth. I asked an honest question: How is it possible that all those thousands of professional banks, pension funds, buy-side firms, hedge funds, family offices, government entities, do not read charts to make money? If there was any statistical validity in obtaining alpha through interpreting chart patterns then why is that not exploited by any of the firms who would murder their own grandma for an additional cent in the pocket?

It can't be both. You have the world's most sophisticated financial entities who send well-paid consultants into the cocoa plantations in Ghana to assess growth patterns and conditions in order to gain that tiny edge in trading related futures or other asset classes. Companies pay an incredible amount of money to set up communication towers to get that tiny additional millisecond and often even microseconds edge if all they need to do is read chart patterns? Or let me make it very simple for you: In addition to all the approaches they employ, why do they not at least also look at charts when trading? They do not, I have worked at various banks and hedge funds in the past 18 years and I know for sure that this is not the case. Nowhere I worked, whether on the market-making side, exotic derivatives pricing side, prop trading side, whether in fixed income or equities, whether in stocks, options, or futures. And I spoke not just to hundreds of traders in my career but more than a thousand for sure. Can you explain that? Even the tiniest statistical edge would be worth exploiting if charts could be harnessed to obtain alpha. Why not?

Don't get angry, pal, I am reasoning with you, pure logical conjecture and thought process. Try to follow it, give my argument a chance at least if you consider yourself a reasonable person. Nobody declared anyone an idiot. At best the majority just does not know better and has no better access to more profitable approaches to trading. Hence a vast majority breaks even at the absolute best. And that is as positive a spin I can attach to a 95%+ retail loser statistic that has been proven and published by countless brokers in the past.

If you look at pics of professionals trading at their desk, most often you'll see several monitors, most full of data/tables, but often at least one with a chart.
Data supplies the info and number crunching formulas across many levels, but the chart supplies a perspective which data struggles to display.
For example data will get you most of the way but the chart - just a quick glance - can zero in on one instrument to confirm something if you had doubts.
If I wanted to describe a trade, a chart is often better than just raw data.

 

[longandshort]

I think what's important to know about trading is that there is 1) idea generation and then there is 2) trade execution. Both can be sources of alpha. Good traders have robust idea generation that is tied to some market anomaly or source of alpha (note: chart patterns are not a source of alpha), AND execute the trade efficiently.

Charts are not very useful for trade ideas because it's not enough information. You are handicapped if you are trading with charts and news. If you make money, you are lucky as the underlying chart pattern you're using is random. Charts can be helpful to support or build trade ideas, because you can look at big moves/volatility and tie it into a catalyst or event that occurred. This helps you learn and can teach you how to play/anticipate future big moves/volatility. But in order to develop an idea, you need to have a view on the underlying security, which means you need to review fundamentals, know market expectations, and have a theory as to what the driver of your excess return on the trade will be.

As someone who's spent their professional career trading (on wall st and hedge funds), I've had to train new analysts to "unlearn" whatever gambling/"trading" they did in college because it made them ill equipped for the actual job of generating profits.