Do TA is a bullshit ?

If your starting to try to understand how markets move, focus on longer term charts. Daily bars 4hr bars etc. 5 min, 1 min... too short term in my opinion...too noisy.

It doesn't mean that you can't trade shorter term in the future, but shorter term is harder in my opinion.

I trade futures, so holding overnight is fine because most trade 23 hours per day and I'm not a 1000 lot trader that would move the market at obscure hours.

As far as volume, I don't necessarily study volume. I more or less can tell where larger volume will come in to the market, those levels are where the market gravitates to. Again, this coincides with the 3 bullet points. Those 3 bullet points keep markets in existence.

Don't make your charts too complex either.

Remember, for most, trading takes alot of time to learn. Once you learn how markets generally move, then you have to learn how to execute. It's a long road for most.

Lastly if your trading stocks, look mostly for spots to buy, shorting is more difficult. It is more difficult to find tops compared to finding bottoms. Simple concepts like buying dips in massive up trends is a basic strategy that should not be overlooked.

Lastly, pay attention to the market wanting to retest extremes, last point but perhaps the most important.

Make sure you figure out an edge, spend time back testing. If you don't have an edge you are just gambling and will lose slowly or fast.
 
Palindrome said:
If you look through this most basic lens, and this is before even trying to understand technical analysis you might become enlightened....

Market ecosystem is designed from these basic concepts:

  • Large Traders/institutions Need Volume to operate

  • Brokers need large volume to get paid and keep the lights on at the exchanges etc

  • Markets need VIG, small traders so exchanges and large traders can manipulate them and take their money

Markets don't seek price... MARKETS SEEK VOLUME

Watch how the market flows towards levels to shake week hands out and let strong hands come in (retests of extremes). Brokers get paid heavy at these levels, because of the volume...Small traders get shaken out at these levels (VIG), and large traders can enter/exit at these locations.

The market price is attracted to these levels, the trick is to understand what levels are important because that's where the big guys get in, or get out. Those levels are also the levels the market TARGETS, ie Magnet effect pulling the market to these levels so that those three bullet points happen.

This is fundamentally how I view markets, and my TA helps me find these important levels where everyone can get paid that matters, and the losers pay their dues.

This is 8000 hours of wisdom... for free :)
More...

IMO this is incorrect. Market neither seeks volume nor price, it seeks VALUE. When it finds value it stays there. It may trade there a lot but not necessarily. Volume is often hidden and can be misleading (you never know if it is hedged in some other markets).

The problem is that there are different participants in the market (DT vs OTF) with different time horizon/objectives and pain threshold. Therefore it is much safer to say that at any given moment market moves until it finds opposing force, so it goes up looking for sellers or goes down looking for buyers. If it finds value, it stays there. If it overshoots, it retraces. But all of that is at any given moment. Therefore, depending at what time frame/horizon you're looking at, some of the moves will look like a "noise" in a bigger picture, that results from all these market participants entering/exiting trades with different objectives.
 
Let's look at an example, let's simply look at Natural Gas on Thursday and Friday of last week.

Where did Natural Gas top out on Thursday?

2.98, I would argue there was big volume there.

Where did it shake out the weak hands... Under 2.94... how was the volume there? Pretty sizeable. Where is it headed from 2.94???? up to 2.98 again... WHY? To shake out weak short hands and piss people off therefore creating transactions ie volume... Where large operators can trade... ie volume... where brokers can make commissions.

Guess where I bought? and what direction I was trading????

This happens over and over and over again.

I don't necesarily try to analyze volume, you are correct in some of your points.

I KNOW where big volume will be, and I place directional bets because I know that is where the market wants to go... Why... because of the three bullet points I highlighted.

Not to shoot you down... perfect value never exists in the market... Markets are never at an equilibrium, they always over shoot in both directions... Why??? to create extremes... extremes typically lots of volume, most pain is inflicted, most money is made at these levels:

  • Idiots get shook at these levels
  • Brokers make big money from large transactions
  • Institutions can create positions

Over and over and over again

Again, not to shoot you down... But what is your magic formula for "Value" and how in gods name do you make $$$$ knowing Value?

Bitcoin looked over valued at 2500, then it went to 20,000 quickly. Value is difficult to quantify, therefore I don't understand it... way to vague with no absolute rule.
 
Last edited:
if there is a lot transacted at any given price, that means VALUE, not shaking out weak hands. That is also called "high volume area/node", that means ACCEPTANCE.

Markets move from UNFAIR price to FAIR (=VALUE) price.

But that is a general statement. Ultimately, to any given trader it is most important what the market means/is to them, as you described, as they can build their own methodology based on that belief system.

I don't follow NG market so I'm not familiar with what is going on there.
 
I trade 11 different markets, They all do the same thing over and over and over again. No difference. Bonds trade the same as NG, as the same as Pound, as the same as Platinum.

I can show you the same thing in Bonds last week too, same exact move as NG. Over and Over and Over again ALL Markets :)

The game is rigged. You just need to understand where real players play.

Perhaps what I tried to describe is difficult to understand.

So I guess I should go back to Finance 101 Textbook, and look up Chapter 7: Fair Value Securities. After reading that section I will be able to make a Quarter Million a Month by fading every move that overshoots "Fair Value"

Sorry but I don't get how that explains how to read markets and make decisions to make money.
 
Doesn't matter how many markets one trades. They all trade to value (actually I would further defined it as perceived value) at that point in time - as punisher has pointed out.

Look at all kinds of tops and bottoms - some have high volume/some don't. Some trade to prior price support/resistance some don't.
 
Perceived Value, I get it.

But how do you define Perceived Value?

I guess Perceived Value = Textbook Value * Average Temperature of the Earth ?

I see exactly what you are saying, Markets will gravitate towards value. Very Simple, Very obvious.

Why are Finance Professors not making 10mm+ a year then?
 
Last edited:
Palindrome said:
Perceived Value, I get it.

But how do you define Perceived Value?

I guess Perceived Value = Textbook Value * Average Temperature of the Earth ?

I see exactly what you are saying, Markets will gravitate towards value. Very Simple, Very obvious.

Why are Finance Professors not making 10mm+ a year then?
More...
Not book value, not academic value ... perceived value by the participants at that moment. How does price move otherwise unless one thinks higher and the other lower. No you don't get it.
 
So current price at the current moment is determined by ALL participants perceived value.

Great.

I'm enlightened by the term "Perceived Value"

I propose, Price is quantifiable and can be predicted by understanding the following market forces:

  • Greed of Brokers - Taking markets to levels that encourage the most transactions
  • Greed of Exchanges- Algo's taking markets to levels where turnover is highest
  • Fear of Idiots - "The Vig" turnover of weak hands, keeping the Lights on at the exchanges
  • Levels where Huge Participants can Transact


The biggest question participants have is, "Where is the Market going?"

You would say to "Perceived Value"

I would say, to the point that maximizes Pay to the Largest Participants and to the Smartest Participants with the backdrop of making sure the Ecosystem Survives.

So where is the market going? To the point where the brokers get paid the most, to the point where the Algo's encourage turnover, the point where the idiots get shaken out to pay the vig, and the Levels where huge participants can transact.

If you understand where that generally happens, either on an intraday level, weekly level, monthly level... you will understand where price will go in the next hour, or next couple weeks, or next Year.

That's Technical Analysis.
 
LOL what a douche. WTF do brokers have to do with annnnything in this topic. Forget it.

A lot words to say little. Of value - perceived or otherwise.
 
You must log in or register to reply here.
Back
Top