Do you see patterns in Random Walks?
- Thread starter atlTrader666
- Start date
Insider trading...!
The sure way to riches...! The part about the supply and demand of an asset is actually quite valuable information.So feel free to explain how you assign significance to patterns...!?
See the scenario I laid out above... A double bottom on a 1 minute chart vs. a bear flag on 15 minute chart... Which is more valuable?
Quote from CoolTraderDude:
Yeah... I used to be a prop trader afterall... I know technical or better yet... chart based trading works... But I don't know if anyone can actually do some accurate pattern recognition that has some predictive value. I see the market as a game of "hot potato"... You've got too jump in when it's moving and you've got to get rid of it before it stops. You also have to jump out instantly if it goes against you. That's how I made my money in proprietary trading.
Patterns for the most part teach the exact opposite... I started out as a big TA guy but it didn't work for me and I was quickly advised to ditch the method. Patterns teach that you can predict what happens next... As such, the pattern trader will step in front of a moving market expecting his pattern to play out... In real time it rarely works out and you'll find that the mind often plays tricks on you. It's easy to recognize a pattern in a tapestry or in a chart after it happened. BUT it is really hard to do when the market is actually moving. You may think that you have a "double bottom"... And sure enough a "W" forms on the timeframe of your chart... You go long and watch as the bottom falls out of the market⦠You look on a higher timeframe and you notice that it isnât really a âWâ forming but rather a âbear flagâ continuation pattern⦠You go âOh man, how could I have been so stupidâ¦!?â
This happens all the time in real trading⦠So which pattern actually has more valueâ¦? The one on the 1 minute chart (âWâ) or the one on the 15 minute chart (bear flag)â¦? The real answer is NEITHER⦠At the moment when you notice them both are equally valid! That's Fractal Geometry messing with your head...!
Think about it for a second...
It's actually the same chart!!!:eek:... Like I said... Fractal Geometry messing with your head!
Yes, that is why trading is so difficult.
And that is also, why i am a genious, because i know how to read the charts correctly.
Nobody said it would be easy, but it can be done.
I just told you guys how i do.
If you believe it or not, is up to you, i dont care.
Good afternoon
LOL
You think not complex enough. Daytrading is much more complex then longer timetrading. All timeframes have special rules, based on historical facts, made rules by the history.
For your example, you must look on the 1h chart and the 4h chart, as well to the daily, then the 30min, 15min, 5min.... 1min.
Its not so easy, how you think.
Quote from HATEtheRisk:
LOL
You think not complex enough. Daytrading is much more complex then longer timetrading. All timeframes have special rules, based on historical facts, made rules by the history.
For your example, you must look on the 1h chart and the 4h chart, as well to the daily, then the 30min, 15min, 5min.... 1min.
Its not so easy, how you think.
But I happen to be a great daytrader despite the fact that I don't practice it anymore...!
I don't think that you get the fact that they're all actually the same chart!
A 5 min. chart has 5, 1 min bars... 15 min. chart has 3, 1 min. bars...I'm not here to poach a method, you guys can relax... I just want a scientific explanation for the significance of the patterns. Let's just do the "W" double bottom... Everyone is familiar with that... If you include all time frames of formation and a long enough data set I doubt you would get more than 50/50 out of it...!
These patterns are a part of Fractal Geometry... You usually get a pattern, within a pattern, within a pattern... So how do you assign significance scientifically...??? Statistics works but only on a limited set...
Personally, I prefer to play "hot potato" with the market... I see a green bar on my time frame... I buy... If it goes my way I hold... If it stops moving, I get out...!
I could probably teach you guys the prop system that used when trading if you're interested...!
I might do it if I can get more than 3 different people interested and I'll do it on another thread...
On fractals and scaling in finance page 39 Mandelbrot suggests that price changes over fixed clock intervals are more chaotic than price changes from successive transactions or based on volume variations...Quote from CoolTraderDude:
Patterns for the most part teach the exact opposite... I started out as a big TA guy but it didn't work for me and I was quickly advised to ditch the method. Patterns teach that you can predict what happens next... As such, the pattern trader will step in front of a moving market expecting his pattern to play out... In real time it rarely works out and you'll find that the mind often plays tricks on you. It's easy to recognize a pattern in a tapestry or in a chart after it happened. BUT it is really hard to do when the market is actually moving. You may think that you have a "double bottom"... And sure enough a "W" forms on the timeframe of your chart... You go long and watch as the bottom falls out of the market⦠You look on a higher timeframe and you notice that it isnât really a âWâ forming but rather a âbear flagâ continuation pattern⦠You go âOh man, how could I have been so stupidâ¦!?â
This happens all the time in real trading⦠So which pattern actually has more valueâ¦? The one on the 1 minute chart (âWâ) or the one on the 15 minute chart (bear flag)â¦? The real answer is NEITHER⦠At the moment when you notice them both are equally valid! That's Fractal Geometry messing with your head...!
Think about it for a second...
It's actually the same chart!!!:eek:... Like I said... Fractal Geometry messing with your head!
So the key to your riddle may be to move away from time based charts and towards tick or volume based charts...
Quote from CoolTraderDude:
But I happen to be a great daytrader despite the fact that I don't practice it anymore...!
I don't think that you get the fact that they're all actually the same chart!
I'm not here to poach a method, you guys can relax... I just want a scientific explanation for the significance of the patterns. Let's just do the "W" double bottom... Everyone is familiar with that... If you include all time frames of formation and a long enough data set I doubt you would get more than 50/50 out of it...!
These patterns are a part of Fractal Geometry... You usually get a pattern, within a pattern, within a pattern... So how do you assign significance scientifically...??? Statistics works but only on a limited set...
Personally, I prefer to play "hot potato" with the market... I see a green bar on my time frame... I buy... If it goes my way I hold... If it stops moving, I get out...!
I could probably teach you guys the prop system that used when trading if you're interested...!
I might do it if I can get more than 3 different people interested and I'll do it on another thread...
You know, i am the true Master of patterns in the markets.
The charts are like a open book for me.
Of course its pretty hard to learn this all, a lot of stuff.
You are right, patter in pattern in pattern, the more the better.
And yes its the same product at the same time, but its not the same chart, every timeframe is a own chart, thats why you have them.
The difficult thing is to know, when all important timeframe patterns move into each other and break through the blockage of energy cycles restistance, after the law of the lowest resistance, then price moves, in other words, you can clearyl analysis when the big players decide when to buy or sell, exactly the timepoint, because nothing in the market happens without a reason.
The big players know everything and on the charts are in reality all informations written in, you need to know, to predict the future price move odds.
And the key to this is like always STATISTICS.
You can test and prove every idea with statistics and see if it have any value or not.
About your problem for patterns in patterns, you must know this is pretty difficult and also for me sometimes i am wrong with the exactly correct timepoint right before prices move.
But i found many tools to determinate it so exact as possible.
I give you one clue about this problem, there is always one bigger timeframe what rules the patterns on the lower timeframes, as long you dont have this bigger picture right, price will not move, cuz how i said, they are always pattern in pattern in pattern.
And before price moves, there is always a lot blockage of energy what must be tested and retested in a trading range of high and lows, before price breaks out.
But the markets are truly rigged and move in regular orders.
But how i said its pretty difficult to figure all this stuff out and i can understand that you are confused about this.
So, the best for you might be your hot potato trading style.
In the end the game is only about making money and doing a successfull business.
How you do it, doesnt matter in the end.
Good luck