Does the chart have any value?
- Thread starter bat1
- Start date
A chart can tell you many things that are valuable without even touching the question of where we going.
Characteristics of the instrument, perhaps seasonality, volume attributes, volatility in relation to indices, how it behaved during bear and bull cycles, and so forth.
ESD
Characteristics of the instrument, perhaps seasonality, volume attributes, volatility in relation to indices, how it behaved during bear and bull cycles, and so forth.
ESD
Certain Price action does in fact lead to a high probability pattern. When I say high probability, I am talking about 60% not 99%. So you can then forward test this in real time using a small bank roll to see if I am right or wrong.
The next step is money management.
For example, should I use a max daily loss. If I take a losing trade, how many more trades should I be willingly to take but not end up revenge or over trading.
What should I set my target and stop at. For example, do you base your target and stop on the chart, for example, market yesterday never breached 1100, so let's assume for sake of argument you take a long position, do you use a standard stop, or set an emergency stop below what the market was never able to breach. If we assume the market is either in a range or trending up which would be 2 reasons you may want to go long, why would the market suddenly go down. Well, it might be do to a report, and in this case, you have to assume if the market breaches this level, you then know that the market has proven your long trade wrong. This type of stop prevents total account wipe out.
Also, what time frame should we base our decisions on. The shorter the time frame, the more noise and random the market becomes vs a longer time frame which may be easier to recognize price movements.
If you like post a chart during real time on the ES forum during afternoon hours. I will predict price action that will take place before the close. For example, you post the chart, as soon as I see it, I will reply with a trade either long or short plus stop and target. Chart can not be 1 min, it must be 3, 5, 10, or 15 min chart.
The next step is money management.
For example, should I use a max daily loss. If I take a losing trade, how many more trades should I be willingly to take but not end up revenge or over trading.
What should I set my target and stop at. For example, do you base your target and stop on the chart, for example, market yesterday never breached 1100, so let's assume for sake of argument you take a long position, do you use a standard stop, or set an emergency stop below what the market was never able to breach. If we assume the market is either in a range or trending up which would be 2 reasons you may want to go long, why would the market suddenly go down. Well, it might be do to a report, and in this case, you have to assume if the market breaches this level, you then know that the market has proven your long trade wrong. This type of stop prevents total account wipe out.
Also, what time frame should we base our decisions on. The shorter the time frame, the more noise and random the market becomes vs a longer time frame which may be easier to recognize price movements.
If you like post a chart during real time on the ES forum during afternoon hours. I will predict price action that will take place before the close. For example, you post the chart, as soon as I see it, I will reply with a trade either long or short plus stop and target. Chart can not be 1 min, it must be 3, 5, 10, or 15 min chart.
You're asking if it has any value. The better question is, what is the oppurtunity cost of watching charts. I would rather read the tape than the charts for certain markets. If u trade discretionary then a chart is useful for identifying stable character traits, and perhaps magnet areas etc. For some charts, I can tell by how they move, if I a chart has predictability in it. For those time, a chart can be a great tool. With all that being said, it doesn't take the place of scientific research and they are generally overused as a tool for trading. For most newbies it's a distraction and a crutch.
Wrong! History always repeats itself - but each time it does the players are different, the time is different, the circumstances are different, so this throws the astute observer off the scent.
Haven't you heard or seen this being said or written? .... the same old patterns, over and over again, just repeating and repeating and repeating ...
in fact the above para is an entire chapter titled pretty much the same way in TAST9, the TA bible.