Have you used dbphoenix's teachings to become a successful trader?
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I'm no expert, and this is hindsight, but given that the arrow is after a lower high, it's possible that real-time price action was bearish for him at that point.
To me, the fact that you're seeing that there are more variables than what the SLA/AMT portrays is a very good thing. You see why it can't be automated, or at least, why a purely mechanical application is probably not that profitable. That's also why successful price action traders spend a considerable amount of time in replays to learn through experience the subtleties of why two similar situations yielded different results (apart from noise of course - nothing works 100% of the time). Subtleties which may not end up described in their trading plan, for lack of being easy to pinpoint. And replays aren't just at the beginning of their career, either: I know of one who's been at it 40+ years and still does hours of replays every week in addition to his trading, to stay in touch with the markets. Heck, one of his criteria for taking or leaving entries wasn't put into words until he was already 30+ years into it! If you can't "see" something, if it doesn't make sense, that's your sign to take a step back and replay lots of instances of it until something clicks. We distinguish patterns from noise through repetition, no way around it.
Back to pure SLA, the way I see it personally, for intra-day, it's easy exits until one knows price action more intimately: hang on and once price stalls through the line, quit before it turns back. Easy, no hesitation, no scalping tiny initial profits, no anguish, just waiting for the condition to occur. I think that's what @dbphoenix means by "keeps traders out of trouble"; if someone keeps exiting poorly or emotionally, SLA exits might already be an improvement.
I don't know whether anyone trades based solely on that SLA-AMT.pdf thing, so you raise a good point there. However even DB says that it's more of training wheels on one's way into more experience with price action.
"(Bloomberg) -- High-frequency trading firm Virtu Financial Inc. reported another year without a single day of losses, extending a near-perfect streak stretching back to 2009 that contrasts with dwindling profits at competitors.
Virtu made money every day in 2014, generating revenue of $723 million and net income of $190 million, according to financial statements filed with regulators Friday. The 148-employee company, which uses computerized strategies to buy and sell everything from stocks to currencies, has had only one losing day in its six years of operation."
---Only one losing day in 6 years of operation
---Made money everyday in 2014 ($723 million revenue, $190 million income with 148 employees, so each person generated more than a million income on average)
---uses computerized strategies to buy and sell everything
Computer technology revolutionizes every aspect of trading business. Your best asset developed over 3-4 decades on drawing a straight line could become a big burden to learn something new and more advanced.
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Before getting too excited, I suggest that interested traders read the thread.
That aside, yes, computer technology does alter the landscape, but it doesn't change it. The market remains an auction market, and an auction market is governed by the Law of Supply and Demand. And given that the typical retail trader does not have access to this sort of computer power, it isn't pertinent.
Given the experience of the last twenty years, the result of computer usage has meant for the most part that the typical trader loses more money faster.
Who are you referring to?
So is the richest guy I know. surf
Or study AMT and read my posts.
George Soros also uses them, or at least TA more generally, I believe for timing after making a decision about longer term direction.
Trend lines are useful for clearly illustrating when the trajectory of price has changed, and that one should be alert for the possibility of a range forming, or trend resumption or reversal.
I know people who say trend lines are arbitrary as one can draw them in several ways, and they prefer support and resistance lines. Well, there is a paper available from the New York Fed site where a study was done on S/R lines on a few forex pairs to see if price respected these levels intraday at least. The comparison was between randomly drawn lines and the levels provided by several Forex firms to their customers daily. The finding was that price respected randomly drawn levels 56.2% of the time, and the Forex firm levels 60.8% of the time. There was also a significant difference in the usefulness of the levels between firms.
All said hardly an earth shaking difference, so pick your poison.
I know people who say trend lines are arbitrary as one can draw them in several ways, and they prefer support and resistance lines. Well, there is a paper available from the New York Fed site where a study was done on S/R lines on a few forex pairs to see if price respected these levels intraday at least. The comparison was between randomly drawn lines and the levels provided by several Forex firms to their customers daily. The finding was that price respected randomly drawn levels 56.2% of the time, and the Forex firm levels 60.8% of the time. There was also a significant difference in the usefulness of the levels between firms.
All said hardly an earth shaking difference, so pick your poison.