And the way to know if they work at all is through testing, which most people dont do. They just take whatever weird pattern a book tells them it works and trade with it, some of them will suceed by sheer luck and they will be the ones saying that pattern works, while the majority will lose
Head and Shoulders pattern, garbage?
- Thread starter Daal
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And the way to know if they work at all is through testing, which most people dont do. They just take whatever weird pattern a book tells them it works and trade with it, some of them will suceed by sheer luck and they will be the ones saying that pattern works, while the majority will lose
If a profitable trader uses TA...his/her success is not due to luck nor due to TA alone although having a few lucky or unlucky trades here and there is part of trading.
Thus, I highly recommend you read my prior message about why profitable traders are successful to understand that their use of TA is just a piece of the puzzle in their trading plan.
Successful use of TA requires a team effort from other pieces of the puzzle (e.g. market experience, money management, discipline, proper capitalize et cetera) and if your team sucks...your TA results will suck.
That's why we hear often someone say it worked great in backtesting but when I traded it...it's making very little money or losing. That's because backtesting can not incorporate those other pieces of the puzzle in the testing rules. Just the same, there are some traders that takes a poor performing backtested method and are very profitable with it because of the impact of those other pieces of the puzzle sort'uv gave the losing backtested method an energy boost (teamwork) in real trading.
Also, just remember most traders aren't suitable for trading prior to their very first trade after you dig deep into whom they are as a trader. Now imagine what happens when you arm them with TA and nothing else...
Losers.
Yet, if you're really interested in academia of TA, go test the theory of giving a trader one piece of the puzzle and nothing else to see if that one thing works. For example, give a trader discipline while having no money management skills, not proper capitalized, no trade strategy, no proper trade environment, no market collaboration et cetera...
I bet you show up at EliteTrader.com or anywhere else online and state Discipline doesn't work.
I've never met a profitable trader that uses TA to be using it alone.
Mark
Quote from NihabaAshi:
Just the same, there are some traders that takes a poor performing backtested method and are very profitable with it because of the impact of those other pieces of the puzzle sort'uv gave the losing backtested method an energy boost (teamwork) in real trading.
I bet you show up at EliteTrader.com or anywhere else online and state Discipline doesn't work.
Sorry but you are wrong, I can give a losing moving average scalping system to anyone in the world and they wont make money in the long-run. Think outside the box, discipline actually hurts in this case since the system doesnt make money. An undisciplined guy trading a awful system has a better chance of survival
Regardless if other parts of the 'team' are present, in the case you are talking about a losing system. A system already tells you when you open and close positions. Position sizing does not affect your edge, discipline cant turn an unprofitable blackjack strategy into a winning one
Why dont you try the 'H&S challenge' and trade the system explained by the New York Fed paper and try to make money, report here your results. Goodluck getting your monster discipline to overcome that garbage pattern
Nothing to apologize for. Aso, I don't know anything about a moving average scalping system nor did I mention such nor did I know this thread was about such. Simply, you could be right that someone using a moving average scalping system won't make money.
Thus, I thought this thread was about the Head & Shoulders pattern and not about moving average scalping systems. Also, as a reminder, my theme is that you can't be profitable via ONE THING ONLY while ignoring everything else that's required to be profitable. Therefore, I am not saying that if you have a poor trade method that you will be profitable if you ONLY have one of those other components as if it's the holy grail. I'm saying you need a lot of things and too many traders concentrate on their trade method while ignoring everything else until it's too late...hopefully that's clearer now.
In addition, a profitable trader with all those components I mentioned will take someone's losing method...make the appropriate changes and apply it in a way that it works with his/her team ingredients. Surely you don't think a profitable trader will use it as is without making any adjustments to fit within the puzzle.
I don't play blackjack and you could be right...no debate from me there.
As for Position Size Management, it does have an impact on trading results and it has an impact on how we manage the trades. Then again, as a reminder, it's just one piece of the puzzle and I highly recommend not to concentrate on it as if it's the holy grail via ignoring all the other important components of a trading plan.
Yeah, I've been using it effectively for many years via the help of volatility analysis and intermarket analysis.
If I did, I wouldn't use it as is because it is poorly design. Thus, it wouldn't fit well with other components of my trading plan. Simply, I would make adjustments (changes) so that it works well with those other components in my trade methodology.
By the way, I've been using H&S patterns and others price actions profitably for over 10 years as confirmation to my primary trade method (not disclosed). I'm sure not going to use someone's else poorly designed H&S method with real money on the line that ignores everything else involved in trading profitably.
Of course, don't forget about that one big piece of the puzzle...market experience. If you don't have the screen time...you're at a disadvantage although you can minimize that disadvantage via a good trading plan.
P.S. My trade results are reported every trading day elsewhere outside of ET for many years now...trades posted in real-time along with market commentary and statements. I'm doing just fine whenever the H&S pattern appears or any other pattern. As for your moving average scalping system...not interested because I don't use indicators.
Mark