Thanks for this! I will look into them. I am looking to develop a rules-based trading system myself, this helps/prevents me from intervening too much during actual trade.
How to become better at Technical Analysis?
- Thread starter hekktor
- Start date
Thanks for this! I will look into them. I am looking to develop a rules-based trading system myself, this helps/prevents me from intervening too much during actual trade.
Bear in mind the choice of that multiple is to get a particular length of trade horizon - you shouldn't be optimising it to try and increase Sharpe Ratio.
Rob
I was in the middle of saying something then saw it was actually you! Ok I will try to re-read that part again.
I think you're mixing things up. Carver is a systematic trader and there isn't much TA in his methods but it's algorithmic and statistics. TA is used mostly in the sense of visual charting. Not much of TA can be tested due to vague definitions of the formations. If you reduce down TA to a few indicators and rules you can backtest them. Your objectives are not clear from your post. Do you want to trade intraday, or follow trends for weeks or months? Good psychology is no help if a trader has no edge. The good psychology won't buy you an edge. Coins don't have enough history for backtesting to make sense. Why don't you start with a liquid market with good history, much like E-mini?
Hi! I think I might be a little confused by what you said. I look at price movement, I do use them on a chart for visual inspection, but I still limit/translate all of them to objective rules. Even measurements like recent swing low, I try to translate to an objective formula (I guess this is just how my brain is wired). Does this still count as TA?
I have read about support and resistance lines, as well as and chart formations that are subjective (like head & shoulders), although I am leaning more on the ones I can establish rules (like all-time highs, Bollinger Bands, MAs). That's why I also drifted into systematic trading by Carver. However, I do not see myself trading automatically (like with a bot).
So I think I'm mixing the science and art by looking a ideas for price action on the chart, and translating and measuring their performance using statistics or at least likelihood and degree of profitability.
But this E-mini looks like it trades round the clock! I was initially limited to forex and crypto due to my timezone. I will definitely have a look at this, thank you!
In terms of timeframe, my goal is daily for now, and more like a trend or swing trader. I did explore intraday, but I need more experience to dabble in it. Time-wise, I can spend several hours on screen and I can see myself doing that comfortably.
TLDR:
So my objective is to trade stocks/crypto as a trend/swing trader on the daily time frame (or other instruments that are tradeable on the Asian timezone).
To do this, I need to find my edge -- but I would appreciate hearing how people develop theirs (not necessarily disclose their edge). Do people begin with backtesting, and by how much do you look at it? Do people limit to a certain number of rules?
I have been doing backtests but they are not performing well for future time periods, so I'm still looking at other options.
One member also shared another forum above, and I'm also getting more info on that one. But thanks for the things you said, I'm taking notes!
Just my 2 cents. To be good at something, you have to specialize or concentrate on a few things. Here you are trying to learn which is fine but, as someone already noted, you are all over the place. Just my guess, you are mixing time frames, mixing different strategies, fundamental and technical analysis based strategies. It will just confuse you and waste precious time. First determine what you would like to trade, crypto, forex, stocks, options, ETFs, IPOs, etc. Then, select a time frame that you favor. I was never good at day trading when I tried it. However, swing trading and trend following is what worked for me. Once, you have chosen a time frame, day trading, swing trading, trend following---focus your attention to trying to learn how to read stockcharts (technical analysis) properly. Then, add risk management and proper position sizing. Work on developing a trading system. Backtest that trading system. It must have an edge or positive expectation or you are not going to succeed. Do all these things right and your chances are 10 times better than the average retail trader who is just guessing, following other ill informed traders like them, listening to CNBC and Bloomberg, etc. None of those work.
You might be a good fit for the CMT program it gives a broad overview of TA subjects and you could pick which path to go from there. For example I did the program about 10 years ago and it led me to quantum/systematic trading since that works is what resonated with me but you could be different. Everyone is different that’s part of the eureka moment, finding what fits with your beliefs and personality
Just keep reading and researching. You need to do a lot of backtests until you find something. There is no shortcut as you find your strategy which fits for you personally. There are many good strategies around, but you also need to define your trading universe, whether you want to trade stocks, futures or something else.
There is software for such... Wave59. I looked at it years ago.
The basic premise at that time... (1) 9 variables, and (2) when a net of 5 of them are positive, it's a buy. When a net of 5 are negative, it's a sell.
Not my favored way for TA, but it's a thing.
And then there is the "universal" Price TA. Works in all time frames, works in all markets...
"Buy Support
Sell Resistance
Chase Breakouts"
KISS, baby!
That's it.
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I think you must adjust your tools to your assignment. Do you targeting to 10% with 500K or 500 per day with 50K. It's totally different approach.