I have bought Al Brooks' Trading Course
- Thread starter Visaria
- Start date
They are not lying per se. But it is often marketing so that their investors feel better about why certain decisions were made ( in hindsight of course)
Not to mention that fund managers have a vested interest in keeping how they do things from the media.
In addition, 95% of all pro TA from fund managers is really really old info.
Add these things up and u decide if it makes sense to follow.
Prove it. Prove any of it, apart from the non sequitur I highlighted in red.
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You're making the erroneous assumption that you can predict the 60-40 directional bias of the market, aside from the error you made in assuming prima facie that you can properly manage your entries and exits and position sizing. If you were able to become moderately skilled in guessing about a 60-40 directional bias and executing properly, there is a much higher probability you would either find out that the market has evolved and you now have to write books and sell courses and webinars or just run out of money from losses and commissions/fees before you could start using that small fraction of capital to repeat profitable strategies to achieve a state of near certain success at trading.
Sorry, Fred. If i need to prove to you that most everything you hear about the financial markets is marketing -- i can't help you.
I really don't care if anyone believes me or not. In fact, its much better if you don't.
surf
Oh, so we have now entered the realm of...unsubstantiated claims...
Here is why I think its important. To truly know if a method works, you have to understand it. Us TA traders seem to have trouble explaining to the guys who don't use it and don't believe it. Likewise, many guys who say they don't even look at charts seems perplexing. So it seems like in order for one side to grant validity of a method to the other side, they would themselves have to really understand it, have worked with it, and perhaps have even made it work. This is a tall order.
So instead, we could use PnL as a sort of proxy. It really shouldn't matter what method you use, as long as it makes consistent money. Its just like backtesting a method to see if it has an edge. The PnL is not only a representation of that edge, but it also takes into account the ability to trade your trading plan. Lets not forget that even a great trading plan might prove to be useless in the wrong hands.
Now of course a PnL on its own doesn't tell us much, and there isn't much to learn from seeing someone post consistent gains, but at the very least, we could assume with a great degree of accuracy that once a person has a sufficient number of winning days in various market conditions that this person must have a true edge. Its much easier this way than a TA trader trying to convince someone that TA works since nobody ever really shares enough about what they are doing anyway since they don't want to give it away.
Edit: To continue with the last point, if someone was to show me a few weeks worth of charts, where they draw their lines, where they have their entries, then a logical person would be able to see that they are using TA to put on trades, here is where it worked, here is where it didn't, but the gains are bigger than the losses and after about the 10th or 20th trade, it would become obvious how its just the same type of thing over and over again. But no TA trader will ever share that much, and not for any consistent amount of time to prove that TA works over and over again. They simply don't want to give away all of their setups, which is fine. So the next best thing is to show the results of their method, their PnL.
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I agree that you cannot calculate the probability of future outcomes with numeric specificity. A frequency distribution is a distant cousin of a probability distribution. So, at best, we are dealing with the balance of probability, a decidedly more hazy proposition.
However, if you were hypothetically able to predict a 60-40 directional bias, then with adequate testing you could also predetermine a reasonably effective initial protective stop for a given market. Having done that, and having the capacity to hold onto winning trades longer than losing ones, and cautiously adding to those winning trades as circumstances permit, it becomes a numbers game.
If you disagree, please tell me what is the alternative.
My PnL would prove that what I'm doing doesn't work. It doesn't mean my method doesn't work, but it might mean that my application of it doesn't work. As I said above, a PnL is the perfect aggregate of having a plan with a statistical edge along with the demonstrated ability to follow it.