I have bought Al Brooks' Trading Course

[Eddiemorra]

I think schizo and volente are both TA people, and they're among the very very few who have had the guts to call lots of live trades in the past and both seem to do pretty well. Because of them 2, I'm pretty sure it's possible. I do think, however, that any 'edge' to be got from charts/TA is very small. I've come into contact with 2 people (one of them is the skype guy i've mentioned before and recieved lots of PM's about!), who seem to have a razor sharp/crystal ball type edges, and they both downplay 'TA'.
My only option is to carry on trying to make TA/Charts work, as I don't think i'm gonna be able to get these guys to divulge the important 'off chart' info to me, even at gunpoint

 

[Q3D]

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.

If one is able to develop an edge to be able to profit from the 60-40 directional bias the odds of time would still be highly against you. It becomes a numbers game with diminishing returns due to the aging and deterioration, rather than improvement over time, of the individual discretionary trader and the improving and evolving nature of the markets in the face of the deteriorating trader.

"Next up may be hollow-core fibre cables, through which light would travel in a tiny air gap at light speed. Trading firms speculate about a fleet of balloons or uncrewed solar-powered drones carrying signal repeaters to support a network of links across the oceans. In a decade or so, firms may even communicate using neutrinos, which travel at the speed of light and can go through obstacles, including Earth. It all spells big profits for high-tech trading firms, which now account for around 50% of equity trading in the United States and in Europe." http://www.nature.com/news/physics-in-finance-trading-at-the-speed-of-light-1.16872

 

[Frederick Foresight]

And I am certainly not trying to play into his hands. I know he's wrong... I can see it with my own eyes. In just this past month, its amazing how much my eyes have opened to my version of TA. At this point, I know with certainty that the only reason I'm not killing it is because of me, but all I need is staring me right in the face, its right there on the chart and its simply a matter of putting on trades in the best possible places and letting the chips fall where they may.

If that is indeed so, and you are not viewing your charts with a hindsight bias (be careful here), then that is all you need. What would someone else's numbers add to your method or your confidence in it? My only suggestion is that you start very small, and with the tightest stop that has tested well for you. If you can learn when to add to your profitable positions for your specific trading approach, you will be on your way. Just remember to keep the initially risked capital for each trade very small.

All I have ever suggested is that anyone do their own analysis and develop their own method, whatever that may be. And poke the all-or-nothing clowns in the eye.

 

[k p]

I don't think i'm gonna be able to get these guys to divulge the important 'off chart' info to me, even at gunpoint

I want you to keep trying though! LOL

This post is what I find remarkable. You make both a good case via your examples for TA, and also a case for the limited use of TA... and the shitty thing is that both statements are probably right! I think that an expert combining TA with T&S and DOM would be quite the trading machine. But at the same time, as long as your trade management is spot on, nailing every trade just isn't necessary as you reach a point of diminishing returns. For every variable that you might add which prevents a losing trade, you might be missing out on a winning trade, and you really don't know which is gonna be which before it happens. Now your guy might seem to know as you say, but I haven't seen enough of his trades to come to any logical/statistical conclusion. His win rate would have to be over 90%, which I think you said it wasn't, and his stops would have to be just ticks, which I don't think they are, in order to say he's got a crystal ball. Something like a 75% win rate along with a standard stop of 3 points and placing a few trades a day I do think falls within the realm of a very good PA trader.

 

[Frederick Foresight]

If one is able to develop an edge to be able to profit from the 60-40 directional bias the odds of time would still be highly against you. It becomes a numbers game with diminishing returns due to the aging and deterioration, rather than improvement over time, of the individual discretionary trader and the improving and evolving nature of the markets in the face of the deteriorating trader.

"Next up may be hollow-core fibre cables, through which light would travel in a tiny air gap at light speed. Trading firms speculate about a fleet of balloons or uncrewed solar-powered drones carrying signal repeaters to support a network of links across the oceans. In a decade or so, firms may even communicate using neutrinos, which travel at the speed of light and can go through obstacles, including Earth. It all spells big profits for high-tech trading firms, which now account for around 50% of equity trading in the United States and in Europe." http://www.nature.com/news/physics-in-finance-trading-at-the-speed-of-light-1.16872

I will ask you again, What would you propose in the alternative?

 

[Eddiemorra]

Something like a 75% win rate along with a standard stop of 3 points and placing a few trades a day I do think falls within the realm of a very good PA trader.

Maybe, but i've never seen anyone able to do this (well, lots of people can do it in hindsight as you know, but not in realtime)

Besides, he's away this week, and i've done well. Better be lucky than good!!?

 

[Q3D]

I will ask you again, What would you propose in the alternative?

The more profitable daytraders now operate at higher time frames than the 5 minute level, like 20min to 1 hour timeframes for discretionary trading, and look at other data like money flow in ETFs and volume spread analysis, unless they have algorithms running on computers near the exchanges.

 

[k p]

If that is indeed so, and you are not viewing your charts with a hindsight bias (be careful here), then that is all you need. What would someone else's numbers add to your method or your confidence in it? My only suggestion is that you start very small, and with the tightest stop that has tested well for you. If you can learn when to add to your profitable positions for your specific trading approach, you will be on your way. Just remember to keep the initially risked capital for each trade very small.

All I have ever suggested is that anyone do their own analysis and develop their own method, whatever that may be. And poke the all-or-nothing clowns in the eye.

Agreed again FF. Sadly now, there is enough damage that even starting small is difficult. Simply put, the absolute best trades happen when you're just not sure (even NoDoji mentions this). When its looking good, now the danger point is too far away for a tight stop. (In fact, everything I look at now centers around the danger point which maybe you would agree with as well)

On a day like today in the NQ, there are at least 5, and I'm being very conservative here, but at least 5 places where trades based simply on S&R and previous day or overnight levels could have been placed which each go to at least 10 points profit with only a 2 or 3 point stop. Never mind the fact that 10 points would be getting out much too soon, but lets just go with this.

So anybody else's numbers don't really matter to me at this point at all. But I'd still love to see it. I think it would have initially helped, perhaps even drastically shortened the learning curve, and certainly limited the losses... but it is what it is. It takes a while to understand that you're looking for a good trade (certainly not a stupid and emotional trade), but at the same time understanding that any one trade means nothing when a system relies on a series of trades.

 

[k p]

Maybe, but i've never seen anyone able to do this (well, lots of people can do it in hindsight as you know, but not in realtime)

Besides, he's away this week, and i've done well. Better be lucky than good!!?

Its funny because when I look at your charts (I even sometimes plot your trades on my ES chart as I see you call them and just track them), it seems to me that you're actually doing very well, its just that sometimes you take trades when in the middle of stuff. Don't get me wrong, I am nobody to be analyzing your trading, and this is much more of a compliment actually because of what I've seen of your calls in the past couple of weeks and some of your charts, I think they are decent trades, and your PnL is clearly showing this as well. The secret really is just waiting for something good, and then doing the same thing over again regardless of the last outcome. You're really good at that because you do keep working it! (luckily I haven't seen much of your crappy calls since you say you're typically always losing! LOL)

 

[Frederick Foresight]

The more profitable daytraders now operate at higher time frames than the 5 minute level, like 20min to 1 hour timeframes for discretionary trading, and look at other data like money flow in ETFs and volume spread analysis, unless they have algorithms running on computers near the exchanges.

If that is what works for them then that's splendid.