If T.A. works, if you're swing trading, how far in the future can you see?

[schweiz]

Sounds a bit more like wishing into the future rather than seeing into it.

It is like wishing with high probability, really seeing in the future is not possible I think. But "guessing" with high probability would be accepted by 100% of the traders if they would be able to do so.
If your high probability would lead to 80-90% profitable trades, not being able to really see in future would not be an issue anymore. And it is even not needed to see very far in future. Being able to watch 15 minutes ahead would make you already a very rich man.

 

[schweiz]

Technical analysis should 'see' as far as your results tell you it does.

If your indicator is working enough to make you profitable on that setup then great, if not then it's probably not a very good indicator. Try refining it.

One thing that can be a good exercise for dealing with FOMO (fear of missing out) is checking what the max profitable price was 30, 60 and 90 days after you exited (assume you're trading daily timeframes). One thing I realised you doing this exercise was that I would have mixed results if I let my trades run more, with some outstanding winners but also some quite profitable trades falling back to zero.

What is the value of letting your trades run longer? Do you pyramid into trades? Basically if you let the trade run, according to how you trade, what would the result have looked like? If you don't have consistent rules around that (i.e. you have arbitrary trade management depending on how you're feeling) then there's not really any point discussing more because you won't consistently apply the results of this research.

Alternatively it could be a really valuable bit of research to do because if it tells you that every so often by closing out a trade at a certain point that you're going to miss out on an extra bit of profit but that most of the time the price will fade away, then that can give you a lot of confidence to take the right action consistently for your portfolio.

That's a powerful piece of knowledge.

An example that I did not expect was from a friend who said that most of his winners started winning more or less straight away so if he had a trade that was a loser after three days then he just cut it because the likelihood of it becoming a winner was almost zero. The important knock on effect was it freed up his mental capacity to move on and be looking for better opportunities.

I did many years ago exactly what you described and posted that already earlier on ET. I daytrade the ES. In short:

• took 1,000 trades.
• wrote down the entry, the exit, the max open profit and the max open loss.
• started increasing the stop from 2 points up each time with 1 tick increments.
• tested different take profits.
  
• watched the overall results.
• After each run of a new stop I had to check: which trades were not taken as original setup.
• for the trades that closed earlier I had to check if there were additional trades because of the earlier closing. This indeed happened and changed the result.
  
• Additional trades or trades left out also influenced the compounding result of the return.

This whole process took a huge time as I did do this manually.
Nowadays the ratio's even improved because of improvements made in the sysem.Without the improvements the later results were always in line with the 1,000 trades analysis.

 

[Pekelo]

I would say it depends on the timeframe you are looking at. Different timeframes will give different perspectives.

This is the correct answer. Obviously using 5 minutes bars you can't predict weeks ahead. When I predicted the big Bitcoin selloff 11 months ago I used daily bars, and I think I was expecting the meltdown in the next 4-6 weeks...

 

[userque]

Hey guys,

I know there are a lot of people who don't believe in T.A. This is not your thread.

For the rest of you, I just wanted your opinion on how far in the future a person could reasonably project/guestimate assuming no surprise shocks to the economy?

TIA,

SM

It depends.

"On what?"

It depends, among other things, on what type of forecast you are looking for. Forecasting the exact close of an instrument five years into the future is generally less reasonable than just forecasting whether an instrument will simply be higher, or lower five years from now.

It also depends on how you define "reasonable" ... and how you define "shock" ... and "surprise."

It also depends upon probabilities.

A forecast that an instrument will be up or down 20 years out ... is not unreasonable if it is given a 50/50 probability. But a forecast that an instrument will be up or down 20 years out is less reasonable when giving a 100 probability of happening by the forecaster.

tldr: It depends.

 

[murray t turtle]

Technical analysis should 'see' as far as your results tell you it does.

Try refining it.

One thing that can be a good exercise for dealing with FOMO (fear of missing out) is checking what the max profitable price was 30, 60 and 90 days after you exited (assume you're trading daily timeframes). One thing I realised you doing this exercise was that I would have mixed results if I let my trades run more, with some outstanding winners but also some quite profitable trades falling back to zero.

An example that I did not expect was from a friend who said that most of his winners started winning more or less straight away so if he had a trade that was a loser after three days then he just cut it because the likelihood of it becoming a winner was almost zero. The important knock on effect was it freed up his mental capacity to move on and be looking for better opportunities.

%%
A] Aim @ never letting a profit turn into a loss. This is a cash remark;
And funny but true WSJ MARCH,2017 ''saw'' about a year into the future; 2 of thier bigg [billions] asset managers said exspect more vol..... [2017]LOL+ true.Sure enough,11 months /+, FEB 2018 vol is back LOL.
But here is why i like IBD much, much better than WSJ; IBD,FEB 12/+, 2018 week said vol is back; 50 dma proved it So i seldom use WSJ 65 dma moving average too little, too late.[Edit remark, a WSJ,MAR2017 to FEB 2018 projection or ''seeing''is useLess to my trend following. Plenty of WSJ weekly charts with SEPT sells+ NOV uptrends+ DEC sells are much more of a help than 52 week ''seeing in the future]

But WSJ has better weekly chart$ for SPY[ actually they name it S&P 500....... IBD mostly only prints daily charts for S&P 500, Nasdaqqq. WSJ has better take over articles//carl Ichan info.........3day move?? Sound$ like options or derivatives which require selling/closing monthly friday, /+.............................................................................