Can you please elaborate what you mean by "flaws in behavior"?
If Technical Analysis doesn’t work, how do you define a bull market?
- Thread starter Blitzjoker
- Start date
Read Daniel Kahneman — lots of heuristics people use to make sense of the world lead to sub-optimal decision making.
Nothing unusual or nefarious. I just didn't engage on this site for a few years, but it has become more interesting than it was before. As to being an 'alt', that is not my doing, but whatever algorithms the web site has set up for users who return after a few years with a new e-mail address.
I always use technical analysis as it works for me. That being said, technical analysis is an art form, not a science. A bullish chart to me may be bearish to someone else.
Think of price movement as waves in the ocean. While the wave is coming to shore, it could be defined as a bearish wave, a bullish wave, a range wave, or a random wave.
When you watch the wave come to shore, it will take a certain amount of time to complete it's journey to the shore. During this time period, it will maintain it's shape till it finally crashes into the shore. So during this period of time, you can use TA to help determine the when to get onto the wave, how long to surf the wave, and when to get off.
That being said if price is going up from the bottom support of the wave, it will go to the top resistance level of the wave. Therefore, if you get long before that level you can either target that level or at the very least go for 2 points without fear that price will suddenly turn around and stop you out. Also, you would not want to go long right at the resistance level since if price is in a range, it will fall back down. If you know it is in a range and not a trend instead short near the resistance level of the wave.
To determine the type of wave, you look at past price action. As noted the price wave will stay in it's current form for a certain amount of time.
When a price wave is in a random pattern, it may create a technical pattern called a barb wire that you would not to trade since this wave will just make you crash into the rocks over and over again by constantly stopping you out.
When you watch the wave come to shore, it will take a certain amount of time to complete it's journey to the shore. During this time period, it will maintain it's shape till it finally crashes into the shore. So during this period of time, you can use TA to help determine the when to get onto the wave, how long to surf the wave, and when to get off.
That being said if price is going up from the bottom support of the wave, it will go to the top resistance level of the wave. Therefore, if you get long before that level you can either target that level or at the very least go for 2 points without fear that price will suddenly turn around and stop you out. Also, you would not want to go long right at the resistance level since if price is in a range, it will fall back down. If you know it is in a range and not a trend instead short near the resistance level of the wave.
To determine the type of wave, you look at past price action. As noted the price wave will stay in it's current form for a certain amount of time.
When a price wave is in a random pattern, it may create a technical pattern called a barb wire that you would not to trade since this wave will just make you crash into the rocks over and over again by constantly stopping you out.
Hello Scataphagos,
I was just telling my buddy this last night. TA is works.
you know why TA works for us retail traders?
Because we do not have the time and energy to research and find out what else works to make money trading.
I am just starting to realize, that TA is the only option I have to make money. And it is a very very very good feeling.
I wish years ago someone just grab me by the ears and say "SHUT UP boy and stick with TA and guess when to exit and DO nothing else in life"
I would have saved alot of time. lol
If wannabe traders hang around long enough, they eventually come to the same conclusion as you (and I).
It's a Spock-ism... "When all other alternatives have been eliminated, that which remains (regardless of how implausible is may seem) must be the truth."
(Unlike most, I started with TA right out of the box. It all began with comparing the results from buying/selling the price cross with its 20 day moving average vs "buy and hold". However, the only MAs I consider these days are the 50 and 200... not their crossing but how price behaves at those averages with a couple of conditions. They still work very well, but there aren't all that many in a year for any security or index.)
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Hello Scataphagos,If wannabe traders hang around long enough, they eventually come to the same conclusion as you (and I).
It's a Spock-ism... "When all other alternatives have been eliminated, that which remains (regardless of how implausible is may seem) must be the truth."
(Unlike most, I started with TA right out of the box. It all began with comparing the results from buying/selling the price cross with its 20 day moving average vs "buy and hold". However, the only MAs I consider these days are the 50 and 200... not their crossing but how price behaves at those averages with a couple of conditions. They still work very well, but there aren't all that many in a year for any security or index.)
You are right man. The trader that knows TA the best and makes good guesses when to entry and exit, makes all the money.
Yes sir, I am sticking and dying by TA and just reading Price on the chart. Everything is pure waste of time. Why is it a waste of time? The human brain and 2 arms do not have enough time or money or energy to go do anything else.
It sounds very odd and us retail traders do not want to hear it, but for me here it is and I hope it helps others, it is really just this simple to do the following:
1. Pick a timeframe or bar type to trade
2. Stare at the price all day or a few hours.
3. Guess and Gamble price direction to make some money until consistent guessing and gambling correctly.
If you do not know want to do those 3 steps, go dollar cost average in SP 500 index and go enjoy life.
1. There's not all that much "guess". With Price TA you KNOW approximately where you should buy... because the market told you. You KNOW approximately where you should sell because the market told you. However you do need to guess what you are going to do about "counters"... you don't know how big they will be or how long they will last.... so you have to guess as to whether it will be correct to "ride it out" and hope it's short and shallow... or trade out and back in (perhaps) just in case it turns out to be much larger. That decision is always about 50-50 and there doesn't seem to be anything you can do to swing the odds more favorably.
2. DCA only does a little for you if the market is declining early in the process. It ends up being B&H regardless.