There’s 1440 minutes every day, day after day. Nothing random about that.
If you had to start over...
- Thread starter David's faith
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There’s 1440 minutes every day, day after day. Nothing random about that.
Post-hoc, not dynamic, but I'm not gonna argue the topic except in person
"Invalidates all back testing". Have you ever even backtested something? of course you have to also than forward / live test it and only a moron or someone completely new to the markets would expect to get the same exact results. I've back tested strategies before that looked good and than forward tested them and they also worked good (although I fully admit not as good as the back testing), but it wasn't so far off that it made back testing "invalidated".
Well,.. according to your definition it falls in the class of indicators. I see your point and most would consider bars or candles as the movement of price over a span of time. They are not like a RSI, MACD, etc which uses the movement of price as an input.
I’ve traded with tables so I do understand what you are describing in price charts as an “indicator.”
Well I have to admit the basis of what I use is pure price action, but at the same time I have some indicators, while highly customized would be classified to most people as some what related to RSI, awesome oscillator and etc. They provide some really strong context and help keep track of some things, like imbalances, previous high volatility areas and high velocity moves, that a human couldn't possibly do, even on a single chart. Would they be absolutely necessary for me to run a profitable day? most days probably not, but they certainly help increase my win rate via context and also profit factor allowing me to hold trades longer, knowing will likely return to an area (based on previous price action, again marking area's for me so I don't have to manually find and mark them).
Of course just my personal experience, but it's just kind of odd to see everyone repeating the indicator line, almost seems blindingly repeating it sometimes since there's rarely or never any context or explanation attached with it. Both logically and practically through actual trading makes no sense to me, but maybe I am the exception.
From my humble opinion, it depends on what kind product/market you are trading in. I view trading as an artform. Everyone has an opinion/idea and how they express that opinion/idea (via trade) on the canvas is key. However, if I had to choose one out of those four, I would take price action. Price is the consensus of value by market participant at the moment of transaction (lol an abridged quote from an old book). The movement of price dictates market participant reaction so understanding its why and how would be where I start.
No volume bars or MAs on intra-day charts, but I keep the 200 and 50 day MAs on daily charts.... everybody does that. (Anyone who doesn't should be.) When those MAs act as support or resistance, they are Price TA plays. Sometimes the market goes back and forth across one or both MAs like they weren't even there. At those times they have no meaning and you shouldn't be trying to play them.
Sometimes it pays to know the institutional ownership and transaction. They are the "smart money" and have access to information that retail investors do not. So, it's good to leverage on them. Please exercise caution as this is not a silver bullet. Finviz.com is a good source of information. Don't take my word for it.
Institutional Ownership: Pros and Cons (investopedia.com)
Institutional Ownership: Pros and Cons (investopedia.com)
The context here is trading. Of course seconds do not occur randomly. Does that even need to be stated? Lets look at it in a different way. When the next tick will occur is unknown and so can be treated as a random event. It is very important to understand that the future rate of change is unknowable. Back testing will arrive at some sort of average, but that is not very helpful, all it will do is lengthen the time taken to empty your account.
Yeah of course there is organized chaos in the markets, that one would be forced to label random, does that even need to be stated? That doesn't mean that often there isn't a clear probability that market is more likely to move in one direction or other, depending on if a larger player is actually accumulating for a long, accumulating for a short, distributing their previously accumulated long position or looking to force out over aggressive shorts. All four of these events trade differently and often show differently. Of course I am not claiming to be able to always tell the difference or always get them right, but you don't have to be 100% correct to make money consistently, just have the probabilities stacked in your favor in a consistent, repeatable pattern.
Or put in a different way as you might say, of course with so many dynamic buyers and sellers there are random moves, but again larger players generally have very specific intentions on a day and are looking to create a net weighted average, not buy and sell at all once. Therefore to say the markets move randomly on a macro scale, really defies logic. Again, that doesn't mean they don't use dynamic buying and selling to get other traders positioned on the wrong side before making the move. That does obviously happen.