If you want to fail as a trader, study TA
- Thread starter The Expert
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Ok im going to jump into this thread a little late but better late than never right.
On page 101 there is a chart and The Expert ( there are no experts) but The Expert asks what the lowest risk entry would be...
The lowest risk entry would be when.......... the price breaks through the bottom support of the consolidation range at the top of the chart , then after breaking through the range it retraces where the old support was that is now resistance. This is where you would enter short with a stop loss above the resistance level (old support). The risk reward scenario is very good in this setup.
Second, The Expert mentions that gold , currencies , and indexes are acting strangely since their correlation is different than usual. I totally agree. I am "betting" that gold miners, silver miners and the like do very well in the next year since gold is RISING while the dollar is RISING. VERY UNUSUAL, but above all I will let the market tell me when I am right and when I am wrong.
Have a good weekend everyone.
Blox
On page 101 there is a chart and The Expert ( there are no experts) but The Expert asks what the lowest risk entry would be...
The lowest risk entry would be when.......... the price breaks through the bottom support of the consolidation range at the top of the chart , then after breaking through the range it retraces where the old support was that is now resistance. This is where you would enter short with a stop loss above the resistance level (old support). The risk reward scenario is very good in this setup.
Second, The Expert mentions that gold , currencies , and indexes are acting strangely since their correlation is different than usual. I totally agree. I am "betting" that gold miners, silver miners and the like do very well in the next year since gold is RISING while the dollar is RISING. VERY UNUSUAL, but above all I will let the market tell me when I am right and when I am wrong.
Have a good weekend everyone.
Blox
why is the first circle in the lower range low risk? It's a first test of a level that doesn't yet exist as price reaction point resistance, unless it was a previous level or a pivot or fib level.
Also you could use a very simple volume technique to spot the likelihood of the broken levels holding as reversed S&R. In fact you could spot the liklihood of those levels breaking in the first place using the same technique.
I think that if you are only looking at price then you are only looking at half of the data the Market is revealing about it's self.
Also, you lot can knock wiggly lines all you want, I've YET to see a stochastic mini divergence that HASN'T nailed the exact bar of the cycle peak or trough and been confirmed with good follow through on price (low risk - high reward). The trick is having the patience to wait for them.
I'll add as a caveat that it works even better when you're early in a trend, the higher tf, momentum and price action are lining up in the direction of your trade and you're not buying into resistance or selling into support clusters (both flat & dynamic) which brings us on to MAs if you deny that these act as effective S&R levels then you're talking rubbish, they add structure to an otherwise unstructured and chaotic environment, as do trend waves and trend lines.
It sounds complex, but with plenty of practice you can train your brain to pick all of this information out of a chart instinctively and quickly.
It sounds complex, but with plenty of practice you can train your brain to pick all of this information out of a chart instinctively and quickly.
But yeah it requires practice, patients and effort, this is where most people slip up, they come in as newbies thinking they're gonna make a million in a month without putting in the effort to learn the craft of trading First and when it doesn't happen they start slagging off the very methodology that they themselves couldn't be arsed to learn.
This rant is not directed at anyone in particular, but it anoys me when people say this that or the other doesn't work, when they've not even bothered to take the time to learn how it works, so how can they have an opinion when they've never actually used it correctly themselves.
Back to the analogy of tire kicking an f1 car and saying it doesn't work, just because the average driver wouldn't be able to hold the first bend, when the likes of Alonso, Hamilton, Button, Schumaker et al. have demonstrated time and
again that clearly it does work.
Rant finnished...
ps. I'm talking generically about any system or method.
This rant is not directed at anyone in particular, but it anoys me when people say this that or the other doesn't work, when they've not even bothered to take the time to learn how it works, so how can they have an opinion when they've never actually used it correctly themselves.
Back to the analogy of tire kicking an f1 car and saying it doesn't work, just because the average driver wouldn't be able to hold the first bend, when the likes of Alonso, Hamilton, Button, Schumaker et al. have demonstrated time and
again that clearly it does work.
Rant finnished...
ps. I'm talking generically about any system or method.
Prof. I've isolated part of the problem with those boredom trades- it's possibly not good to have a Market order tee'd up and ready to go with the mouse cursor hovering over the execute button constantly, since my index finger has a tendancy to act independantly to my brain... LOL
Thats fighting talk!!!
The interpretation of the thread title depends on how each of us defines success or failure, and that in turn depends on our personal objectives for being traders. Some people would be content to trade part time, almost as a hobby, in order to supplement an income, and using TA could well lead to success for those people who are smart enough, but with limited objectives. My objectives are much different and I don't believe that I can rely on TA to meet them. I want to make as much as I can from part time trading, to pay off my mortgage as soon as possible and then to pack in my job and trade full time.
When I started swing trading some years ago my trading style was discretionary and very undisciplined, with very little knowledge of TA. The result was that I lost quite a lot of money, but it wasn't a life changing event, just a wake up call to do better. That experience stopped me from trading for a long time but when I started trading again I did a lot of reading about TA as I thought that was the way forward, and last year for the first time I had a profitable year. The gains helped to pay a bit more off my mortgage but were not significant enough to change my lifestyle. This year though I am currently into a very tiny loss. Using TA seems to have helped overall, but its just going to take too long to meet my objectives, so I regard trading using TA as a failure.
Earlier in the year I spent more time studying TA on the InformedTrades web site where there are numerous free courses.
One course on volume spread analysis seemed very good and is step up from basic TA methods, but what I need is an even better trading method.
I do agree that volume does tell half the story, I don't think the expert would agree with that statement though. I think if you are good enough you don't need to use volume but for people that can understand volume I think it defiantly helps. For instance, anyone can spot a blowoff top without volume but I think it's nice to see the volume to confirm it . At points of support and resistance I think volume can tell you valuable info also. It's kind of like price is horsepower and volume is torque.
mysteron, I agree horses for courses and all that, but TA or any method for that matter is probably less than half the story in acheiving consistency, what's far more important is all the psychology stuff, etc. etc.
Blox, many people convince themselves that volume is complicated to read, when actually it isn't all that difficult at all, e.g. If a second test of a level is happening on higher volume than the first, then it will probably get taken out, it's really not that difficult. Notice I use the word probably, coz that's all any analysis method does is quantify probability, which is where the psychology comes in, ie. coping with having to deal with operating in a probabalistic and non absolute environment, aka the Market.
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