Is chart trading dead? (At least when it comes to ES)

volpri said:
Yes, it is all of that and more. A trader just gotta get good in all those areas and flexible to bend in all those areas. Markets do not "live" by our rules. There are only moments when probable success in a trade is high like 90%. Most of the time if a trader can "see" 60% or 65% probabilty of success he best make haste and place his bets.

Many times probability is only 50% or even less. A trader can still trade the lower probability but will PROBALLY get stopped out more often. However, the times he does get the direction correct ..well..it can make up for all the stop outs.

There is no high level of certainty in the markets, and cannot be, or all who found it would ...well be extremely rich. There are only pressures bull or bearish..up or down..and determining which has the upper hand at the moment is a traders primary task before placing a high probabilty trade. A low probabilty trade can be placed if a trader can read the larger context and interpret it correctly.

Markets have been known to twist interpretations..decisions....stats...into a convoluted mess that has no redemption. That is what stoplosses are for. ROFL
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Great Post -- thanks
 
Sprout said:
Your logic is good. However your particular beliefs around the relevancy of volume determining price is not so good.

If you are perceiving the markets as each bar a coin flip, then one's progress is
dependent on when you are taking the coin flip in the series and when you are not and how much of your stake you wager on any particular flip.

A coin flip near the highs or lows of the previous bar on increasing volume creates a different context than the coin flip taken when there is decreasing volume.

For most, the market is ruled by the paradigm of game theory. If you subscribe to this belief, then understand your probabilities, place your bets and take your chances.


The wisdom of the crowd

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Sprout, I now have a new appreciation for your posts. (I previously had the impression, that you were intelligent, as well as anxious to move through threads with an attitude of some superiority or hierarchal grading approach to posts -- particularly ones that did not fit with your philosophical bias This contribution of the "wisdom of the crowd" is Brilliant. Thanks.
 
Laissez Faire said:
What you're really saying is that you haven't found a high level of certainty and that you aren't extremely rich.

There are certainly others who've become 'extremely rich' from trading, so I would reconsider what's actually possible and not in trading.

How can there be any progress in trading if one never do any better than a mere coin flip? :)
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LOL ..NO that is not what I said or mean't...what I am saying is that there is no high level of certainty to be found, at all times, in the market. There are moments of high probability. NO need to find a high level of certainty to become rich from the markets. And one can become extremely rich even in a high level of uncertainty. But not all will, because they haven't learned to trade in uncertainty. If the markets were 100% certain and that could be discovered then all COULD be rich..LOL. It just doesn't exist. If you think it does then you are mistaken.

What will be the open, high, low, close, and of course the volume (Rofl) in say the Nq tomm? Exact figures ok!

Yes, there are many that have become extremely rich from the markets. Others (way more) have become extremely broke. Those that became rich didn't do it by finding 100% certainty in the markets. They don't need that. They just need an edge and psychological preparation to trade the markets.

As far as coin flips one can do worse and still get rich. Coin flips have nothing to do with the markets.
 
Laissez Faire said:
No, unless you're lucky.



The market is closed tomorrow. I can tell you that with 100% certainty. :)
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ROFLMAO ...you market wizard...you too sharp...have a great weekend.

Me thinks Bama will beat Clemson and Oklahoma might beat Ga but so much uncertainty....but probable.
 
Laissez Faire said:
When I hear 'chart reading', I'm immediately thinking subjective
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What you say is true!
Does it have to be though? I mean does one have to look at a chart subjectively?
There is a direct link between profitability and being objective.
The issue is is that subjectivity comes naturally and it's easy. Objectivity isn't.

Here are some questions that are driven by subjective thinking:
Q1. What is the best setting on MACD for scalping 5 min charts?
Q2. What is the best chart time frame to use for trading macro trends?
Q3. Would I get better results using Gann or Fibonacci for entries?
Q4. Is a weighted moving average better or a simple moving average?
Q5. I'm day trading. What chart is likely to give me a more reliable signal, a range chart or a tick chart?

Here are some questions that are driven by objective thinking:
Q1. If I determine that 'X' is relevant, is the market also concerned with 'X'?
(What evidence do I have of this?)
Q2. I have a system to trade and on a back test over 10 years it is profitable. What market conditions would cause it to fail?
(If back testing a system cannot guarantee future performance, what is the point of back testing it in the first place? If I cannot know under what conditions the system will break down, then should I really be trading the system? I will make money because my system takes advantage of what?).
Q3. Would it be wise to change markets after a poor stretch in performance?
(Would it be okay to switch to crude oil after a rough patch in soya bean futures? Why would it be okay? When would it be okay?)
Q4. Does a simple moving average indicate trend better than price itself?
(If it does, what setting is the best? Why is that setting the best? Will it change in the future and under what conditions? A moving average smooths price, but what if by 'smoothing' I have eliminating even more crucial trend evidence?)
Q5. Could I assess trend change more effectively without a chart?
(If a chart displays a trend, then what is the driving force behind the graphic? Is it just one force or various forces? Cyclical? Seasonal?)

Subjectivity is tainted. Down the rabbit hole you go! You are not the captain, you are the deck hand.

Objectivity means questioning everything!
You throw away what you think you know and what you've been told.
 
If you want to change your experience of the markets from fearful to confident, if you want to change your results from an erratic equity curve to a steadily rising one, the first step is to embrace the responsibility and stop expecting the market to give you anything or do anything for you. If you resolve from this point forward to do it all yourself, the market can no longer be your opponent. If you stop fighting the market, which in effect means you stop fighting yourself, you'll be amazed at how quickly you will recognize exactly what you need to learn, and how quickly you will learn it. Taking responsibility is the cornerstone of a winning attitude.

–Mark Douglas
 
lcranston said:
If you want to change your experience of the markets from fearful to confident, if you want to change your results from an erratic equity curve to a steadily rising one, the first step is to embrace the responsibility and stop expecting the market to give you anything or do anything for you. If you resolve from this point forward to do it all yourself, the market can no longer be your opponent. If you stop fighting the market, which in effect means you stop fighting yourself, you'll be amazed at how quickly you will recognize exactly what you need to learn, and how quickly you will learn it. Taking responsibility is the cornerstone of a winning attitude.

–Mark Douglas
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Douglas never made a dime trading :)
 
I think a laissez faire approach to the market is probally best. Just let it runs its course (of course it is going to whether you let it or not) and dance with it. You don't know what moves (patterns) it will make as it goes up or down. But one thing is CERTAIN it will go up or down or stay the same. We cannot create the dance floor (context) nor can we create the dance steps. But we can follow them and anticipate them. The dances are subjective. No two are exactly alike.

Yep laissez faire is the best approach IMO. The autocratic approach trys to make the market do what it wants it to do. To be what it wants it to be. To dance the way it wants it to dance. However, it is too much of a rebel to be hemmed in by rules. However, we CAN hem ourselves in with rules. For some I suppose that that makes the uncertain more palatable.

I have two rules.

1) above all just try to do what the market is doing regardless of what I think it should do.

2) have a stoploss or other mechanism in place for when my interpretation of the dance is wrong

Hence i can and will change my mind in a second if i am dancing the wrong dance. I feel no need to let my trade "play out" if I discern I am dancing the wrong dance. I will shuffle my feet (get out even before SL is hit) and try to enter lockstep into the markets dance.

And of course the passion (vol) of a dance move can be useful in interpretating, especially for anticipation of the next move.......
 
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