It seems all the pros use Price Analysis and Noobies use Technical Indicators
- Thread starter sneakoner
- Start date
I would love to use an indicator that gave me green and red lights to make money.
Unfortunately I never found one.
FoN
Unfortunately I never found one.
FoN
The problem is this: Keynes once observed that long-term investing is all about the fundamentals, whereas short-term trading is about investor psychology.
This was almost true: long-term trading is about investor psychology too, to some extent.
What happens is this: if something's been going up for a long time and people have gained confidence in investing in that something, trend following methods will work because people will lengthen their time horizons.
If, on the other hand, something is chopping or going down, people will radically shorten their time horizons and trade in and out, if they're in it at all. Hence sideways and down markets don't respond to trend following.
So, what you need is:
1. A trend following something.
2. An extremely accurate measure of short-term momentum (hint: think about Wilder's RSI. Think some more. Remembering that he traded commodity markets with limit up/downs, what exactly was he trying to get at that he needed this for a limit up/down market, which stocks and fx aren't? Answer that, and you will be on your way to coming up with an extremely accurate momentum indicator that responds as quickly as an indicator can given its only input is past data).
3. A way of figuring out investor confidence: are investors confident enough that they're willing to lengthen their time horizons or not? This, and I state this categorically because it took me years of investigation and a lot of perspiration, is The Holy Grail. It really is. You will need reams of data, a logical mind, some math, and a second pair of eyes to check that you're not sending yourself off on some fantasy. It's probably the toughest thing on the planet to figure out.
One and two are tactics, and therefore will get you somewhere but not very far.
Three is strategy. Master the strategy, and the tactics will fall out by themselves.
This was almost true: long-term trading is about investor psychology too, to some extent.
What happens is this: if something's been going up for a long time and people have gained confidence in investing in that something, trend following methods will work because people will lengthen their time horizons.
If, on the other hand, something is chopping or going down, people will radically shorten their time horizons and trade in and out, if they're in it at all. Hence sideways and down markets don't respond to trend following.
So, what you need is:
1. A trend following something.
2. An extremely accurate measure of short-term momentum (hint: think about Wilder's RSI. Think some more. Remembering that he traded commodity markets with limit up/downs, what exactly was he trying to get at that he needed this for a limit up/down market, which stocks and fx aren't? Answer that, and you will be on your way to coming up with an extremely accurate momentum indicator that responds as quickly as an indicator can given its only input is past data).
3. A way of figuring out investor confidence: are investors confident enough that they're willing to lengthen their time horizons or not? This, and I state this categorically because it took me years of investigation and a lot of perspiration, is The Holy Grail. It really is. You will need reams of data, a logical mind, some math, and a second pair of eyes to check that you're not sending yourself off on some fantasy. It's probably the toughest thing on the planet to figure out.
One and two are tactics, and therefore will get you somewhere but not very far.
Three is strategy. Master the strategy, and the tactics will fall out by themselves.
Full time Nuclear Engineer during the days, leased a Full Membership and traded in the Bond and Note Pits during the evening CBOT Pit Session in the very early 90's. Also was one of the first electronic Project A traders. Started out with $10K and cleared TransMarket Group. Learned to spread trade and was one of the original guys to start up the ComEd/Exelon Energy Trading Desk. Traded all kinds of interest rates, energy, OTC swaps options futures cash physical you name it. Private equity pools, prop, my own account, HF.
There's more money to be had trading retail than there is grasping for $6000 straws to re-fill your depleted account like you do. Unlike you I actually have capital to trade because I'm actually profitable. Whereas you claim to be profitable, but when anyone asks to see the records you clam up.
You and your moronic clients deserve each other
It's unfortunate that the training/education side of trading has so many bad players. Understandably, it triggers a reflex that makes you suspicious of everyone. But to be fair, you must resist/manage that reflex and not sling mud unless you have facts to back up your attacks.
I'm not a client of bone and I have never met him. But I have read many of his posts and I have benefited from his contributions to this forum. I cannot say the same for many other ET sponsors who use this board for little more than advertising.
It's no problem that he's an ET sponsor who markets his services here. Every business field has successful people who provide consulting services. If an ET sponsor can add value to ET with educational posts while marketing their services, that's a win for all of us.
I just wanted to offer some defense on bone's behalf, as I would for anyone I saw being treated unfairly.