Sounds like you have some wisdom you are forgetting to share so I will ask you to elaborate on what you have learned!
Let's talk about eliminating noise in the charts
- Thread starter nooby_mcnoob
- Start date
Sounds like you have some wisdom you are forgetting to share so I will ask you to elaborate on what you have learned!
The answer is you can't. And the reason is because you will never know whether what you eliminated is noise or a legit part of a trend because nobody knows the future. No TA is precise enough; it can give you a clue but it's never 100% correct all the time. If it is, everybody will be walking trillionaires. Nobody will be working. It won't be the Great Resignation. It would be the Permanent and Complete Retirement. LOL
From hindsight looking back, you can always see it clearly what was noise and what was actually the start of a new trend but when you were right there at the moment trading, you could never know. That tiny little ebb or speck that you see could be noise but it could very well be a start of a reversal for a new trend. If you treated it as noise when it was really a start of a new trend then you end up with a loss because you stop-lossed and reversed too late. But if you treated it as reversal when in fact it was really some random noise, then you end up reversing a perfectly good trend for nothing and cutting your profit short or suffering a loss still.
There is no hard and fast rule for determining noise from a chart. The only most effective way that I find is through hedging. That way when you are wrong, you are protected. When you are right, you only give up a little bit of profit and you still end up with the majority of the windfall.
As noted in Brooks price action a barb wire formation is not tradable, just go trade later or another day.
As for smoothing out price action, there is an indicator that does that in that candles will respect the the line which is not straight which is created on the chart by that indicator, no I will not tell what it is. If the candles are not respecting the line or they break through this line, then get out or reverse.
TA works but the problem especially for us that don't full time trade is to remember all of our rules before we get into a trade. Also, if you take 2 bad trades in a row, then maybe stop for awhile and then look back at the chart for a new perspective or you can just stop trading for the day if you hit your maximum stop loss amount.
Finally, it never hurts to take a "limitless" pill, there are new stuff coming out all the time, so I keep trying the new ones to help with memory and sharpness.
As for smoothing out price action, there is an indicator that does that in that candles will respect the the line which is not straight which is created on the chart by that indicator, no I will not tell what it is. If the candles are not respecting the line or they break through this line, then get out or reverse.
TA works but the problem especially for us that don't full time trade is to remember all of our rules before we get into a trade. Also, if you take 2 bad trades in a row, then maybe stop for awhile and then look back at the chart for a new perspective or you can just stop trading for the day if you hit your maximum stop loss amount.
Finally, it never hurts to take a "limitless" pill, there are new stuff coming out all the time, so I keep trying the new ones to help with memory and sharpness.
It is impossible to eliminate something that doesn’t exist. There is no distortion of the underlying trend. It is what it is. For instance, PB’s are not distortions of an existing bull trend. They are profit taking by bulls and/or reversal attempts by bears to make the bull trend fail. There is no noise about it. There is nothing to eliminate. It is what it is. As far as trading is concerned it is more useful to eliminate the “concept” of noise existing in the markets.
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Yeah of course. But same could be said about not going down for hours.
That is a pretty large range if one was waiting for a breakout out the top as an entry point.
"Zero" lag.
I'm not convinced there is anything in our price charts that deserves to be called noise and airbrushed out. All price action shows something, even if it is simply that nothing big has been happening. But that can be useful to know too.
All price action also suggests changes in the probability of subsequent immediate price action: its useful to know what are less probably the next price moves as well as which are more probable.
All price action also suggests changes in the probability of subsequent immediate price action: its useful to know what are less probably the next price moves as well as which are more probable.