Markets: Are They Ever Changing or Do Proven Setups Last and Last.

[Swan Noir]

There seems to be two schools of thought among discretionary traders. The first being that there are times when setups have more consistency than others but that results really don't vary all that much say quarter to quarter (while they clearly do day to day and week to week) because they are a product of age old concepts of how supply and demand translate into price action.

The others contend that markets evolve and those that adapt are the long term winners. And I suspect there are other variations of these two themes. Comments please!!

 

[ammo]

Quote from Swan Noir:

There seems to be two schools of thought among discretionary traders. The first being that there are times when setups have more consistency than others but that results really don't vary all that much say quarter to quarter (while they clearly do day to day and week to week) because they are a product of age old concepts of how supply and demand translate into price action.

The others contend that markets evolve and those that adapt are the long term winners. And I suspect there are other variations of these two themes. Comments please!!

the business of disguising your hand as in poker always changes,the size and number of size players changes,the game of supply and demand has changed since ben came and started trading with the largest acct on the planet,the need to recognize buyers or sellers leading the market always stays the same

 

[Swan Noir]

Clearly there are changing elements but the question put forth is whether set ups hold up as other elements swirl around them. BTW ... my order size does not require a disguise ... lol.

Quote from ammo:

the business of disguising your hand as in poker always changes,the size and number of size players changes,the game of supply and demand has changed since ben came and started trading with the largest acct on the planet,the need to recognize buyers or sellers leading the market always stays the same

 

[Macho]

Ask me at the end of the year.

At the moment I have applied combinatorics to bonds/ES and I am very happy with my trading to date. It 'struck' me in math class.

I have a feeling it will stand the test of time,because there is a 'basic behavior' between the two.

 

[Zr1Trader]

"do proven setups last"

You are only looking at the setup. You need exit method, money management, trade management, daily stop or loss, chart setup, data feed, broker , commission costs, platform, execution, clearing costs, internet connection, discipline, stress management and a bunch of other factors to tell you if your particular "setup" lasts.

If I say yes a head and shoulders works 60% of the time. Then how would that help you without the context of all the other issues also?

Something might have a winrate of 60% at 1:1 after all of these factors are combined but who says "the setup" alone is to be due all of the credit for the method working?

 

[ammo]

Quote from Swan Noir:

Clearly there are changing elements but the question put forth is whether set ups hold up as other elements swirl around them. BTW ... my order size does not require a disguise ... lol.

a post above mentions head and shoulders,no,the negative setups, they don't work as well ,and yes the positive setups are working fine...just an opinion

 

[trefoil]

Down is faster than up. Down markets are therefore faster than up markets about changing their direction.
Most people get the first sentence pretty easily. That last sentence is what gets most folks caught. Takes some logical thought, and then takes experience and at least one blown account before you really get the truth behind it.
It's not that markets are evolving. It's that over the very long term they're always at some stage between going from down to up and then to down again. They generally only complete a couple of these cycles in a person's entire lifetime. You have to know where you are.

 

[Redneck]

SN,

I’ve found solid setups work (not 100% mind you, but consistently enough)

What changes, imo – is the duration, volatility, momentum, and frequency of price’s moves

Well that and it’s direction of course

RN

 

[dom993]

Quote from Swan Noir:

There seems to be two schools of thought among discretionary traders. The first being that there are times when setups have more consistency than others but that results really don't vary all that much say quarter to quarter (while they clearly do day to day and week to week) because they are a product of age old concepts of how supply and demand translate into price action.

The others contend that markets evolve and those that adapt are the long term winners. And I suspect there are other variations of these two themes. Comments please!!

Of course, markets see radical changes that affect them long-term ... the advent of electronic trading, the speed of information (& rumors) propagation through the internet, the globalization of the economy and of the trading industry itself to name a few - and I wouldn't let aside from this tentative list information technology aka computers & networks.

There are a few constants re. the game, though ... it was, is & will remain a negative sum game (aside from investing), which by design concentrate wealth in the (hands) accounts of the very best ... reaching & remaining at the top ... can this happen without constant improvements & innovation?

 

[NoDoji]

The mass psychology of large groups of people driven by ego and emotion has not changed in all of recorded history. This is why in a large and liquid auction market price produces certain footprints that cause a majority (even if only a slim majority) of market participants to react a certain way.

Study the market in the time frame you wish to trade, identify footprints that cause a majority of the herd to begin running more often than not and run with the herd when those footprints appear.