Market's gotta be rigged

Quote from ProfitTakgFool:

Why traders gravitate to patterns/trends is beyond me. How do you know an ascending triangle won't turn into a bear wedge once it breaks out? Should you buy the move above resistance or sell the drop below support. Or should you sell resistance or buy support? So there you have 4 choices, or a 25% chance of winning. Now add the fact that the next tick is a simple flip of a coin and that reduces your odds of winning on a pattern to 12.5%, or .25 x .50.

So you say an ascending triangle is bullish because it's in an uptrend? How do you know that doesn't signal the end of the trend? Trends and patterns are just an illusion that suckers most into believing that technical analysis actually works. The market is nothing more than a random number generator. Most people will dismiss this theory because they believe randomness can't be traded. Oh yes it can. Don't believe what those college professors told you.
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You must use confluence to support the setup since naturally by themselves they are not so hot.

Combine the bigger picture with your intraday entry chart and this will greatly increase your accuracy. For instance a W reversal pattern just anywhere might not be a big deal but around trendline support or an important support area on the multi day charts is a whole different story.

On top of that you can use price action to look for low risk entries to futher increase your efficiency by using great risk vs reward.

Frankly when skepticism like this is posted in the forums it is very telling on the trader.

Rewind a bit, trend and patterns do work, but it must be done correctly and that's what causes all these negative comments, the failure to realize that I'm not the center of the universe and just because you could not get it all working does not mean the whole concept is invalid.

Anek
 
Quote from ProfitTakgFool:

Most people will dismiss this theory because they believe randomness can't be traded. Oh yes it can. Don't believe what those college professors told you.
More...

PFT,

Since I believe that shorter term movements can be non-random (okay, okay, I also believe that longer term movements can be non-random), I would be very curious to know - if you believe that all market movement is random, how do you decide when to enter a trade? If market movements were truly random, you could enter using a random number generator - go long on an even number and short on an odd number. Is that how you enter the markets?

Not a flame at all, I am actually very curious. I am absolutely not asking for your system or your hard-earned knowledge, just for a general description if it's possible... but I fail to see how there could be any systemic entry if you believe the markets are truly random in all time frames.
 
He actually does have a system, and he has posted charts with his entries.

You'd have to do a search to find them, but he believes in what he's saying, and it seems to be working for him, so more power to him.

I personally find it to be absolutely amazing ... the number of ways that the mind can figure-out how to trade the markets profitably.

Where many see chaos, a few see order.

I
 
Quote from Icarus5:

He actually does have a system, and he has posted charts with his entries.

You'd have to do a search to find them, but he believes in what he's saying, and it seems to be working for him, so more power to him.

I personally find it to be absolutely amazing ... the number of ways that the mind can figure-out how to trade the markets profitably.

Where many see chaos, a few see order.

I
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I know he does but it's obvious he could not get trend and patterns to work for him because of the way he criticizes the methodology.

Anek
 
Quote from Icarus5:

He actually does have a system, and he has posted charts with his entries.

You'd have to do a search to find them, but he believes in what he's saying, and it seems to be working for him, so more power to him.
More...

Okay, thanks Icarus.


PFT, if you read this and you have a specific link for me, I would appreciate it. I'll wait a day and then maybe I'll try to wade through some of your old posts and see if I can find your entries. Even if you can tell me which thread, it would be great.

Anek... I know how you feel, and I always tend to jump to the conclusion that if someone is running down a particular method, it's because he tried it and failed at it. Maybe you know something about PFT in particular, but I actually believe that if someone had either been taught or believed from Day 1 that the markets were random and that trend meant nothing, he could develop a winning system based on something else and might never have failed at trading a system that involved assumptions about trend.
 
Quote from ProfitTakgFool:

Why traders gravitate to patterns/trends is beyond me. How do you know an ascending triangle won't turn into a bear wedge once it breaks out? Should you buy the move above resistance or sell the drop below support. Or should you sell resistance or buy support? So there you have 4 choices, or a 25% chance of winning. Now add the fact that the next tick is a simple flip of a coin and that reduces your odds of winning on a pattern to 12.5%, or .25 x .50.

So you say an ascending triangle is bullish because it's in an uptrend? How do you know that doesn't signal the end of the trend? Trends and patterns are just an illusion that suckers most into believing that technical analysis actually works. The market is nothing more than a random number generator. Most people will dismiss this theory because they believe randomness can't be traded. Oh yes it can. Don't believe what those college professors told you.
More...

Hasn't it pretty much been proven (e.g. Tharp) that with proper position sizing and money management, flipping a coin on entry, cutting your losses at about 8% and letting your winners ride beats most systems?
 
"Year end window dressing. Remember, this is the last day to trade for 3 day settlement of shares in 2007."


I believe it is the sale date not the settlement date that governs. IRS Rev. Rul. 66-97, 1966-1 C.B. 190 , states that both stocks and bonds are considered acquired or sold on the respective trade dates.
 
I don't think all of the markets movement is random, just a large percentage. Randomness can be exploited using statistics and proper portfolio management.

A quick synopsis of my strategy....I fade what I believe are extreme, non-sustainable price movements. As I'm sure you know, an extreme movement can easily go more extreme so I don't have to peg the trade with 1 trigger. I can build a position on fluctuations around that extreme area, provided the drawdown is within my risk tolerance. If I can catch a move as small as a correction I can generate a profit on a partial and see what happens on balance.

My strategy works very well with futures because of the leverage. I don't need a large move to make decent money. It doesn't work as well in the stock market.



Quote from powerfade:

PFT,

Since I believe that shorter term movements can be non-random (okay, okay, I also believe that longer term movements can be non-random), I would be very curious to know - if you believe that all market movement is random, how do you decide when to enter a trade? If market movements were truly random, you could enter using a random number generator - go long on an even number and short on an odd number. Is that how you enter the markets?

Not a flame at all, I am actually very curious. I am absolutely not asking for your system or your hard-earned knowledge, just for a general description if it's possible... but I fail to see how there could be any systemic entry if you believe the markets are truly random in all time frames.
More...
 
Personally, I have never met a profitable pattern trader. I've seen people make money trading patterns but then conditions change and patterns no longer work. There are so many things that can happen when the price moves from a consolidation area. It can false break up, then false break down, come back into the pattern and tag your stop, go more sideways, etc.....

I'm not suggesting it can't be done. My opinion of trading: Anything can be done, it depends on the trader. But, I've never actually met anyone who can <i>consistently</i> make money trading patterns. Just my experience.

Quote from Anekdoten:

You must use confluence to support the setup since naturally by themselves they are not so hot.

Combine the bigger picture with your intraday entry chart and this will greatly increase your accuracy. For instance a W reversal pattern just anywhere might not be a big deal but around trendline support or an important support area on the multi day charts is a whole different story.

On top of that you can use price action to look for low risk entries to futher increase your efficiency by using great risk vs reward.

Frankly when skepticism like this is posted in the forums it is very telling on the trader.

Rewind a bit, trend and patterns do work, but it must be done correctly and that's what causes all these negative comments, the failure to realize that I'm not the center of the universe and just because you could not get it all working does not mean the whole concept is invalid.

Anek
More...
 
Here's the link where I've been posting trades if anyone is interested.

http://www.elitetrader.com/vb/showthread.php?threadid=112126

You bring up a very good point here....

"I personally find it to be absolutely amazing ... the number of ways that the mind can figure-out how to trade the markets profitably."

I guess I should retract my earlier statement. I shouldn't say patterns can't be traded. It's been my experience that I can't make money with them and I've never seen anyone else either. But it wouldn't surprise me to see someone do it. There are many, many ways to make money, and even more ways to lose it.


Quote from Icarus5:

He actually does have a system, and he has posted charts with his entries.

You'd have to do a search to find them, but he believes in what he's saying, and it seems to be working for him, so more power to him.

I personally find it to be absolutely amazing ... the number of ways that the mind can figure-out how to trade the markets profitably.

Where many see chaos, a few see order.

I
More...
 
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