Nah, you are good. Just don't be in a trade before big announcements unless you trade higher timeframes like hourly charts onwards.
My only edge is technical analysis
- Thread starter traider
- Start date
Nah, you are good. Just don't be in a trade before big announcements unless you trade higher timeframes like hourly charts onwards.
Again, do you know what and edge is and can you explain how the ubiquitous activity of staring at a chart gives you an advantage over other market participants?
I don't question whether you feel that you are good at looking at charts. I am sure you must be a world class chart-looker. Up there with the greats. What I am skeptical of is whether you staring at a chart translates into an edge you can use to generate alpha.
A stock falls 20percent. What do you do?
That's not quite was I was saying (maybe re-read my prior post). In simplicity, my point was that given the same information and resources in any area of life, there are some who will outperform.
As such, I don't agree with the argument that you can't outperform even if you use the same information as everyone else. For example, the average retail trader is typically lacking both in experience and knowledge. Spend 10K of hours studying/trading/testing and maybe it would be a different outcome.
Now, is interpretation of a naked chart sufficient to make good trading decisions? That's a different discussion. Maybe it is. Maybe not. But there is no doubt that price is patterned and if you can recognize that in advance or as it's happening, you can profit. By patterned, I don't necessarily refer to charting patterns (which I personally don't use). Most newbies also seem to get sucked in towards trading shorter timeframes which arguably are (more) random and noisy - especially on index futures which is my focus.
remember when theMickey said that a person looking for the risk free rate should invest in the qqq instead?
The SAVANT edge,
If all information is priced in then you can't use that to predict the future, it is all priced in.
The market is always trying to price in all available information but it is almost always pricing it in wrong.
So many ideas about the market seem to be highly influenced still by cold war mythology. The market it always right and the command economy is always wrong. I suspect in reality it is that the market is marginally less wrong than the command economy but it is still mostly wrong.
There are enormous time and information lags in all of human conduct.
When you add money to the equation it doesn't make everyone more rational. It makes some more rational and some incredibly irrational.
The market is always trying to price in all available information but it is almost always pricing it in wrong.
So many ideas about the market seem to be highly influenced still by cold war mythology. The market it always right and the command economy is always wrong. I suspect in reality it is that the market is marginally less wrong than the command economy but it is still mostly wrong.
There are enormous time and information lags in all of human conduct.
When you add money to the equation it doesn't make everyone more rational. It makes some more rational and some incredibly irrational.
If you're a retail trader, it's enough. There is no right or wrong in trading. If there is anything you can do moving forward, it's optimization and automation. Suggestion can only be given if you share more details like instruments and the basis of your methodology.
Anyway, what is you expectancy per trade to average risk per trade ratio? How long have you backtested? Does your methodology work only on specific market regime (your methodology able to identify different market regime) or it works in any market regime?
To find those opportunities where there is a lag because of human conduct you need some method to determine that. It obviously can’t be price action alone. A stock can rally for two reasons: humans are dumb and mis interpreted some new information or humans are dumb and under appreciated the new information.