On the fundamentalism of PA traders

[ammo]

Quote from fearless9:

Smurf,

You bring up a very good point.
Catholicism is a faith ... trading is not.
"God moves in mysterious ways" may well prove to be the ultimate test of faith for many, but it will be the ruin of every Trader.

There is no faith in trading, just a fundamental understanding of what shifts price and how best to apply this knowledge to the Trader's advantage.

Broken into it's components, trading is quite straight forward.
I say "straight forward" rather than simple because the degree of simplicity is set by the Trader and not the market.

In a nutshell, trading is as simple as you care to make it and most people chose to make it complicated.














Only a fundamental knowledge of the markets will enable a Trader to skew the odds in his/her direction.

regards
f9

just as important is an understanding of your own weaknesses and how they afffect your trading, i.e. fear,greed, doubt ,overconfidence,impulsive trading ,laziness,overindulgence,committment...etc...

 

[fearless9]

Quote from ammo:

just as important is an understanding of your own weaknesses and how they afffect your trading, i.e. fear,greed, doubt ,overconfidence,impulsive trading ,laziness,overindulgence,committment...etc...

Interesting that you should point this out ammo.
In another time, in another age, this would not be necessary.

regards
f9

 

[AlpineTrout]

Quote from fearless9:

Care to share your thoughts on the use of Volume

regards
f9

Sure. If you just went long, and over the next two or three bars you see decreasing volume, post a sticky note on the screen that says "I'm probably on the wrong side of the market".

 

[Lucrum]

Quote from Anekdoten:

Of course there are many traders who trade successfully using lagging indicators what they fail to realize though is that they are not doing well because of whatever mathematical formulas their indicators are based on, it's them. The trader makes it happen.

Maybe it's because indicators offer a sense of security, a false sense of security no doubt.

I used indicators for many years, until I finally realized, hold it there chief, what am I doing, I see things happening multiple bars earlier by just examining price and fortunately that woke me up.

Nothing beats price, price is the absolute truth anything based on price is by definition slower and logically, inferior, but to some, at the present time, they might look superior due to their own chart reading disabilities, they haven't got it yet, they are price action disabled.

Now, it does take time to read price correctly, thousands of hours of screen time, and to do so at the speed price is plotted takes even more time, until that happens you will probably be at the mercy of something slower that accentuates what happened in the past and that's probably why most traders use indicators, again, even successful ones.

However, to say lagging indicators can enhance the trading of someone who can read price at the very same speed price is plotted is pure ignorance and even absurdity.

I think a trader is better off spending more time with price than creating bad habits that will eventually become nearly impossible to kick, even if it slows down your learning process, if you gonna do something do it right.

I've asked dozen of successful traders who use lagging indicators to show me how their indicators would improve the trading of a price action trader and no matter what they present it always ends with having zero value and a few laughs from my part.

Many times you will see a screenshot with a trader annotation saying, "see, see how it predicted the bottom" and once in a while this anomaly happens, consistently enough to offer an edge over price itself? Not a chance in hell.

I do use indicators but they are either manually inserted lines or enhancements of highs and lows to help me visualize when an actual high or low is plotted so I don't have to manually measure it or one that it was plotted in the past to assist my reaction in the present; and of course volume to examine supply and demand on those particular highs and lows. Definitely no lagging crap.

To conclude, if you are doing well using indicators, then that's great, doing well is definitely the goal here, but whenever you enter a trade or close it please realize that there are some out there who are getting better entries and better exits, not because they are better traders but because they took the time to learn from the source so they are getting a better "feed".

If you believe in magic, fairy tells, then lagging indicators are for you.

I honestly could not give a shit if others use indicators successfully, in fact, the slower they are the faster that makes me, and in trading speed is a luxury that I welcome with open arms.

Anek

What he said.

I often poo poo on indicators BUT have also conceded their are successful traders using them.

I just personally don't think they "need" them as much as they think they do.

Ultimately all I really care about is MY bottom line.

 

[fearless9]

Quote from AlpineTrout:

Sure. If you just went long, and over the next two or three bars you see decreasing volume, post a sticky note on the screen that says "I'm probably on the wrong side of the market".

Now there is food for thought AT.

regards
f9

 

[AlpineTrout]

Quote from AlpineTrout:

Sure. If you just went long, and over the next two or three bars you see decreasing volume, post a sticky note on the screen that says "I'm probably on the wrong side of the market".

But, if you're really good, and entered long sooner, you would EXPECT to see decreasing volume. See how fun this volume stuff is?

 

[Smurfie]

Quote from AlpineTrout:

Sure. If you just went long, and over the next two or three bars you see decreasing volume, post a sticky note on the screen that says "I'm probably on the wrong side of the market".

But, if you're really good, and entered long sooner, you would EXPECT to see decreasing volume. See how fun this volume stuff is?

Mmmmm ... huh?

 

[vingbel]

Hey Anek,

Have you moved back to time based bars rather than volume based bars? A combination thereof?

 

[Smurfie]

I found your post really interesting Fearless9. I've argued vehemently elsewhere that there's little reason to chase around after the Awesomest Oscillator Ever and you'd be better served by learning how basic indicators are constructed so you know what they will do and not do in various market conditions; basically so you can read them. I also think that's where the difference between PA and oscillator based approaches begin to disolve.

Smurf

 

[fearless9]

Smurfie,

Western lifestyle is deliberately constructed to give the middle class a sense of achievement, when in fact it has been the rising tide of credit which lifted the boats.
Now of course the plug has been pulled and individuals are moaning as their net worth disappears.

Whether traders use indicators is as individual as their choice of underwear or indeed the decision to wear any at all.

It is nobodies business except their own and of course their partners.

But people lose sight of the big picture (if indeed they every had it) which means they miss the details that matter completely and become absorbed in the trivia.

regards
f9