Let me end with this as I prefer to actually be scientific & falsifiable with my approach(something speculators clearly ignore). If you feel ANYTHING based on charts(like higher highs, lower lows, etc) is more probable than not, simply code a bot on that setup and collect your millions. When that doesn't work, I would implore you to try reason, with strategies that are falsifiable.
One of the Best Trading Tips I ever Got
- Thread starter bone
- Start date
Falsifiability is the capacity for some proposition, statement, theory or hypothesis to be proven wrong. That capacity is an essential component of the scientific method and hypothesis testing. In a scientific context, falsifiability is sometimes considered synonymous with testability.
Trading is........
1. Setup good odds on profiting, good R:R ( Everyone focuses on this )
2. Doing the right thing after the entry, so if trend changes walking away small profit/loss.
3. Never letting 1 trade get personal and letting it run away and hurt you.
4. knowing when to take thy profit, too early is not enough and too late it'll al vanish in seconds!
5 . Remembering every trade is a educated guess at best, go with the flow or die!!
1. Setup good odds on profiting, good R:R ( Everyone focuses on this )
2. Doing the right thing after the entry, so if trend changes walking away small profit/loss.
3. Never letting 1 trade get personal and letting it run away and hurt you.
4. knowing when to take thy profit, too early is not enough and too late it'll al vanish in seconds!
5 . Remembering every trade is a educated guess at best, go with the flow or die!!
I never wanted to imply that you can somehow predict the next card. In fact, I wanted to relay the opposite:
When I see an opportunity to take a reasonable risk with a relatively low probability of failure I will take it. If you offered me 60/40 on a stock going up I'd take it as long as the price was right for me. This is no different in poker when you're playing with suited high card one gappers in position and someone out of position raises. You may want to 3bet because you're getting great odds for that play. If you lose the hand, you're happy because you played optimally. Not because you lost. The whole point of risk management stems from poker - if you blow your roll in 2-3 hands you can't let the law of averages play in your favor.
The lessons I learned from poker are primarily thinking in probabilities and risk management. I don't want to come off like I learned to will the cards from the ether or anything.
To my point above, it wouldn't matter. If I have quantified I have a 57% chance of the next point being up if it was up both sessions back, and the price is right (meaning I can cap my risk within my risk tolerances) then I am playing optimally by betting on it. If I have a bankroll capable of making 100 of these plays I have a reasonable chance of being right - and those are the ones you are letting run. Cut your losses as soon as you know you're a goner.
I don't really believe in technical analysis. Fundamental analysis has some predictive factors, but TA is really only useful for getting an idea of supply and demand. Anything else is again, tea leaf reading. You're playing against the rest of the market - not the stock itself.
Saved my life:
Van Tharp " we trade our BELIEFS in the market" I'm never disappointed as I know my estimation is not fact or truth. I rarely lose these days....... what iceberg?
Van Tharp " we trade our BELIEFS in the market" I'm never disappointed as I know my estimation is not fact or truth. I rarely lose these days....... what iceberg?
I'm pretty sure that HHs/HLs doesn't make up the entirety of anyone's strategy. My assumption is that's just one rule of many that he uses to give him an underlying bias, filter potential setups and increase his probability of a successful trade. Might even be based on his own experience rather than rigorous stats.
Just one random analogy:
“The 10 day exponential moving average (EMA) is my favorite indicator to determine the major trend. I call this “red light, green light” because it is imperative in trading to remain on the correct side of a moving average to give yourself the best probability of success. When you are trading above the 10 day, you have the green light, the market is in positive mode and you should be thinking buy. Conversely, trading below the average is a red light. The market is in a negative mode and you should be thinking sell.” – Marty Schwartz
Think we'd all safely assume that Schwart's strategy didn't consist solely of buying a stock as soon as it got above the 10dema, and selling when it went below.
Or am I misunderstanding your argument?
I can appreciate your point and agree, though that is not how the other poster, I referred to, laid it out.
True.
I put out HH/HL’s and LL/LH’s out there because it has really held up well over the years and from my experience it has withstood the test of time. It is by no means a “holy grail” (no such thing) but I consider it to be one of the better trading concepts I’ve come across.
In terms of my own trading and my client work - I use a custom indicator package that I’ve developed and refined over many years which I designed for Spread Trading. In addition to the indicator - FOUR conditions (rules based) have to be satisfied before taking a trade entry.
What does it do? Does it indicate which spreads to watch for possible entry?