Principia de Technical Analysis

[dbphoenix]

Quote from marketsurfer:




proper format is the key.

best,

surfer

You may be right, but I haven't seen any evidence to support that idea.

--Db

 

[rlb21079]

Quote from dbphoenix:


I did not say that one must "trade for many years" before turning a consistent profit. What I said was that many (or most) of those who took a mechanical approach end up with no more understanding of price action than when they started.--Db

Two questions:

(1) What understanding of price action does one gain from a non-mechanical approach and how?

(2) Would this understanding not aid an individual in developing a mechanical approach to trading?

p.s. I concur with your conclusion wholeheartedly that a mechanical approach will, at the very least, tend not to yield any understanding of market movements.

 

[rlb21079]

Quote from marketsurfer:


proper format is the key.

Is proper format known 'a priori' or 'a posteriori'?

 

[dbphoenix]

Quote from rlb21079:



Two questions:

(1) What understanding of price action does one gain from a non-mechanical approach and how?

(2) Would this understanding not aid an individual in developing a mechanical approach to trading?

p.s. I concur with your conclusion wholeheartedly that a mechanical approach will, at the very least, tend not to yield any understanding of market movements.

As to your first question, that's what a study of the books I suggested and the literature in Behavioral Finance will tell you. I can't reduce all that to a message board post, but someone else is welcome to try.

As to your second question, it might, but I don't see the relevance. A mechanical trader doesn't care about "why". In fact, it is this self-questioning that prevents mechanical traders from following their systems.

You seem to be asking whether a discretionary or mechanical approach will yield the greater results. There's no way to answer this. Your task is to decide to which approach you are more psychologically suited. If you are in constant battle with whatever approach you take, you will fail.

--Db

 

[nkhoi]

Quote from candletrader:

Cool link![url] http://www.elitetrader.com/vb/member2.php?s=&action=addlist&userlist=ignore&userid=16132

neat trick but it take away my choice therefor unappreciated.

 

[rlb21079]

Thankyou DB for your assistance, I'll be leaving Elite Trader shortly to begin my self-matriculation.

 

[harrytrader]

Finance is attarded ! In Statistical Quality Control the question would be the inverse !!!!!!!! RANDOMNESS is a VERY DIFFICULT STATE TO ACHIEVE hihi ! Take any SPC software and it will cry with so many alerts of non randomness that it seems a farce when you hear that kind of question in Finance ! As Deming, the statistician and Quality Guru said, it will take 50 years before the philosophy and not just the calculation of variation is largely understood in every field.

P.S.: I'm back but not for long, but I posted this so as to be sure that you're not missing me hihi !

Quote from rlb21079:

To what can we attribute the seemingly random though intuitively non-random movements of the market? Bloomberg radio/TV supposes that the market is news driven, and furthermore based on the collective forward-looking opinions of all investors. Pure fundamental anlaysis (if there is such a thing) assumes earnings are the sole mover of markets. For Elite Traders, certainly too savy a bunch to accept either of the aforementioned, seem not to care. Technical analysis does not utilize a causal approach. Rather, it seems, it is based on the developement of a system which captures the result of market movement without knowing its cause. Would it not be useful in developing such a system to ponder the causes of market movement?

Certainly capital dynamics, as in the distribution of capital to potential investors, play a role. The method of capital input too would come into play.

Admittedly, my ideas on this matter are less than cohesive, but as any trader must be, I am interested in expanding my understanding of the market. What I propose here is a ground-up logical approach to understanding the behaviour of men and women when faced with investing/trading opportunities.

Accedere dialecticus...

 

[jack hershey]

Quote from rlb21079:


Thankyou DB for your assistance, I'll be leaving Elite Trader shortly to begin my self-matriculation.

I think you did really well at the topic you initiated.

I'm looking for some completed logs that might appeal to you as a completed short version of this stuff. I have the master but completed ones are very interesting because of the dynamic.

The strategic ploy for obsreved reaction hasn't been mentioned: it's anticipation based on empirical probablitity.

You made a neat progression with these guys as the bounding influence..

 

[jack hershey]

Quote from jack hershey:



I think you did really well at the topic you initiated.

I'm looking for some completed logs that might appeal to you as a completed short version of this stuff. I have the master but completed ones are very interesting because of the dynamic.

The strategic ploy for obsreved reaction hasn't been mentioned: it's anticipation based on empirical probablitity.

You made a neat progression with these guys as the bounding influence..

Here is a background chart

 

[jack hershey]

Quote from jack hershey:



Here is a background chart

Here is the hot list sheet for buying that day.

VRTS was peaking (see prior days) so it was not a buy.

TLC, NSIT LGTO and SCAI opened up but only NSIT made a volume past DU and it was after morning trading so it was not strong enough.

Nailing MFAC around 20 plus as volume rose before price moved is SOP. It's first day was about a 5% move.