Principia de Technical Analysis

Quote from rlb21079:

To what can we attribute the seemingly random though intuitively non-random movements of the market?

...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?

...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...
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Hmmm,

Interesting topic.

I think every trade, every trade signal, every technical analysis event has a story behind it....

if a trader can know the story that leads to a trade, trade signal or TA event...

that trader is more prepared to exploit the situation.

Simply...your not at a disadvantage when knowing the psychology behind your trades...

in fact...you'll learn more and increase the odds of being better prepared the next time.

Here's an example of what I mean by every trade, every trade signal or every technical analysis event has a story behind it...

http://www.elitetrader.com/vb/showthread.php?s=&threadid=14288&perpage=1&pagenumber=16

Also, I think its either impossible or too difficult in trying to develop a system (as you called it) to ponder the causes of market movement.

Such would be too subjective and interpreted differently from one trader to the next.

P.S. Sometimes the story may not make sense to us...may not seem logical...but there is a story and I like to trade what I think I understand.

If I trade when I'm confused...that's when losses occurs or that's when I'm on the sidelines asking a lot of questions.

Good night all.

NihabaAshi
 
Quote from rlb21079:



Livermore I know from Reminiscences and the other "real" biography, the latter of which I thought was poor.

Would you care to share your thoughts on Wyckoff, Neill, Dunnigan, and/or Magee? I could read them too but maybe your condensed version might save some time.
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My condensed version would save some time, but would do you little or no good compared to what you would gain by studying them yourself. These men determined that markets moved as a result of human emotion, and some of them codified their findings into trading strategies.

Also of interest are current works in Behavioral Finance.

When it comes to learning how to trade, I wish it were possible to "save time". Unfortunately, I have not yet figured out how to do that (see signature).

--Db
 
Quote from NihabaAshi:

if a trader can know the story that leads to a trade, trade signal or TA event...

that trader is more prepared to exploit the situation.
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Not really. The event is irrelevant. What moves the market is traders' reaction to the event.

--Db
 
awww c'mon db & surf give us the "condensed version" will ya i just don't have the time or inclination to read 'em what with seinfeld reruns and THE GAME on.
 
NihabaAshi & dbphoenix,

I read the thread you pointed to and found it interesting. In this instance it seems the market was news driven. This may be a starting point for what I desire.

Principle I: Short-term traders are reactionary. Their reactions depend either on advanced information or a sensitivity to price movement which itself is a result of those with advanced information.

 
Quote from LongShot:

awww c'mon db & surf give us the "condensed version" will ya i just don't have the time or inclination to read 'em what with seinfeld reruns and THE GAME on.
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Sorry, no TV. I run a business, am preparing for the LSAT, work a "full-time" job, manage two rental properties, and trade stocks.
Oh, and I read and play poker for fun (among other activities not to be mentioned here).
 
I have selected my words poorly. My motive for condensed trading philosophy is this: when I exert individual effort to creating a theory before reading the theories of others my otherwise poor memory works much better. In other words I am using you all - in a good way though, right?
 
Quote from rlb21079:

I have selected my words poorly. My motive for condensed trading philosophy is this: when I exert individual effort to creating a theory before reading the theories of others my otherwise poor memory works much better. In other words I am using you all - in a good way though, right?
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my condensed trading philosophy---


"price is the only truth/reality of the market"
 
Quote from marketsurfer:

"price is the only truth/reality of the market"
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More condensed than this and you have silence. Which if you're into the Eastern religions may be an optimal way to trade.

Under a bo tree one will find Nirvana... or Amazon at $6:p
 
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