Proof that technicals/ charts work-- SINA

I enjoyed PB book and he is a professional trading many different makets/assets.
The OP just posted a stock. Stocks in the SP500 breaking range to the upside has been better than a 50% bet for all but very breif, intense periods for the last 5 or so years.
That doesnt mean I can play that game well but, it is a fact isnt it?
So , say it isnt so.
 
Read my post and it sounds a little wise ass so...

Brandt , as i remember , used a last day rule. His stop was at the low of the day prior
to the breakout. If the breakout day was a wide range bar he would us a "last hour" stop..
His stops were tight and his targets measured.

Darvas, the breakout king was extreme with his stops and i wouldnt be surprised if his winning percentage was ten percent. I think he had some great luck too with errors and ingoring rules and not being carried out on a stretcher.

O'neil of IBD has had a breakout system for years that out performs with market trend
And under performs without trend.

All i was saying is we have had a 5 year bull market in stocks and a correlated beta beast
can be synthesized in a hundred ways with that trend. 50% may be considered high
but relax the stops , shorten the holding period and most importatly comsider breakouts
From ranges in down sloping channels/retracements rather than just X week high.
Strong signal over the last 5 years but the noise is indeed a killer. Weekly charts help with that.

Trading/executing is another matter. I figured id just throw out more generalities counter to the could breakout up/down , 50/50 comments.
 
One can also look at other context for stocks. As noted, has the market been bullish then a breakout to the upside has a higher probability to work. Also, was the break out caused by a good earnings report. If so then fund managers are adding to their positions in the stock and helping to create a bullish trend.

One also can look at the short %. Was the stock heavily shorted going into earnings and was this a surprise profit that will cause the shorts to slowly close out their positions as their stops are being hit.

With futures and Forex, you need to relieve more strongly on TA and trade smaller time frames. With the stock, you could do a longer term swing trade and hedge with options.
 
Huh? This DOES teach a lesson though since he concluded by saying he's not a very good range trader. His own fault, of course.

Quote from Rodney King:

http://peterlbrandt.com/has-chart-trading-become-unreliable/

<i>

There is one other dimension to this. In the “good olde days,” when a chart pattern failed it told me something important about the market. Now, patterns just fail and provide no lessons. I have never been a very good “range” trader.

</i>
More...
 
Quote from eurusdzn:


Brandt , as i remember , used a last day rule. His stop was at the low of the day prior
to the breakout. If the breakout day was a wide range bar he would us a "last hour" stop..
His stops were tight and his targets measured.
More...

Last day rule stop is just the low of the actual breakout day. He also now tends to wait til the close to actually initiate the position, instead of just at the breakout levels.
 
Quote from NY_HOOD:

First off Bob, only a prick would answer a post the way you did. You have got to be kidding. But thats your problem.

I specifically said i didnt buy the stock. What i said was this was a text book example of how technicals work and was meant for guys new to the game that arent that familiar as to why we look at charts.
Did i hurt your feelings?
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Ahh, the flaming is already whirling by the third post.

I laughed out loud when I saw this horrible troll thread, and how it had 6 pages. Only on Elite Trader would it be this easy to troll everyone. The funny part is that NY HOOD is probably serious, and not trolling.

I admit, I've said stupid things before, but at least my friends know I'm a real trader. Fortunately there are also lots of "real" ones on Elite Trader too. You have got to love baron for making this site as libertarian as trading is. :cool:
 
Absolutely, if a trader knows how to properly use Technical Analysis to find low risk, high probability and high reward trading setups, a lot of money can be made over time. The only problem is, most traders don't know how to properly read a price chart. For my trading, I use price charts and nothing else. No indicators, no news/fundamentals, no oscillators, no Cramer, none of that, just strictly price charts. Regardless of the news, technicals are what drive the market, news just makes it happen faster.
 
Quote from PMVision:....The only problem is, most traders don't know how to properly read a price chart. For my trading, I use price charts and nothing else. No indicators, no news/fundamentals, no oscillators, no Cramer, none of that, just strictly price charts. Regardless of the news, technicals are what drive the market....
More...

I remember Surf saying something along the lines that this type of trading was pure 100% destined to fail.
 
Quote from NY_HOOD:

this was a text book example of how technicals work and was meant for guys new to the game that arent that familiar as to why we look at charts.
More...

well, Bob, if you take a close look at these words he actually didn't say anything..:)
 
I chuckle at the back and forth;

TA works…. TA doesn’t work….TA works till it doesn’t (admittedly I’m guilty of saying this more than once – and I was full of shit saying it)

Fact is; Mkt is uncertain

So how the hell can anyone reasonably expect anything to have the ability to predict/ project / prognosticate / forecast / whatever – a future move/ event – with any modicum of reliability – in an uncertain environment

That’s just crazy…, or is it….

==========================

I would suggest this;

TA will work 100% of the time – once you revamp your expectation(s) accordingly

It does two things consistently – three, if you wish to include the ability to show what already happened

And where there’s consistency, there is an exploitable edge

===========================


We are all way too familiar with how insanity is defined;

Do the same thing over and over, while expecting…..

There is however a second, lesser used definition of insanity

To ignore reality..., to attempt to redefine reality

My point;

Accept how the mkt works…, then build your beliefs accordingly

Never try to shape / carve the mkt into what you believe – this is simply not sustainable over the long haul

TA, and whether one perceives it works…, marginally works…, or never works – is a classic example of this

===========================

Things that make you go – Hmmmmm (at least me anyway)


Btw, I love the TA…, always have

Great Weekend All
RN
 
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