All so true. Continuing same direction, one of the most meaningless, yet so often repeated statements is something like: this indicator doesn't work, that study does. Indicator is indicator, it does exactly what its very name implies - it indicates something. It's what you do with this "something" that defines the outcome. Let me cite two analogies, one non-trading, to illustrate the point, and one trading, to make a connection (please, do not take it as an attempt to explain somehting to you, you clearly are on top of this - I am just continuing the line of thoughts).
Thermometer shows outside temperature being 58. Are you going to freeze or be comfortable going outside? Obviously, depends on how you dress.. If you put on shorts and t-shirt and get cold, was the thermometer wrong?
Stochastic shows the reading 90. Is a stock going to reverse to the downside? If you shorted it and it has paused, then resumed upward movement, was the stochastic wrong?
Noone is even going to set a question like this in a first case. And it's common to approach second case like this. Yet, both cases are the same. It's not about indication - it's about your reaction on it. You dress right - you don't get cold. You incorporate the reading of stochastic in your trading system correctly - you get to be on a right side of the trade (well, not every time, but over statistically valid number of attempts). No matter what a stock did, stochastic WAS right - reading WAS 90. It's what you do with it that matters, same way as with thermometer.
The very question "Do TA work" is invalid. No, if you are seeking predictive value in TA. Sure if you are using TA as to decide what to do. There is some paradox in it, but it all starts making sense when you go with the concept of trading as action in an uncertain environment - as apposite to a concept of "gather enough of data and process it right, and you get definite outcome".
Vad
P.S. I apologize to author of the thread for taking turn in pure trading direction... just thought since it's trading message board, why not find a bridge to trading...
Thermometer shows outside temperature being 58. Are you going to freeze or be comfortable going outside? Obviously, depends on how you dress.. If you put on shorts and t-shirt and get cold, was the thermometer wrong?
Stochastic shows the reading 90. Is a stock going to reverse to the downside? If you shorted it and it has paused, then resumed upward movement, was the stochastic wrong?
Noone is even going to set a question like this in a first case. And it's common to approach second case like this. Yet, both cases are the same. It's not about indication - it's about your reaction on it. You dress right - you don't get cold. You incorporate the reading of stochastic in your trading system correctly - you get to be on a right side of the trade (well, not every time, but over statistically valid number of attempts). No matter what a stock did, stochastic WAS right - reading WAS 90. It's what you do with it that matters, same way as with thermometer.
The very question "Do TA work" is invalid. No, if you are seeking predictive value in TA. Sure if you are using TA as to decide what to do. There is some paradox in it, but it all starts making sense when you go with the concept of trading as action in an uncertain environment - as apposite to a concept of "gather enough of data and process it right, and you get definite outcome".
Vad
P.S. I apologize to author of the thread for taking turn in pure trading direction... just thought since it's trading message board, why not find a bridge to trading...