Support and Resistance is Random

[Q3D]

In this video http://adamhgrimes.com/blog/randomsrlevels/ , trading educator Adam Grimes shows viewers that what most intraday traders see as support and resistance price levels are random.

Over the span of five years as a technical analyst and day trader I have come to similar conclusions from experience as Grimes did quantitatively, that everything on a chart is random and most discretionary day trading success can be reduced to chance, risk management, psychological awareness and speed of execution. The factors of success for discretionary day traders are much harder to achieve now, with the dominance of HFT in the past decade and will become nearly impossible for discretionary daytraders when quantum-computer trading algorithms establish dominance with near-total efficiency in the markets as HFT algorithms have.

It is my opinion that the publishing of a book on intraday price action, especially for discretionary traders, without an acknowlegement of randomness in the markets by the author, to serve as one of many necessary disclaimers, is as socially irresponsible as publishing books like The Anarchist Cookbook or a do-it-yourself abortion book.

 

[AbbotAle]

The problem with quantum computer algos is who will lose if they're so good? Would casinos exist if there was no way in ever making a winning bet?

One man's profit is another man's loss in this game so everyone, however good they may be, cannot win.

Personally I think the algos are no different from a bunch of human traders, the better humans will gain at the expense of the less human traders. The better algos will take money from the lesser algos.

 

[Q3D]

The problem with quantum computer algos is who will lose if they're so good? Would casinos exist if there was no way in ever making a winning bet?

One man's profit is another man's loss in this game so everyone, however good they may be, cannot win.

Personally I think the algos are no different from a bunch of human traders, the better humans will gain at the expense of the less human traders. The better algos will take money from the lesser algos.

There will still be institutions operating on different time frames with different objectives, not all directly in competition, resulting in some price fluctuations probably at the nanosecond level. There will be no opportunity for discretionary traders to compete due to speed of executon issues, which has already led a drastic decline in discretionary daytrading over the past decade due to the comparatively primitive HFT algorithms.

 

[El OchoCinco]

Why do you have such a hard on for Adam Grimes and posting all his stuff here? Do you have any original thoughts or just regurgitating all of his comments as a substitute for your own ideas? What is the point trying to be made here?

 

[NeoTrader]

In this video http://adamhgrimes.com/blog/randomsrlevels/ , trading educator Adam Grimes shows viewers that what most intraday traders see as support and resistance price levels are random.

Over the span of five years as a technical analyst and day trader I have come to similar conclusions from experience as Grimes did quantitatively, that everything on a chart is random and most discretionary day trading success can be reduced to chance, risk management, psychological awareness and speed of execution. The factors of success for discretionary day traders are much harder to achieve now, with the dominance of HFT in the past decade and will become nearly impossible for discretionary daytraders when quantum-computer trading algorithms establish dominance with near-total efficiency in the markets as HFT algorithms have.

It is my opinion that the publishing of a book on intraday price action, especially for discretionary traders, without an acknowlegement of randomness in the markets by the author, to serve as one of many necessary disclaimers, is as socially irresponsible as publishing books like The Anarchist Cookbook or a do-it-yourself abortion book.

 

[Q3D]

Why do you have such a hard on for Adam Grimes and posting all his stuff here? Do you have any original thoughts or just regurgitating all of his comments as a substitute for your own ideas? What is the point trying to be made here?

Everything I posted were my own thoughts on the issue of randomness and how it relates to my experience as a trader aside from the link. The point is everything we discretionary traders were sold about intraday price action is a lie, signal bars, entry bars, higher lows, lower highs, they are all just as present in random, non-purposive data as they are in the most cherry-picked and logical-seeming retrospective chart analysis.

A day trader has no way of assigning a probability to randomness. If they cannot assign a probability they do not have an edge based on the chart data and thus cannot make trades based on that random data without having a certain risk of ruin over a wide enough distribution of data.

 

[WildBill]

@Q3D

You have started three different threads over the last few days trying to "debunk" three different TA methods.

Each of the three tools CAN work in varying degrees when used by a competent trader. Because you are neither competent, or a trader, they will never work for you.

While I was writing this post I took a very small CL short trade for 10 ticks because of a resistance level I have seen play out time after time.

For your own mental health and well being you need to stop trading. Don't think about it, dream about or even turn on your computer.

Trading is the hardest "easy" thing to do, once you free your mind and open yourself up to the possibilities. You are so hung up on what doesn't work because of your own past mistakes and lack of understanding. You are still in the unconscious stupidity phase. You don't even know what you don't know.

With that, you go on the ignore list. Your posts are psychological poison.

 

[learner2007]

The factors of success for discretionary day traders are much harder to achieve now, with the dominance of HFT in the past decade and will become nearly impossible for discretionary daytraders when quantum-computer trading algorithms establish dominance with near-total efficiency in the markets as HFT algorithms have.

People so often say this as if there will be no more intraday trends with which to trade. I would say that with the increased speed of price movement compared to decades ago, the elapsed time from the start to the end of a trend has been reduced so much that the number of intraday trends has increased significantly. Good news for traders! If quantum computer trading can add to that, I for one welcome it!!

 

[Q3D]

People so often say this as if there will be no more intraday trends with which to trade. I would say that with the increased speed of price movement compared to decades ago, the elapsed time from the start to the end of a trend has been reduced so much that the number of intraday trends has increased significantly. Good news for traders! If quantum computer trading can add to that, I for one welcome it!!

In markets like the ES it's nearly impossible to determine when or if the market is trending from an analytical perspective, a flip of the coin and lucky risk management is far more effective than an analytical approach. The random occurrence of the trends in current HFT markets can be seen at the 5 minute level charts with all sorts of reversal and sell signal bars mixed into what only after-the-fact can be confidently labeled a trend.

 

[Sergio77]

In markets like the ES it's nearly impossible to determine when or if the market is trending from an analytical perspective, a flip of the coin and lucky risk management is far more effective than an analytical approach. The random occurrence of the trends in current HFT markets can be seen at the 5 minute level charts with all sorts of reversal and sell signal bars mixed into what only after-the-fact can be confidently labeled a trend.

This article shows why intraday ES traders without a verified edge will lose.