TA - Objective or Psychological Skill?

Quote from cornix:

And if money management alone was the key to consistent profitability, why trading is to hard?
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It won't work without the foundation of a minimum amount of winning entries and trading in a market appropriate to the money management style or system. It is key however.

Trading is still hard because GREAT money management is not easy. It needs discipline, good psychology, understanding and managing risk, and knowing how to maximise returns which means great ability to figure out what the market will do next (which I don't have) or some serious data/statistical analysis to underpin decisions, which is my preferred route.

I've worked with a large number of people in my lifetime, from line supervisors to CEOs. Let me assure you the average Joe at any level is not great with numbers, sucks at logic, and makes too many decisions clouded by emotion.

Honestly, how many people do you know with the capability to figure out what the market will do next?
 
Quote from cornix:

Agree. Basically it just requires a lot of patience and be willing to do the hard work. A lot of it. Studying charts for months and probably years, then carefully collecting statistical information, spending endless hours in Excel is not something most think trading is like.

In reality it's extremely boring and draining work. Both the research and trading itself. Patience and focus.

Ironically, this business attracts just the opposite: born gamblers who like excitement. And correct trading, just like correct poker is very dull, not exciting at all.
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Quite right here. I'm lucky I truly enjoy working with numbers. I can bury myself in Excel for hours, in contrast sitting and watching a live chart gets old after a while.
 
Quote from justrading:

It won't work without the foundation of a minimum amount of winning entries and trading in a market appropriate to the money management style or system. It is key however.

Trading is still hard because GREAT money management is not easy. It needs discipline, good psychology, understanding and managing risk, and knowing how to maximise returns which means great ability to figure out what the market will do next (which I don't have) or some serious data/statistical analysis to underpin decisions, which is my preferred route.

I've worked with a large number of people in my lifetime, from line supervisors to CEOs. Let me assure you the average Joe at any level is not great with numbers, sucks at logic, and makes too many decisions clouded by emotion.

Honestly, how many people do you know with the capability to figure out what the market will do next?
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You have a point here. Indeed trading is not much different from other highly scalable professions in this sense. To become a great trader is no harder or easier than a great neurosurgeon, great lawyer, great singer, athlete etc. Ask any truly successful person about their way to success and the answers will be much the same as answers of successful traders.

As for money management, I have detailed stats for my trades. Guess what? Results are different, but edge remains within the very wide range of money management tactics from scalping to huge R:R swing trading.

At the same time money management alone with random entries is unlikely to provide any edge, otherwise anyone could create an algo which is basically a money machine, because money management has usually not many inputs.
 
I'll admit, I am sceptical TA can do the job. 1 or 2 years ok, but then markets change and you back to drawing table and excel.

that was my experience at least.

cornix, can you please disclose win rate you are averaging normalised to 1:1 risk reward? This would be expected win rate you are trying to demonstrate in other thread.
 
Quote from toolazy:

I'll admit, I am sceptical TA can do the job. 1 or 2 years ok, but then markets change and you back to drawing table and excel.

that was my experience at least.

cornix, can you please disclose win rate you are averaging normalised to 1:1 risk reward? This would be expected win rate you are trying to demonstrate in other thread.
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Around 55-60% in the long-term normalized to 1:1 risk/reward I think. Raw win rate is probably closer to 50%, but risk/reward is positive. All figures net with commissions included.

As for TA, I don't notice that any patterns "stopped" working. Volatility changes, yes. Some markets become dull and other become active depending on fundamentals. Consequently some TA patterns and elements of tactics, which require overall higher or lower volatility tend to work better or worse. But market structure doesn't change at least to the extent of my personal experience.

When you're in the markets every day you adapt as volatility changes and it's not that dramatic.
 
My problem isn't with TA necessarily, but rather the grossly inaccurate portrayals of what is possible with it that abound on the internet. I do not doubt there are profitable traders that use some form of TA. Just don't talk to me about turning 10k into 80k year after year after year.... LOL!
 
Quote from Ol' Yella:

My problem isn't with TA necessarily, but rather the grossly inaccurate portrayals of what is possible with it that abound on the internet. I do not doubt there are profitable traders that use some form of TA. Just don't talk to me about turning 10k into 80k year after year after year.... LOL!
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What makes you think there are some strictly defined boundaries of what's possible?
 
Quote from cornix:

That's philosophical question, irrelevant to the discussion. In practical reality we have to distinguish subject from the object and act assuming they are truly different.

Probably there are people who truly achieved Zen state and are able to trade as if the market was part of them and they are part of the market, but unlikely we meet them here and even more unlikely practically could replicate their success. :)
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For me it is like driving a car.

In driving you "know that you know" because you have knowledge and skills and a reliable auto and all drivers follow the same defensive practices on the roads.
 
Quote from jack hershey:

For me it is like driving a car.

In driving you "know that you know" because you have knowledge and skills and a reliable auto and all drivers follow the same defensive practices on the roads.
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Yea, skill developed to the stage of reflex.
 
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