TA - Objective or Psychological Skill?

[Ol' Yella]

This is an interesting debate on HFT. I have heard from many people in the industry that HFT has pretty much put the manual daytrader out of business.

Yet, on the internet, that doesn't seem to hold true.

Anyone ever find one of these internet people in real life and verify their success? Or is it a never ending chase like finding bigfoot?

Maybe one day we'll find one... until then we'll just have to keep on squatchin'

 

[dom993]

Quote from dom993:

As for the money management part, my system Crude-Oil always-in uses absolutely *no* money management (it's always in the market, long or short, and right now I trade it at constant position size), and it is 100% automated TA.

Follow its results on its journal thread:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=271781

Public track-record on the RAPACapIntro website:
http://rapacapintro.com/account/accounts?acc=CLAlwaysIn

I know, it's only 3 months of live trading (since March-19), however those 3 months saw 170+ trades taken by the system, fully automated TA, no money management (no stop / no target / constant position size : 1 contract) ... $90 average net per trade per contract.

Objective TA can be successful.

 

[wrbtrader]

Quote from justrading:

I'm curious how the research could be so specific as to be all encompassing...

So, to begin with, could you tell us what specifically the research tested? Not questioning it, but let's be clear on what we are discussing first.

There are hundreds of different types of breakouts and hundreds of different ways to trade them.

Anybody that say they've tested them all and none of them work without coughing up test results, without any definitions, without any chart examples of what they've tested...take what they say with a grain of salt.

Here's interesting observation about breakouts.

Marketsurfer's, trading pal Timothy Sykes loves to trade breakouts and surf is on record in saying the guy is a profitable trader along with showing verification of such. Therefore, I will assume surf hasn't tested Sykes breakout method. Also, Thomas Bulkowski and Linda Raschke trades and maintain interesting stats on other types of breakouts.

That observation tells me he hasn't tested all breakouts.

Good breakout traders are also good at fading breakouts.

 

[marketsurfer]

Quote from justrading:

No worries about the books and move, understandable.

I understand the point about the market being fractal, but is this actually statistical or numerical self-similarity, which would be necessary for statistical measures to apply to breakouts spanning the various timeframes?

Anyway, on page 2 he describes it as self-affinity.

http://www.scientificamerican.com/article.cfm?id=multifractals-explain-wall-street

Hershey will be along soon to confuse everyone.

LOL about JH. I have the guy on ignore so I don't go crazy reading his rants.

Thanks for the very interesting article! This is why I read elite trader-- there is always excellent insights and information that I would have never seen on my own. Peace, surf

 

[jem]

that seems like a claim by someone selling books not someone looking for an edge.


markets are not always fractal... how many people looking for edges find their edge in every time frame? I would bet very few.

that seems like a claim by someone selling books not someone looking for an edge.

Quote from marketsurfer:

If the market is fractal, as technical analysts state, then timeframe shouldn't matter to the efficiency of breakouts. I am in the process of moving to Palm Beach thus my books are all packed away--otherwise I would directly answer you. Rather, may i suggest, At the most simple, well designed tests on massive data size was published in my old boss's book "how markets really work" by larry connors. I am sure someone here has this book and can comment-----

surf

 

[marketsurfer]

Quote from wrbtrader:

T

Good breakout traders are also good at fading breakouts.

Back in the day, I would agree with you 100%, now things have changed---

I use to use this method succesfully---

http://technical.traders.com/tradersonline/display.asp?art=2414

 

[jem]

I am now confused by your argument.

are you saying the fed is correct (because surely you will not argue with the paper I cited since it used statistics) support and resistance are real but it is now more difficult to trade profitably because of HFT.

If that is really what you are saying, I would tend to agree.

Its why I no longer trading for a living but can still make winning trades when I take the time to sit down and watch the market.

Quote from marketsurfer:

The last remaining TA true believers after they do the group hug and welcome their leader alias or author hero despite zero evidence of success--- if you follow a mentor-- BE CERTAIN of their personal success in the markets not just because they claim success or are "nice" to you.

<iframe width="420" height="315" src="http://www.youtube.com/embed/_WxZaqe6ins" frameborder="0" allowfullscreen></iframe>

Come on, see reality, HFT has forever changed the market-- it doesn't "help"you--- google NANEX or Eric Hunsander if you don't believe me-- this is a major issue from EVERY real manual trader I know-- why it's shrugged off here as being irrelevent is a major tell that reality isn't as it seems on this thread.

surf

 

[NoDoji]

Quote from marketsurfer:

Here is a basic article from a 'friend' of mine explaining HFT and how it effects you----

Does It Hurt the Retail Investor?

I believe HFT definitely hurts the retail investor.

However, HFT doesn't hurt the retail price action day trader who uses a thoroughly tested trading plan.

 

[marketsurfer]

Quote from jem:

I am now confused by your argument.

are you saying the fed is correct (because surely you will not argue with the paper I cited since it used statistics) support and resistance are real but it is now more difficult to trade profitably because of HFT.

If that is really what you are saying, I would tend to agree.

Its why I no longer trading for a living but can still make winning trades when I take the time to sit down and watch the market.

Nice to see you, Jem. It's not only harder now, it's become purely a game of chance daytrading via price action alone.

The paper is 14 years old, man, based on data 30 to 50 years old------ it's completely outdated and not relevant to modern markets. Is that all the TA folks have?

Peace,

surf

 

[wrbtrader]

Most retail traders do not use a thoroughly tested trading plan. Thus, most retail traders are doomed to failure not to the fault of HFT. Yet, minority of traders that are profitable, I'm sure HFT has an impact but not in a way it will turn someone into a losing trader.

Anyways, I don't know a lot of HFT such as how it suppose to be hurting retail traders except for a few online news articles. Yet, I will say that when I noticed those words "High Frequency Trading (HFT)" started being used by institutional traders in the late 1990's...

Back in the 90's, HFT was in seconds. Soon around the financial collapse of 2008...it was in milliseconds.

I started seeing more retail traders complaining about how difficult trading has become especially on those days of "technical glitches" in the markets resulting in sudden price spikes or sometimes via what's called flash crashes. Yet, there have been key changes in the markets too that have impacted retail traders and investors greatly that have nothing to do with HFT.

Simply, poor trading and poor investing is primarily caused by other reasons. HFT is just part of the problem for some and the solution (profits) for others.

Regardless, I'm convince HFT is behind strange high volatility/choppy price action I see a few times per month where the spread gets crazy out of whack with consistently large orders.