The Elusiveness of It All

[wrbtrader]

I've never understood the TA crowd. I think as humans we are biased by the last segment of the line and what that would have meant - or did mean - to our bottom line.

And I'm certainly no TA aficionado, but tell me - given the chart in the first post, why isn't everyone going long here? Why aren't those two lower end spikes a "double bottom"?

This isn't about TA although I do understand you trying to use "chart analysis" to draw a line to TA.

The problem is the human nature...the mind or how we relate to the markets. Some traders are going Long and others are Short that price action even those traders that do not use TA nor believe in it.

The issue is our perceptions of the markets, how we relate to it and how we try to exploit such involving "long term positions" which is really the issue about the chart...very few traders will stay in those "long term positions" because our subconscious (the mind) isn't wired for such...behavior finance.

Just like you said or imply...we tend to be more influence by recent events in comparison to the overall picture (more difficult to see by most) via your statement as humans we are biased by the last segment and its applicable to all other trading approaches not related to TA.

 

[ktm]

This isn't about TA although I do understand you trying to use "chart analysis" to draw a line to TA.

The problem is the human nature...the mind or how we relate to the markets. Some traders are going Long and others are Short that price action even those traders that do not use TA nor believe in it.

The issue is our perceptions of the markets, how we relate to it and how we try to exploit such involving "long term positions" which is really the issue about the chart...very few traders will stay in those "long term positions" because our subconscious (the mind) isn't wired for such...behavior finance.

Just like you said or imply...we tend to be more influence by recent events in comparison to the overall picture (more difficult to see by most) via your statement as humans we are biased by the last segment and its applicable to all other trading approaches not related to TA.

Excellent points.

I only trade options and I've been in the market for decades. These last few months for me have been just fine. As Maverick said in another thread, this is the way it used to be all the time. For ME, I can deal with the swings because of the products I trade. For folks that are selecting long/short or picking a direction, I don't know how in the world they do it.

I'm watching the ES up 15 points in the evening, then down 30-35 in the middle of the night and then up 30-40 the next day. To pick a direction or determine any kind of trend in this seems like madness to me. Which is why I lost money trying to do so - many years ago - and switched to other products and methods.

I've read numerous books about the psychology of crowds and the way groups of people behave in the face of profit and loss, both collectively and individually. The market averages seem (to me) to have more capability of divergence these days. In other words, we've always had madness and irrational behavior that swings the averages away from where they should be fundamentally, but perhaps with the instant availability of every tidbit of news disseminated worldwide instantly - we're seeing a fundamental change.

Or it could be simply another one of those "nervous periods" that we go through from time to time.

 

[DDR]

wrbtrader
Your post was very informative and gave me the answer I was looking for. So thank you.
Your right deep pockets are required to trade this way as some retraces can be 50% back into your profits but then you would have to have an incredibly strong mind to hold through it !
Attached thumbnail, it's a quote from Michael Marcus. Waiting for market alignment is one of those factors that a seasoned trend trader would be waiting for.
"ktm" yes going long here for a counter trend bounce could be done, but when the market rolls over those that were holding for the trend move will be adding to shorts. If this whole down move is in fact the start of a bear market these trend traders will be making large sums.
Begs the question when do you sell ? I've heard it mentioned that this indeed is the hardest part of trading.

 

[DDR]

The issue is our perceptions of the markets, how we relate to it and how we try to exploit such involving "long term positions" which is really the issue about the chart...very few traders will stay in those "long term positions" because our subconscious (the mind) isn't wired for such...behavior finance.

There is much truth in this comment, might I ask what is your approach in finding a suitable position ? Is it a matter of finding evidence around the world that a certain commodity or instrument is at a turning point. This combined with fundamentals T/A and market tone.
You mentioned your friend that had a few losing trades before he got into the CL trend, perhaps he has a focus on CL and has been following the factors that create it's moves.
If he were a chartist the signs were there at least on a T/A level. Of course knowing and combining the fundamentals that may cause certain price outcomes would increase the odds of a winning position. Then again I understand the pro's build positions at diff levels, no one can get in at the very turning point.
Weekly chart for CL is just an illustration of what a trend trader with a 10,000 foot view of trading would see. The ability to wait for the right time to enter would be an incredible trait to have one that alludes me at the moment and might do for some time. In saying that this is really the only way to make your money work for you, "Getting in on trends".
I know there are many successful day traders here on ET so not trying to offend any of you. I'm sure there are threads more specific to your subject.

 

[DDR]

Not suited to many but a thought provoking method just the same. Not suited because of the wiring issue humans have for instant gratification among other things.
"This big picture approach lowers noise levels considerably allowing the weekly trader to see opportunities that are missed by short-term players. Admittedly, these trade setups require patience and self discipline because it can take several months for weekly price bars to reach actionable trigger points. However, higher reward potential makes up for this lower activity level, while total work effort allows the trader to have a real life away from the financial markets."
Read more: Step Back From The Crowd & Trade Weekly Patterns | Investopedia http://www.investopedia.com/article...crowd-trade-weekly-patterns.asp#ixzz3ymk3dhIp
Follow us: Investopedia on Facebook
http://www.investopedia.com/articles/active-trading/010715/step-back-crowd-trade-weekly-patterns.asp