The reason I dont use any indicators
- Thread starter Grantx
- Start date
I agree with you 100%. Don't waste your time arguing with fools on the Internet. Most people on here are not profitable. The market is the ultimate litmus test. You enjoy your returns and their foolishness will show up in their P/L statement at the end of the year.
I just read the whole discussion ( which I never do
).
My two cents. One has to clearly understand what the particular indicator suppose to indicate , and at which point its indications are not actually indicative... . The bar chart itself , especially candlesticks, IMHO is an indicator in itself, that's why some people rely solely on charts.
I agree that indicators ( and charts) are just tools. But to archive the results with any tools its not enough to know how to work with them, but to have a master plan to get to the goal. Without it its becomes really impossible to get the results. To built the house, one may need many different tools, and the knowledge how to work with them but in itself these ability is useless. By the way its was not uncommon in Siberia to built a beautiful log home with just a simple axe. So the real question is not what to use but how and when: The question is what is the method (the masterplan) suppose to look like.
).My two cents. One has to clearly understand what the particular indicator suppose to indicate , and at which point its indications are not actually indicative...
. The bar chart itself , especially candlesticks, IMHO is an indicator in itself, that's why some people rely solely on charts.I agree that indicators ( and charts) are just tools. But to archive the results with any tools its not enough to know how to work with them, but to have a master plan to get to the goal. Without it its becomes really impossible to get the results. To built the house, one may need many different tools, and the knowledge how to work with them but in itself these ability is useless. By the way its was not uncommon in Siberia to built a beautiful log home with just a simple axe. So the real question is not what to use but how and when: The question is what is the method (the masterplan) suppose to look like.
How would you know you could make a good living trading random entries when you've stated that you use "predictive indicators" in your trading? Have you tried random entries for an extended period of time and made this so called living? Or, are you just guessing?
Look, I've been down that road before, making modest sums of money trading with good risk to reward ratios with more losers than winners. Some years good and some with very little. I could proclaim to the world that I was profitable and leave it at that, but that approach wasn't good enough. I had to make a good living at this damn game.
My edge, it's not about being right or wrong, it's about minimizing draw down and anticipating market condition changes in volatility immediately. I use high probability setups (infrequently) and when they exhibit a change in behavior to the slightest, I shut it down. When this happens it's because volatility is changing or institutional trading is anticipating something. I do have negative R:R setups. Gone are the days where I wait for that "winner" to pull me out of a big draw down. I've had it with that shit. Why go through that if I don't have to?
Anyway, my opinion was about traders starting out (could be years), they usually pick direction poorly and this challenges their "mindset" and they end up throwing discipline and decent R:R out the window. I was responding to the statement that Buy1Sell2 said about "traders picking direction well", but blowing their accounts up due to bad risk management. I only said I disagree with "traders picking direction well"...I don't think that part is true for most.
I know traders can make money with good risk management, but can they make a good living with only good risk management? Can they do it with random entries? I seriously question this.
1. From my experience taking on new clients, I can tell you that the vast majority of even experienced traders that I have seen misuse and abuse technical analysis indicators. In many different ways. There's widespread TA abuse running rampant.
2. There is no monopoly on "correct" ways to trade a market. I'm a big proponent of spread trading futures but I'll be the first to admit that there are numerous strategies and methodologies that can work.
3. If you can find a consistent, repeatable way to take money out of markets over an extended period of time - who the fuck really cares. Astrology, numerology, machine learning, market profile, moving average crossovers... it truly is of no consequence.
2. There is no monopoly on "correct" ways to trade a market. I'm a big proponent of spread trading futures but I'll be the first to admit that there are numerous strategies and methodologies that can work.
3. If you can find a consistent, repeatable way to take money out of markets over an extended period of time - who the fuck really cares. Astrology, numerology, machine learning, market profile, moving average crossovers... it truly is of no consequence.
Well, even if you don't use an "indicator" per se you'll need a trading system. A trading system can be as simple as a few rules. Occam's Razor is definitely in play here (more variables does not yield superior results necessarily).
For example, one "non-indicator" based system might be: 1. On a two minute bar chart, after two successive bars with higher highs and higher lows, 2. BUY the next offer, and 3. enter a profit taking order 3 tics above my entry, and 3. If the trade goes two tics against me, hit the next bid.
You can also trade off of fundamental correlations. For example, there was a period of several months around 2009/2010 where Crude Oil literally followed the Euro Currency tic for tic. You could put a Euro and a CL order book side-by-side and lead-lag trade the ever loving shit out of it. When I was in the Treasury Pits we watched the Cantor Fitzgerald cash screens, the Yen, and the S&P.
It can literally be that simple. I've seen pit traders and screen scalpers worth millions scalp in a similarly simplistic fashion like that the example I described above.
But to my point, regardless of entry methodology you need systemic rules for entry conditions, profit taking, and loss taking if you really want to go far with it.
For example, one "non-indicator" based system might be: 1. On a two minute bar chart, after two successive bars with higher highs and higher lows, 2. BUY the next offer, and 3. enter a profit taking order 3 tics above my entry, and 3. If the trade goes two tics against me, hit the next bid.
You can also trade off of fundamental correlations. For example, there was a period of several months around 2009/2010 where Crude Oil literally followed the Euro Currency tic for tic. You could put a Euro and a CL order book side-by-side and lead-lag trade the ever loving shit out of it. When I was in the Treasury Pits we watched the Cantor Fitzgerald cash screens, the Yen, and the S&P.
It can literally be that simple. I've seen pit traders and screen scalpers worth millions scalp in a similarly simplistic fashion like that the example I described above.
But to my point, regardless of entry methodology you need systemic rules for entry conditions, profit taking, and loss taking if you really want to go far with it.
Now youre talking. Looking at indicators is a form of pattern recognition in itself but only adds more complexity. Why on earth someone wants to add more processing steps to something that can be dead easy is beyond me. When you look at the clouds your brain automatically pattern matches without you even trying. You might see a dog or a face or whatever. Why not rely on this powerful automation and train your mind to instantly recognise patterns on a chart? Its possible. I do it every day. Its really very simple and anyone can do it.
Well, to answer that I'll go back to the previous statement I made that I have found that many of the clients I have taken on simply were not using Technical Analysis correctly.
In my case, we are literally looking at thousands of spread combinations which include every electronic futures market available to us. I want my clients to cherry pick the best risk/reward entries. Every client I take on is different. I had to devise a trading system that works over the long haul, through constantly changing market cycles, and for clients with varying backgrounds. I get clients who scalp the ES, and I get clients who make markets for interest rate swaps on a bank desk - the entire spectrum of possibilities. For a trade entry, we need four rules to be satisfied - one of them is a custom indicator package that I developed over many years. If a client is looking at possibly thousands of charts routinely - teaching them clairvoyant pattern matches is not good enough for them. There needs to be more efficiency and in fact more certainty for this wide spectrum of clientele.
It sounds like you are picking up on some easy (for your eye) queues and things seem readily apparent to you - that will most definitely change. Every market that I have ever seen has price action that is constantly changing. Trending markets become sideways consolidated choppy markets. Volatility swings affect how positions get accumulated by the larger participants and therefore price bar patterns cycle between random and obvious.
That's my experience and 2 cents, YMMV.