This coronavirus volatility has got me thinking...

[Overnight]

Technicals can map only what has happened, not what will happen. If what has happened happens again, and fits into a pattern, we call it fitting the pattern. If it does not, we then wait for price to fit the pattern, and say, "See? There's the pattern we knew would happen! It's a H&S or BO or etc etc blah." Bloody trick of the mind, and the eye. The eye will see what it wants.

A price hits a point once, it is un-noticeable in the noise. It happens to hit that point 2,3,4 times in a given timeframe? It becomes a top or bottom, because we perceive it that way. It becomes a pattern. So why did we not see the pattern forming? Because it did not form a pattern until after it formed, in the PAST.

 

[dozu888]

There are now clear reasons to expect the markets to do certain things. But this is rare.

So all the other times that we're just in "normal" times... Are we just trying to create something out of nothing? Looking for trading opportunities that don't exist and trying to force the logic behind them?

I would really laugh at anyone who still believes in Technical Analysis after this.

it's good you are thinking.... with this much garbage among other traders, you better off cut off any communication and just figure this out on your own.

most so called traders are damaged goods as it will take them forever to unlearn this whole 'technical' thing that brings almost no edge.

 

[farmerjohn1324]

Yes, it's very difficult to learn all the nuances and to actually learn what indicators to use together. Also, sometime's even back testing strategies that look good, when you move them to live they actually don't work as intended and the results can be different (for a multitude of factors).

So, I am not debating you on the difficulty. It take's some people years and years to find an edge. I am just letting you know that it isn't impossible.

There are so many different variables that only a computer could test them all.

Plus, it would have to have a success rate will above 50% to make sure it's not just a coin toss. I'm thinking at least one standard deviation above 50%.

And all of this "homework" could be negated by any change in fundamentals.

 

[SunTrader]

Traders trade. Not ask whyyyyyyyyyyyyyyyy?

 

[trdes]

Technicals can map only what has happened, not what will happen. If what has happened happens again, and fits into a pattern, we call it fitting the pattern. If it does not, we then wait for price to fit the pattern, and say, "See? There's the pattern we knew would happen! It's a H&S or BO or etc etc blah." Bloody trick of the mind, and the eye. The eye will see what it wants.

A price hits a point once, it is un-noticeable in the noise. It happens to hit that point 2,3,4 times in a given timeframe? It becomes a top or bottom, because we perceive it that way.

People that move larger sums of money aren't just randomly buying or selling. if someone is moving large sums of money, they can't just press buy or press sell on their entire position, because the movement in and of itself could price them out of the trade or they could fail to get the net weighted average they are seeking for that product, stock or whatever they are trading.

Why does that matter? Because they have to buy or sell smaller blocks to get a net weighted average. This movement they are doing over time certainly creates patterns / clues that you can pick up on, which allows you to extrapolate setups and trades that have a probability. That's than where the big moves come from, once they have the desired net weighted average, you''ll often see a bigger move take place or a "wave" of selling / buying because they have the net weighted average and have gobbled up all of the supply which than will force the market in the desired direction.

Is it 100%? of course not, but it can still give probabilities above 50%.

 

[trdes]

There are so many different variables that only a computer could test them all.

Plus, it would have to have a success rate will above 50% to make sure it's not just a coin toss. I'm thinking at least one standard deviation above 50%.

And all of this "homework" could be negated by any change in fundamentals.

It's rare fundamentals ever matter(particularly speaking of intra-day trading). The situation is so extreme currently, that this is one of the cases where most traders need to be aware of the fundamentals that is true. But even in this case there are still plenty of long setups to be had intra-day.


Do you understand the markets move because of supply? If there's an imbalance in supply the market will move in the opposite direction to clear out the imbalance.

If the fundamentals are so bad that they are drastically effecting the markets and your TA isn't seeing that or when it gives a signal it still isn't working, than you have no stastical edge in your TA and of course it's absolutely useless.

 

[trdes]

There are so many different variables that only a computer could test them all.

Plus, it would have to have a success rate will above 50% to make sure it's not just a coin toss. I'm thinking at least one standard deviation above 50%.

And all of this "homework" could be negated by any change in fundamentals.

No you're missing the point of TA. YOU NEED to have an effective way to measure the underlining strength of the asset you're trading. Fundamentals may effect that, but they do not effect how you trade it. If the stock is weak based upon whatever you're using to measure strength vs weakness, than you would look to take a short, once your trigger event takes place.

That's the whole point of TA. It isn't for you to take a buy signal just because two lines crossed, if the stock has no bullish momentum and than blame fundamentals on why your TA failed. Doesn't work like that.

 

[schizo]

There are now clear reasons to expect the markets to do certain things. But this is rare.

So all the other times that we're just in "normal" times... Are we just trying to create something out of nothing? Looking for trading opportunities that don't exist and trying to force the logic behind them?

I would really laugh at anyone who still believes in Technical Analysis after this.

TA does not explain why something is happening in the markets.

Seriously, if I want to know why something is happening in the market or an explanation for such...I listen / watch real-time market news.

wrbtrader

Hard-core chart traders don't care about the why. They only care about what they see on the chart.

 

[schizo]

Technicals can map only what has happened, not what will happen. If what has happened happens again, and fits into a pattern, we call it fitting the pattern. If it does not, we then wait for price to fit the pattern, and say, "See? There's the pattern we knew would happen! It's a H&S or BO or etc etc blah." Bloody trick of the mind, and the eye. The eye will see what it wants.

A price hits a point once, it is un-noticeable in the noise. It happens to hit that point 2,3,4 times in a given timeframe? It becomes a top or bottom, because we perceive it that way. It becomes a pattern. So why did we not see the pattern forming? Because it did not form a pattern until after it formed, in the PAST.

That is just Bull...and you know it. Otherwise, I wouldn't be flipping for over 20 years.

 

[FriskyCat]

That is just Bull...and you know it. Otherwise, I wouldn't be flipping for over 20 years.

This is the 37,493rd thread on "TA sucks vs TA is great" on ET over the past 23 years.