You too? I once wrote a post saying that the only reason TA signals appear to work is because sufficient trades see the same signal and act on it as a herd... I got bashed left right and centre and accused of giving newbies false information.
Trading with/without a mentor?
- Thread starter Utah
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I think that there are a couple things at play here.
On the one hand, TA always works. Markets almost always behave and react in a similar and recognizable pattern. (e.g. rally, break, consolidation, chop / rally / break....).
But, there is more going on and so you can't just say that a certain momentum, relative strength, or setup is truly consistently predictive (it's an over simplification). There are always going to be exceptions to the rule.
One thing that is going on is that traders (and robot traders) are using TA on spreads which are the risk adjusted differentials of things like indexes. So you can have a rally going on in an index spread that is pushing the price action in the stock averages (contrary to classical TA). The sectors are being traded against each other, and equities are always being traded against the bonds.
At the end of the day, TA and setups / indicators / screening tools are just ways to control risk/reward outcome. In the modern era, professional risk managers are using much more. They are building long/short books across global equity markets and bond duration.
There are many ways to control risk, TA is just one of the most basic. You have to remember, when you are trading billions of dollars, the market just isn't liquid enough to time your entry and exit. The liquidity just isn't there in such a short time frame.
That's why you see so much action in the price. There could be 8 hours of consolidation and then a break and massive rally afterward because the entire liquidity situation has changed!
Here is a great post about the new markets from a REAL PRO TRADER.
http://tradestrongmanagement.blogspot.com/
On the one hand, TA always works. Markets almost always behave and react in a similar and recognizable pattern. (e.g. rally, break, consolidation, chop / rally / break....).
But, there is more going on and so you can't just say that a certain momentum, relative strength, or setup is truly consistently predictive (it's an over simplification). There are always going to be exceptions to the rule.
One thing that is going on is that traders (and robot traders) are using TA on spreads which are the risk adjusted differentials of things like indexes. So you can have a rally going on in an index spread that is pushing the price action in the stock averages (contrary to classical TA). The sectors are being traded against each other, and equities are always being traded against the bonds.
At the end of the day, TA and setups / indicators / screening tools are just ways to control risk/reward outcome. In the modern era, professional risk managers are using much more. They are building long/short books across global equity markets and bond duration.
There are many ways to control risk, TA is just one of the most basic. You have to remember, when you are trading billions of dollars, the market just isn't liquid enough to time your entry and exit. The liquidity just isn't there in such a short time frame.
That's why you see so much action in the price. There could be 8 hours of consolidation and then a break and massive rally afterward because the entire liquidity situation has changed!
Here is a great post about the new markets from a REAL PRO TRADER.
http://tradestrongmanagement.blogspot.com/
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Article is 5 years old. Everything is invalid.
Hardly. Go ahead and quote the article.
I dare you to make an argument against anything he says. (out of the top post)
You will be in a very tough position. That guy is the realest futures trader there ever was. Traded with the godfather of futures and the CME, Leo Melamed.
You are going to run into to trouble if you push your opinion on this one Overnight. Might want to reconsider.
I dare you to make an argument against anything he says. (out of the top post)
You will be in a very tough position. That guy is the realest futures trader there ever was. Traded with the godfather of futures and the CME, Leo Melamed.
You are going to run into to trouble if you push your opinion on this one Overnight. Might want to reconsider.
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"...how traders cope with probabilistic uncertainty and their imperfect view of the market is critical to their success. the essential job of traders then is to reduce uncertainty, not risk.
as a leveraged trader, one makes short-term decisions/trades, but understands what is happening at time frames greater than the one he's currently trading. the decision to trade and its management, flows from an analysis of price action."
That is 100% invalid today, with the trade war in progress.
You CANNOT reduce uncertainty, period, with that madman in office. That increases your risk by a very large number.
There is Price Action, and then there is a TWEET. These are mutually exclusive concepts. This market we are in is unique.
If you want to swing without exposing yourself to the trump tweets and trade war then you have to use advanced concepts. Things like
'market neutral strategies' and other techniques to 'mitigate systemic risk'. In other words you want to trade a smaller risk profile.
If you just go long nasdaq then you are essentially just trading the global economy.
(cuz you're trading the top of the global market in equities).
ANYTHING ON THIS EARTH could affect your PnL.
'market neutral strategies' and other techniques to 'mitigate systemic risk'. In other words you want to trade a smaller risk profile.
If you just go long nasdaq then you are essentially just trading the global economy.
(cuz you're trading the top of the global market in equities).
ANYTHING ON THIS EARTH could affect your PnL.
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Well, if you want to swing the NQ these days, then yes, you better have a hedge! I suppose that would mean "Market neutral strat".
If you just go long nasdaq then you are essentially just trading the global economy.
And cheeseburgers.
Not so, all is relevant x 2, add tweets to what was said and the relevance becomes x 3.
Trading purely on TA is obsolete, TA has become one of the many tools but no longer the entry decider although still useful for the exit. Any retail trader trading on just TA is plain & simply trading the lazy way with doubtful success.
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Great catchs. Emmett also had done the usual fun read (and sobering) review. (https://www.tradingschools.org/reviews/i-am-a-day-trader/)
Why so many would-be traders can't realize that none is a charity in this game. One must ask themselves why is this guy interested in making money for me?
If someone is offering you the holy grail, you have to ask yourself why! Why sell and share it? just get on with making a fortune for yourself with it then retire... if they are selling it it's because it doesn't work. Just common sense, right? Just remember the guy that made a fortune selling shovels during the gold rush.