What is Technical Analysis? Why does it work?

I'd advice anyone leaning to trade not to go beyond the hourly chart ...
it can be done: I got a whole scalping tool but it takes immens concentration and patience. And frankly it's not worth your time and effort: it's basically tickfucking for peanuts ... but it can be quite easily done. You can see demand and suply non lineair rolling from dominant timeframe to dominant timeframe where either the bulls or either the bears have control. It's an interesting game though if you want to 'understand' the market, but rest assured for most of us you don't need to 'understand' the markets you just got to be able to trade them. So yes scalping can be done, there are probaly bots playing that game nowadays. That's what makes the markets slightly different from before HFT.
 
I couldn't play my scalping game without indicators though ... anyone telling differently is just plain crazy ... naked price action works only well in real clear markets when cycles are all lined up ... that's why so many of them are one year wonders and just wash out after a certain while ...
 
The markets are like a multi-dimensional game of chess, everything is linked with everything causing supply and demand. Forex is probably the easiest way to describe that as it's a closed system. But of course there is spillover from forex to other markets and from other markets to forex. As such the real economy changes the supply and demand from real investors. All this changing of supply and demand makes it a 'chaotic system': a butterfly spreading it's wings in the Amazon can cause a thunderstorm in Asia. The best way to measure chaotic closed systems is by doing cyclical analysis like JM Hurst has done. I need indicators for that. Especially if I want to go to the smaller timeframes.
 
cvds16 said:
The markets are like a multi-dimensional game of chess, everything is linked with everything causing supply and demand. Forex is probably the easiest way to describe that as it's a closed system. But of course there is spillover from forex to other markets and from other markets to forex. As such the real economy changes the supply and demand from real investors. All this changing of supply and demand makes it a 'chaotic system': a butterfly spreading it's wings in the Amazon can cause a thunderstorm in Asia. The best way to measure chaotic closed systems is by doing cyclical analysis like JM Hurst has done. I need indicators for that. Especially if I want to go to the smaller timeframes.
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I like to think of it as multiple time frames, each one flowing into the next. Different players on each time frame. Watch for the clues of which one is in control. On the indexes I believe the weekly is still driving it.
 
Yup, good analysis. I have a more complex way of seeing it.
I define it as follows. I am trading a self-made multi dimensional cycle-based trading system using taking the three dimensional trifecta of price, time and volume into account. This is somewhat loosely inspired by the work of JM Hurst on cycles. I have placed this trifecta on top of a multidimensional chart setting. I have two versions of this: for swing trading (=everything above the hour) I like to use at least six dimensions for optimal trading. For scalping (everything below the hour) I prefer to have at least seven dimensions on my charts. This latter is mainly a theoretical experiment that I used to work out the theortical mainframe about how markets really work and the explanation behind the alternating dominating bull and bearforces in a closed system and how they are represented in charts. Like in any chaotic system the flapping of the butterfly in the Amazon can create a thunderstorm in Asia. So predicting is a fine art that is a work in progress. Always! Nobody can predict the future unless for limited amounts of time. After I got the desired results I left that scalping phase and now solely focus on swingtrading. (This is a very recent discovery).
For all most practical purposes you can swingtrade with three timeframes and take most off the meat in the middle. But in some cases you will leave a lot of money on the table.
 
cvds16 said:
the bots justs made the game more refined but in essence nothing has changed, it's still all about price action = the measuring of supply and demand ...
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You can really see this on the US overnight. Price moves for seemingly random reasons. Until you look closer and it is just the bots sweeping up the tight stops of traders.
 
yes, there is little point in competing with the bots and staring at a screen all day. 'wasted' about over 10 years of my life that way. But this how I finally 'got' it. I 'understand' supply and demand now and how it is represented in charts. (I need an indicator though, no naked charts for me !). And now I am moving on to a more quiet but much more effective life :D
 
cvds16 said:
the bots justs made the game more refined but in essence nothing has changed, it's still all about price action = the measuring of supply and demand ...
More...

Supply is unlimited due to naked and regular short sales, secondary offerings and all other plays on the books. I have never heard that broker would say that they run out of shares (or any other tradeable paper) for sale.
 
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