Why do you believe in such things as wedges, triangles and inverted whatevers...
- Thread starter retaildaytrader
- Start date
You have a elementary understanding of technical analysis, that's why you don't understand the value of it, or how exactly it works. A failed trader might see a triangle, a successful trader sees something else. If I told you what that something was, you wouldn't believe me, nor would you understand me, but you would definetly ignore me.
The only true holy grail is that one that you can shout in the street but no one will listen.
current/future order book, that's what you need to 'see'. HFT robots have insight and win using AI to conclude future reactions of traders. Like Trader A bought, therefore group ZZZ of traders plan the same as this is repeated pattern.
They know what you up to.
You do not see that
Winning rule simple : go against masses.
will TL break or not? Odds depend on order book and this depends on psychology and perception. TA is one way but most of it is useless as computers arbitrage patterns and you never know when your lucky one will be targetted. I found short term book readingh to be emotionally draining, beyond my comfort level & there is a limit of how far you can go in size. Playing longer term stuff easy and relaxed with no stops.
They know what you up to.
You do not see that
Winning rule simple : go against masses.
will TL break or not? Odds depend on order book and this depends on psychology and perception. TA is one way but most of it is useless as computers arbitrage patterns and you never know when your lucky one will be targetted. I found short term book readingh to be emotionally draining, beyond my comfort level & there is a limit of how far you can go in size. Playing longer term stuff easy and relaxed with no stops.
I agree with the concept of this thread, although there is some statistical value to technical analysis, there's nothing there that price action and fundamental analysis wouldn't have already told you more accurately and more recently. Technical analysis formations are the after the fact result of what has already taken place, most of the money has already been made on the move by setting up the technical analysis fools for false signals.
But, I also made over 300% a year as a daytrader for 5-6 years.
I made 20-50 trades a day in the late 90s and into the beginning of the decade and it was all t/a. I traded a few million shares a month and a made a good living at it until the structure of the market change. I was in an office with a dozen other guys who had similar returns and we did better in the down market. They changed the rules and the ecns and electronic futures took away a lot of our edge.
but
.. There are still trades which set up on muiltiple time frames... which work far more than 50/50 on 2-3 to 1 risk reward.
after years of looking at stock charts... I know a well behaved stock when I see it.
If you don't know what well behaved chart looks like, I have no idea how you tell me I am wrong or lucky.
Finally I am related to someone in his 70s, who retired 15 years ago with a 1.5 million dollar net worth, has spent 3 million and still has net worth of about 3 -4 million. 80% of that is from sector trading and IBD. all his trades are directional an he seems to put on 3 10 trades a week.
I do not doubt that others can make $ with triangles, trendlines, etc. I just do not know how to do it myself. The problem is that there is no way to know when to start and when to end them. They are subjective.
A moving average, a Bollinger band, an oscillator: these things I can understand. Once you have set some rules for what the parameters will be, these become objective. I am more comfortable with these. Once you choose the parameters for these types of tools, you have essentially chosen the time frame, which is the ingredient that is missing with pennants, flags and such.
I personally am too concrete to trade subjectively. I make rules, and I follow them at all times, including when I feel like an idiot for following them. This can be done if you backtest enough to have faith in your system, and do not overparameterize it.
A moving average, a Bollinger band, an oscillator: these things I can understand. Once you have set some rules for what the parameters will be, these become objective. I am more comfortable with these. Once you choose the parameters for these types of tools, you have essentially chosen the time frame, which is the ingredient that is missing with pennants, flags and such.
I personally am too concrete to trade subjectively. I make rules, and I follow them at all times, including when I feel like an idiot for following them. This can be done if you backtest enough to have faith in your system, and do not overparameterize it.
