Why does TA not work (for you)?

Quote from logic_man:

It does seem like some of these anti-even-the-possibility-of-working-TA posts assume there are only two classes of traders:

1. Extreme "insiders" who control the markets and make a ton of money

2. Everyone else

Talk about simplistic.

I have worked out a price action system where I am what I think of as "the smartest dumb money". I never try to catch an exact top or bottom and it works just fine. I hit a lot of singles and doubles and the occasional home run and I rarely strike out (my winning percentages are typically in the mid-60% range) and my average win is nearly twice the size of my average loss.

So I totally agree with you that this type of trading is viable and can be done just by watching the tape and price movements.
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In my experience over the years of working on trading desks the guys that trash other methods are usually losing traders. They fail at their own trading and want others to join them in Club Failure. They figure that if they can't succeed, others shouldn't either. Surf obviously fits this to a tee. IF he was a good trader and had a strategy he would be trading and not trying to raise money/write articles about it. Those who can trade.....well........THEY TRADE.

Like you, I am a price action trader. I have friends who trade on fundamentals, and while it's not for me at the end of the day if they do well with it that's all that matters. Saying that what they do is just guessing would be ridiculous.


Any new traders out there should read this and memorize it. Logic Man just handed you the path to a long and very successful trading career, With a mid 50's to 60% win clip and a 2-1 biggest win/loser ratio you will make a ton:

"I never try to catch an exact top or bottom and it works just fine. I hit a lot of singles and doubles and the occasional home run and I rarely strike out (my winning percentages are typically in the mid-60% range) and my average win is nearly twice the size of my average loss."
 
Quote from logic_man:

You know, I thought about it a little more and I think the time you enter it does matter for priority on your broker's server.

At least, when I enter an order, there flashes up a number and it is always the letter "N" and then a number following it, and the number is usually a number near the beginning of the positive integer series, i.e. 1,2,10,33 or something similar and the earlier I put in the order, the lower the number. I think that is your priority for being sent as a limit order to the exchange. From there, I guess it is just a race between your broker's ability to send limit orders and another guy's broker.
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I am actually working on something with the guys at TT for my own stuff and am going to ask them about it. I guess it comes down to how fast your broker gets the order into the TT book.

But I have had stop orders in very thin markets (RBOB gas) where my stop limit was sitting there, the bid/offer moved right across my stop without trading which means I had no order on the CME/Nymex exchange until the stop price was executed. So whether that order was entered 5 min ago or 3 hours ago, I don't feel it makes a difference. But if my broker has a bunch of stop limit orders at that price, then it would make sense that time priority would kick in.
 
Quote from traderchi128:

In my experience over the years of working on trading desks the guys that trash other methods are usually losing traders. They fail at their own trading and want others to join them in Club Failure. They figure that if they can't succeed, others shouldn't either. Surf obviously fits this to a tee. IF he was a good trader and had a strategy he would be trading and not trying to raise money/write articles about it. Those who can trade.....well........THEY TRADE.

Like you, I am a price action trader. I have friends who trade on fundamentals, and while it's not for me at the end of the day if they do well with it that's all that matters. Saying that what they do is just guessing would be ridiculous.


Any new traders out there should read this and memorize it. Logic Man just handed you the path to a long and very successful trading career, With a mid 50's to 60% win clip and a 2-1 biggest win/loser ratio you will make a ton:

"I never try to catch an exact top or bottom and it works just fine. I hit a lot of singles and doubles and the occasional home run and I rarely strike out (my winning percentages are typically in the mid-60% range) and my average win is nearly twice the size of my average loss."
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I agree. Everyone has their role in life and some people's role is to be a failed trader.

When I first tried trading, I wanted to be right all the time. I still do on some level, but I can take losses with relative ease now and a winning percentage at those levels is OK. In fact, I kind of dislike winning streaks because they get me to thinking I can be right all the time and that is a dangerous way for a trader to think. But, when I start worrying about being right all the time, what usually happens is that I will either skip trades or exit profitable trades early so they don't turn into losses. Both of these things end up costing me money but at least I am not letting losses run, which is death because they can just keep on running.
 
Quote from traderchi128:

I am actually working on something with the guys at TT for my own stuff and am going to ask them about it. I guess it comes down to how fast your broker gets the order into the TT book.

But I have had stop orders in very thin markets (RBOB gas) where my stop limit was sitting there, the bid/offer moved right across my stop without trading which means I had no order on the CME/Nymex exchange until the stop price was executed. So whether that order was entered 5 min ago or 3 hours ago, I don't feel it makes a difference. But if my broker has a bunch of stop limit orders at that price, then it would make sense that time priority would kick in.
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Yes, I have had that same thing happen with a thin market and a stop limit. That was when I was doing some trading on the ES contract which wasn't front-month. I reassessed that trading idea and dropped it, so now I am always on the front month.
 
I love this thread coz, even thought it has not turned out the way I wanted, it sure has exposed a cart load of dumb ideas about what TA is and how it works by non TA users. The bashers claim the level of expertise in analysis to be able to prove TA can't work but won't demonstrate TA failures.

If it was a coding error and I was a coding whiz I would say, look here - that's the error and this is why you are wrong. But I'd have to be top of the class in coding.

If it was a math error and I was a math whiz I could demonstrate the error. But I'd have to be top of the class in math.

So if you want to say TA doesn't work, you need to be like surf. You need to be someone who was using TA for years but then discovered it didn't work. Then you can step up to the plate and show the errors on TA.

I'm still waiting guys. Instead of talking up your superior knowledge, show me how TA fails. Instead of fishing for ideas under the pretense of provocation, instead of telling me, show me.

It's doubly suspect when TA bashers want to invade EVERY TA thread and put us right on out mistaken belief. Frankly I don't have time to spend my life in threads that have no relevance to what I do because I have something that works.
 
I heavily rely on TA. The indicators are quite simple really. TA is not some holy grail. TA doesn't necessitate for some future event to happen.

That said, I do find it to be a great risk-management tool.
 
Those were hilarious 20 pages (since I left) to read... Especially recommending stop-limit orders to trade CL thus almost guaranteeing one a non-fill on the best momentum moves. :D
 
Quote from cornixforex:

Those were hilarious 20 pages (since I left) to read... Especially recommending stop-limit orders to trade CL thus almost guaranteeing one a non-fill on the best momentum moves. :D
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Yip and if you are a volume trader you can cause a false break out of a TA pattern (ex. triangle) by using a limit order. Computer trading algos are so fast they will jump on your order in less that 1 second and make sure you only get a partial fill. Then when they see you are not trading the break out the market reverses back to the pattern allowing you to buy back to the level again.

But then if you have never traded volume you will never have seen that.
 
Quote from kingjelly:

Wow.... do you even know how a stop limit works??? If you set it to only accept only a tick or two of slippage it will skip over you and never fill... if it quickly comes back down and does fill you then the breakout will likely fail and your stuck...'in theory' yes it does solve the problem..in practice...not so much
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Buy stop and sell stop entry orders can just as easily pull back after taking you in and stop you out. If you set a stop limit order with no slippage, yes, you can get skipped over, but if you're laying out a spread of them spaced enough apart and the move is for real, you'll get enough triggers for the run to have a very good average-in.

I will use them for a spread of entries after an initial buy/sell limit pullback entry. If the trend is super fast, I could argue just as easily that the 1st stop add-on can get pulled up to where the 2nd add-on is waiting and then price decides to rest. Now you've got the problem of a much higher average cost with 3 entries where if you had gotten skipped with the 1st add-on, you're in a much better position for holding onto the trade.

When the CL is moving well, "spread adding" with stop limit orders works great, regardless of missed ones in "the net". Go in a sim account and average against a strong move in 10-15 tick intervals with 1 contract for each position. Watch your account erode with no hope of breaking even for the move. Or, do the opposite with a $120 avg cost stop loss after the 1st add-on and the light will come on that you can do extremely well with mundane winning pcts.

The light is this: winning pct and RR ratio always have an inverse relationship over the longer term as The Law of Large Numbers kicks into your system.
 
DATE MKOP T= W/L WIN%
8-2 UP 1.5 27/3 90%
8-3 UP 1.5 18/1 95%
8-6 DWN 1.0 18/1 95%
8-7 UP 1.5 35/8 81%
8-8 DWN 1.5 47/1 98%
8-9 DWN 1.0 24/2 92%
8-10 DWN 1.0 25/1 96%
8-13 DWN 2.0 33/0 100%
8-14 UP 2.0 37/1 97%
8-15 DWN 2.0 34/1 97%
8-16 UP 2.0 35/2 94%
8-17 UP 1.0 19/0 100%
8-20 DWN 2.0 24/3 89%
8-21 UP 1.5 18/0 100%
8-22 DWN 1.5 22/1 96%
 
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