I know for a fact it will not stay consistent over time. No fixed system is ever successful over a long enough time frame. It will need to be tweaked and altered to the changing market.
Why does TA not work (for you)?
- Thread starter Xspurt
- Start date
I know for a fact it will not stay consistent over time. No fixed system is ever successful over a long enough time frame. It will need to be tweaked and altered to the changing market.
13 years and counting for me.....hopefully at least 20 more 
I think I finally understand what you're arguing and you are correct! Charts are absolutely not predictive. Nothing is predictive. No chart pattern or indicator or combination of patterns/indicators or news release or massive depth/height to which price has dropped/risen can predict with certainty what price will do next.
What you're missing, Surf, is that experienced, profitable TA traders DO NOT believe they can increase the odds on any individual entry.
The odds of any trading plan are based on what price has done in the past more often than not over a period of time that encompasses a wide variety of market conditions. A variety of market conditions includes strong trends with shallow pullbacks, channeling trends with deep pullbacks, wide ranges, narrow ranges, bull runs and bear runs.
When a student of PA/TA finds, through extensive and diligent documented research, that certain price and/or indicator patterns (setups) create a sufficiently profitable move to overcome the deficit of a logically placed stop loss (plus commission and slippage) more often than not, the student prepares a trading plan that describes the patterns, entry methods, and trade management techniques to exploit this edge.
The student trades these patterns (PA/TA) according to the plan.
Once the student overcomes the basic human instincts that interfere with success in the uncertainty of the trading environment, s/he eventually attains a mindset and reaches a level of experience with that mindset which results in consistent profitability.
This trader's mindset means you trade your plan despite personal bias/opinion, and you fully realize that:
1. Anything can happen
2. You don't need to know what is going to happen in order to make money
3. There is a random distribution between wins and losses for any given set of variables that define an edge
4. An edge is nothing more than an indication of a higher probability of one thing happening over the other
5. Every moment in the market is unique
- Mark Douglas, Trading the Zone
So I agree with you that charts are not predictive and I believe that you are right to alert any trader who believes s/he can increase the odds on an entry that this a very dangerous belief in trading.
Odds are based on X number of trades, not on any individual entry. A common complaint on ET is traders who have losing trades then skip the next appearance of their setup, and of course it's the good one. Picking and choosing trades from a basket of valid setups destroys any edge.
Sister ND...
I want to thank you for your participation and for all the good ideas you show in this post.
Thank you for reminding me of the 5 points from the writings of brother Mark Douglas. (One of the best trading books ever and one of the few that I would ever recommend to anyone.)
However, you are being waaaaay too kind, and in doing so, you are turning an otherwise good post into something I'm not sure you meant; or I read it incorrectly, or too quickly.
If one knows how to properly read a chart, the chart is definitely predictive---Note point 4, which you show from the writings of brother Mark Douglas.
That "edge" of higher "probability" is attained thru years of hard earned study/dedication.
Your charts are your compass.
That's why you are able, after all your efforts, to be able to properly read your charts so that they can "predict" for you which direction in which you should trade!
So, don't sell yourself short after all the work you have very obviously put into your craft.
Don't get me wrong about what I wrote above about you being too kind; kindness is usually a good thing!!
My brief story about trading...I began studying TA and made a lot of money at first and then lost it all, went to school to get a degree in quantitative finance, all the while trading here and there. Got a job trading prop -- did quite well then moved onto my own gig.
What tools do I use today? QA and TA, but I have to come realize, without absolute certainty, that my success in trading, or lack thereof, lies in my ability to either intuitively read charts (just a visual form of historical price), or my ability to read my number crunching models (just an output of historical data). There are times I will trade with my QA/TA analysis and times I will trade against it. When will I do which? If I had the answer to that I could hand you the holy grail.
As mentioned in an earlier post, the Holy Grail doesn't exist so the only way one can trading successfully is to possess intuitive talent or have the ability to acquire that talent. You either have a mind for the markets or you don't. It's really that simple..
Surf, with this simple post you have gained my utmost respect!
What tools do I use today? QA and TA, but I have to come realize, without absolute certainty, that my success in trading, or lack thereof, lies in my ability to either intuitively read charts (just a visual form of historical price), or my ability to read my number crunching models (just an output of historical data). There are times I will trade with my QA/TA analysis and times I will trade against it. When will I do which? If I had the answer to that I could hand you the holy grail.
As mentioned in an earlier post, the Holy Grail doesn't exist so the only way one can trading successfully is to possess intuitive talent or have the ability to acquire that talent. You either have a mind for the markets or you don't. It's really that simple..
Surf, with this simple post you have gained my utmost respect!
Thank you the1, very kind of you.
NoDoji,
Thank you for your very cogent and direct post. I still contend that you would find the same or similar success flipping a coin on whether to go long or short then applying your discipline, money management, intuition on the exit.
Van Tharp talks about this in his books and makes a compelling case....
NoDoji,
Thank you for your very cogent and direct post. I still contend that you would find the same or similar success flipping a coin on whether to go long or short then applying your discipline, money management, intuition on the exit.
Van Tharp talks about this in his books and makes a compelling case....
I'm on ignore with surf.
What he requested was done for over a year. It was done on ET.
I counted my current 3 ring binders that contain all the visuals for the draft text that has been written. There are 19.
I am going to a 3 day meeting soon. (over a month away). It is limited to 30 people and they will be in two rooms of 15.
All of this (A system of how the market operates) stems from a deduced proof using a HS its PM. Logic was used to flesh out what logic man spoke of as a three part trend. Trend parts are different and actually appear as interlocking fractals, all stemming from market granularity.
Between now and that meeting, the complete text will be polished and illustrated with real examples. Also there will be an appendix that contains the results of trading 10 accounts from now to the meeting dates.
90 days is insufficient to have an occurance of each of the trading possibilities that make up the whole. Notice I have used the word possibilities and I use it to explain a spectrum.
One thing I have found to be most important are the subsets of examples that fit the hypotheses in the HS. They are mutually exclusive, comp[lete, of like kind and do not overlap.
To reiterate.
What marketsurfer asked for happened and was of longer duration. the cummulative resutls were posted as well.
Here is my last comment (in this post).. Marketsurfer says he went through passing he CW based MTA study and tests. I feel sorry for him. His mind must be affected by the process. I notice he put me on ignore quite promptly. There is a haunting neuroscientific reason. marketsurfer will probably not go through the process that we witnessed here with Acruary (sp). If you get the chance follow acrurary's transition from where marketsurfer is all the way to where the correct answer lies.
the sum and substance of a complete system is that the market has no noise, no flaws and no anomalies. think about it, the market is a complete living system and it continually is subject to the toal finite possibilities, no matter how rare. All the combinations occur. Trends are defined by these possibilities.
Accurate trading based upon the system of the market allows any trader to take the full offer of the market.
No one who has worked a long time and been in the public eye wishes to have to change his perspective or viewpoint. No one is that important anyway, so it does not matter if time and scientific advancement pass a person or a belief system by and leave it by the wayside. What you all believe now is not the way it is going to be in a few years. I do not believe what you all believe. I am fortunate, indeed. For 54 years I have had a solution that sees no noise, no anomalies and no flaws in the sytsem of the market's operation. Granularity is the causal factor. Try taking granularity out of a market.
Good luck to marketsurfer. He asked for something that many many people have done. his request was insufficient, as well.