Why does TA not work (for you)?

marketsurfer · Aug 13, 2012

Quote from R. Raskolnikov:

Oh, now we are getting somewhere...when the SYSTEM presented a setup. You left that out.....and what did this system look at when creating a trade opportunity?

Locked markets and arbitrage.

surf

marketsurfer · Aug 13, 2012

Quote from d08:

Works for me.
You seem to assume TA is just about MACD crossings or Stochastic highs and lows, it actually requires you to look at the price in relation to the indicators.

Subjectively, right? You need to use intuition/skill to "read" the chart.

right?

surf

R. Raskolnikov · Aug 13, 2012

Thanks for answering the question. See, no method is just pushing a button. Something has to be setting up or presenting an opportunity. You don't just have a bunch of traders hitting keys whenever they feel like it.

Quote from marketsurfer:

Locked markets and arbitrage.

surf

marketsurfer · Aug 13, 2012

Quote from R. Raskolnikov:

Thanks for answering the question. See, no method is just pushing a button. Something has to be setting up or presenting an opportunity. You don't just have a bunch of traders hitting keys whenever they feel like it.

Man, this is difficult. For the trader, all it was, was hitting a button. The program we used was 5 years ahead of its time and quite complicated--- Ask Rearden Metal and DJericross t hey traded for this firm, also. surf

NoDoji · Aug 13, 2012

Quote from dv4632:

I don't know. It must come down to real-time execution. Maybe it's poor pattern recognition on my part?

It may not be poor pattern recognition so much as wrong pattern recognition. Once you learn to pick positive expectancy setups off an after-the-fact static chart, you then have to learn to recognize them at the right edge of a real-time chart. It's very different.

It's really easy to see the setups after the fact, but difficult in real time because we learn from books and web sites that show everything on static charts after the fact. How many books/sites have you seen that show these patterns at the hard right edge? I don't know of any.

What I did personally is I captured screen shots of my chosen setups at the right edge of a live chart and printed them out and studied them until they were ingrained in my mind's eye. You then learn to recognize and trust your setups in real time when they look "scary".

Quote from dv4632:

Also, not all traders have clear mechanical rules. With some it's more like general guidelines. I've had a lot of conversations with Cornix and he is a good example of such. Sometimes I'll ask why did you exit there, or why didn't you take this trade, and he'll have replies like "it looked like price was stalling" or "I didn't like the look of the price action". Those statements are hard to quantify. I don't think he has a checklist on his trading desk saying if A then B else C. So while he is trading simple setups, the actual execution of it is more organic and nuanced. It is helpful advice I get from him of course, but there is no simple answer to some questions.

The gut feel is based on pattern recognition that's been internalized and it comes across as pure intuitive trading. It's based on quantifiable patterns, though. And it's not necessarily just chart patterns; it could be patterns of size hitting the tape and price's reaction to that; it could be the mind subconsciously drawing trend lines/channel lines of S/R. It could be memory of a key level from several days earlier.

While I was developing my trading plan, I Skyped with a small group of traders every day, all day. When someone asked me "Why'd you take that setup, but not this one, they look about the same?" I wanted to find a quantifiable reason for it, because I thought it was just gut feel similar to what CF says. But I was able to quantify where that gut feel came from and by doing that I honed my trading plan further. Now I have exact price levels in my head at all time, so what may appear totally random to an outside observer has a precise reason that I have in the form of a written plan.

d08 · Aug 13, 2012

Quote from marketsurfer:

Subjectively, right? You need to use intuition/skill to "read" the chart.

right?

surf

No, completely objectively. I meant looking at the price/indicator relationship when developing the system.

marketsurfer · Aug 13, 2012

Quote from d08:

No, completely objectively. I meant looking at the price/indicator relationship when developing the system.

Program and automate it. Why any human interface at all?

cornix · Aug 13, 2012

Quote from marketsurfer:

...an insidious market designed deception at worse.

Well if that's so and someone intentionally traps people into TA setups, it's the greatest news ever for a TA trader, because it means behaviour of those who try to trap people can be "cracked" and parasitized upon.

marketsurfer · Aug 13, 2012

Quote from cornixforex:

Well if that's so and someone intentionally traps people into TA setups, it's the greatest news ever for a TA trader, because it means behaviour of those who try to trap people can be "cracked" and parasitized upon.

You are smarter than the market? Why not start a before the fact journal, like I have, to show how you exploit these edges? ( pretty charts and would of, could of, should of don't count) real time, before the fact calls only-- like in surf's special situation journal.

surf

d08 · Aug 13, 2012

Quote from marketsurfer:

Program and automate it. Our lives are only so long, why waste them in front of screen with objective methods?

I prefer the "hands-on" approach to verify the raw input data is correct because any faults on that end will ruin the results. Also, I do not consider it wasting my life as I develop new ideas and improvements with screen time. And besides, it's not like I could party on yachts all day with my results either.