Why Is The Obvious Not So Obvious?

[Onra]

I saved some of the old pics, years ago. They weren't helpful, and some even had crazy lines drawn all over them to mock TA gurus. Here is one of my favorites.

Wide Tailz, can you save me another year looking at nonsense...?
4 old pics; is there anything of value here?

 

[The Obvious]

As I said, there is another way, which 'riskfreetrading' eluded to in point (3) of his "obvious but not obvious".

https://www.elitetrader.com/et/threads/why-is-the-obvious-not-so-obvious.151802/page-51#post-2380268

Oh, and joining a strong trend definitely satisfies his point (5).

Combine 3&5 with repetition, point (4), and you'd have something like the attached.

This is kind of what trend follower hedge funds and CTAs do. They trade a bunch of uncorrelated assets (commodities, stock indices, currencies, bonds), going long or short whenever their systems detect a directional trend.

There are also similar momentum strategies for individual stocks based on "relative strength". Basically, buying winners (stocks that have gone up the most in the past few months) and shorting losers.

 

[odlareg]

Would you say you look at your operations as trading AGAINST the retracement traders? Could you also do what you do and trade AGAINST BO traders?

If this question makes no sense, pls ignore.

Never and Never, maybe RT = BO?

GO

 

[Pelt]

Never and Never, maybe RT = BO?

GO

GO,

What I mean is...

If you look at a candle, it has an Open, High, Low and Close. It also has a body and wicks. The only way that candle forms, is there are traders that create the body(imagine traders moving price AWAY from its initial OPEN and reference point)... and there are traders that create the wicks, as they are trading the reversal from the extremes of the candle.

As I see it, there is no other way a candle can be created?


In a similar fashion, I was thinking about your situation.... composed of BO traders(breakout), and RT traders(retracement).

So in the case you gave earlier... you can imagine a range, whereby most of the time, its batted up and down, primarily RT traders. Above and below this range are stops of those RT traders, along with pending entries for BO traders.

Also, I've heard it before, that we don't really trade the market, but rather our beliefs ABOUT the market. My question was essentially, was it your belief that you were trading AGAINST those traders that either had stops OUTSIDE of this small range, and WITH the BO trader's pendings OUTSIDE of this small range?

It's not a big deal... I guess I was just wondering if this was your rationale for placing a trade.

 

[Vindago]

Pelt, what happens once price exit the range? wouldn't that be the best space to trade?

 

[Pelt]

Pelt, what happens once price exit the range? wouldn't that be the best space to trade?

'best'... not sure? Was under the impression it depends on what you're trying to do? 90/10

 

[odlareg]

GO,



My question was essentially, was it your belief that you were trading AGAINST those traders that either had stops OUTSIDE of this small range, and WITH the BO trader's pendings OUTSIDE of this small range?

Fair question Pelt,

If you put it this way I trade with the BO. But preferably when the range has almost dissapeared. And the volume too has dissapeared.

GO

 

[Wide Tailz]

Wide Tailz, can you save me another year looking at nonsense...?
4 old pics; is there anything of value here?View attachment 275046

Nothing in those pix is obvious, aside from someone trying to describe the past to give the illusion you can predict the outcome in a chaotic (open ended) system. And speaking from my own experience, whenever I tried doing the same, it ended in humiliated confusion, almost smashing equipment in anger!

 

[odlareg]

 

[Pelt]

GO,
Curious image you have there