what do prop firms teach as primary methods of entering trades? do they all teach the same approach?
"Why Technical Analysis is Nonsense"; Views?
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ask don bright for details. i am not an expert on prop models, but suffice to say, have spoken to enough of them to know TA is a minor, very minor part of their trading.
surf
Thanks!!
you don't believe in TA either? what do you use?
again, TA is not all squiggly lines
if you are doing pairs trading, that is to a large extent a study of price relationships.
that falls under T
from what i have read of bright, he does mostly pairs stuff.
again, many people get this impression from reading all the retail squigglylinemacdrsigeeniftykeen posts that TA = chart patterns (i don't use them), or indicators (ditto). but i still use TA.
market profile = TA
key reference area = TA
etc.
again - fundies are the underlying reasons why price SHOULD be X, but is Y. you buy when the underlying reasons tell you the market has mispriced an asset.
TA is buying based on price qua price. iow, you are not so much looking for the underlying reasons why price is currently X, but you are buying at X, because whatever methodology you are using tells you that you can buy there with reasonable risk/reward (institutional buying appearing, price at a key reference area, etc. etc.)
the sooner you get away from the assumption that TA = INDICATORS, the better off you will be
if you are doing pairs trading, that is to a large extent a study of price relationships.
that falls under T
from what i have read of bright, he does mostly pairs stuff.
again, many people get this impression from reading all the retail squigglylinemacdrsigeeniftykeen posts that TA = chart patterns (i don't use them), or indicators (ditto). but i still use TA.
market profile = TA
key reference area = TA
etc.
again - fundies are the underlying reasons why price SHOULD be X, but is Y. you buy when the underlying reasons tell you the market has mispriced an asset.
TA is buying based on price qua price. iow, you are not so much looking for the underlying reasons why price is currently X, but you are buying at X, because whatever methodology you are using tells you that you can buy there with reasonable risk/reward (institutional buying appearing, price at a key reference area, etc. etc.)
the sooner you get away from the assumption that TA = INDICATORS, the better off you will be
"Ok, how is it, we never hear from these"pure price" readers, who are so freaking wonderfull and amazing......why is that?"
who referenced these as being wonderful and amazing.
"Bucketfulls of people saying TA is garbage,"
sure. look. i will say again, MOST traders will lose (in regards to not beating the averages) REGARDLESS of whether they use TA *or* fundies... especially when you take into account RISK ADJUSTED RETURNS (Which are all that matter)
that's not because TA is garbage, or fundies are garbage. it's because trading is not easy, and most will fail. REGARDLESS of methodology.
" let's assume tape reading, or price bar patterns OR behaviour are not TA"
except they ARE
setting up a false dichotomy strawman does you no good.
", equally wonderfull, so where are they?"
do you honestly think that traders who spend hundreds of hours studying trading, and becoming profitable *usually after losing a lot of money* are going to tell you how to trade for free (NOT to mention that the "how" is still not going to make you successful).
think of it this way. the vast majority of retail traders lose money using TA. hint: don't do what the LOSING trader does. much of our psychology is hardwired through evolution. overcoming that and trading dispassionately, and going AGAINST many of our survivial instincts is difficult. most traders concentrate on indicators, when they should concentrate on psychology, money management, risk control, etc. most traders concentrate on entries, when exits are MORE important. most traders ignore the non-sexy stuff (research, management, analysis of past trades) and just want to press buttons like crack addicted nimrods.
and you blame TA?
who referenced these as being wonderful and amazing.
"Bucketfulls of people saying TA is garbage,"
sure. look. i will say again, MOST traders will lose (in regards to not beating the averages) REGARDLESS of whether they use TA *or* fundies... especially when you take into account RISK ADJUSTED RETURNS (Which are all that matter)
that's not because TA is garbage, or fundies are garbage. it's because trading is not easy, and most will fail. REGARDLESS of methodology.
" let's assume tape reading, or price bar patterns OR behaviour are not TA"
except they ARE
setting up a false dichotomy strawman does you no good.
", equally wonderfull, so where are they?"
do you honestly think that traders who spend hundreds of hours studying trading, and becoming profitable *usually after losing a lot of money* are going to tell you how to trade for free (NOT to mention that the "how" is still not going to make you successful).
think of it this way. the vast majority of retail traders lose money using TA. hint: don't do what the LOSING trader does. much of our psychology is hardwired through evolution. overcoming that and trading dispassionately, and going AGAINST many of our survivial instincts is difficult. most traders concentrate on indicators, when they should concentrate on psychology, money management, risk control, etc. most traders concentrate on entries, when exits are MORE important. most traders ignore the non-sexy stuff (research, management, analysis of past trades) and just want to press buttons like crack addicted nimrods.
and you blame TA?
2 cents from a newbie
An analogy:
TA is like your wife getting pissed and smacking you in the head
The fact that she smacked you is clearly an indicator (most likely that she is pissed)
This is useful knowledge.
But if you can determine what pissed her off in the first place - maybe you can avoid getting smacked, and maybe get laid instead.
An analogy:
TA is like your wife getting pissed and smacking you in the head
The fact that she smacked you is clearly an indicator (most likely that she is pissed)
This is useful knowledge.
But if you can determine what pissed her off in the first place - maybe you can avoid getting smacked, and maybe get laid instead.
I can say this, I can come up with better entries than what Surf comes up with on average, he is in strong opposition to conventional TA so he uses his prop indicators, whereas I use standard MACD histogram with standard settings. What works for some will not necessarily work for others. If your win/loss ratio is over 50% consistently then I would gladly wave a V to a person that tells you that your trade decisions, if TA based, are nothing but coin tosses. Reading charts is like chess in many aspects, both an art form and a constant mathematical study of probability. 
Great post overall, i guess the quote feature didnt work so good.
To elaborate, the ta bashing crowd said they were so good, if they can do better great, but this thread is about ta bashing.
I did no such thing, strawman wise-as a self proclaimed technical charting guru, of course i would be baffled by someone saying tape reading or order flow etc is technical analysis, i would say it isnt, just where do you draw the line-working with no data at all, ever?
What on earth would you call it, for that matter, yet number crunching -backward looking extrapolating black box's are, remarkably, in the eyes of many, "better" than TA, whatever it actually is.
This isnt directed at you, i just feel like a rant;
Lagging indicators.....so? Your not supposed to be FOLLOWING the damn things, like a computer program, as a matter of course, they are supposed to TELL you something about current price behaviour, is it sustainable, is it just a spike, is it a seriously abnormal gap, is it true trending behaviour, is it-too volatile to consider it a reasonable risk, or should my approach and risk tolerance change completely, based on what my technicals are saying.
Despite the fact they lag, or can, it seems the fact they are supposed to tell you something about price behaviour is lost on many.
If you happen to have a programmer in your back pocket, well thats great, but not everyone was born with a silver spoon or a leg in to the nefarious and clearly unreliable world of the street, and btw, if you ever spent time backtesting technical strategies, your a dumbass looking for easy answers, you geek.
Yes, clearly there are many personalities here and some are "looking for easy answers", in fact often these "TA" threads are nothing more than newbies trying to shortcut the learning process.
The bottom line for "TA" is well known. TA is a set of tools, no different really from a set of physical tools found in a cabinetmakers workshop...The tools themselves are inert, they just sit there..it is the skill and experience of the cabinetmaker that makes a fine cabinet, or piece of furniture. The "price" of the product the cabinet maker produces reflects the time and hard work put into learning how to use the tools. Some woodworkers are fine artists using only hand tools, some use power tools...each capable of making something exceptional. The same can be said of skilled market professionals. We read about those who have taken the time to learn HOW to select and use various tools and the great results become part of our conversation.
Personally I suggest that newbies start at the beginning and learn to use the basic tools necessary to research. These include some spreadsheet skills, some basic programming, observation of various markets and then deciding on a specific area of interest like futures indexes, or some part of the equities or debt markets, perhaps currencies or interest rates. Whatever it is that interests you, take the time to become a skilled observer of a single market. If you learn enough about a market and you develop these basic skills eventually you will know how to pick the correct tools and how to use them to get a positive result. The most important skill for a beginner is dispassionate critical thinking. Take in everything without becoming impressed or attached. The rest follows in time.
Good luck
Steve
The bottom line for "TA" is well known. TA is a set of tools, no different really from a set of physical tools found in a cabinetmakers workshop...The tools themselves are inert, they just sit there..it is the skill and experience of the cabinetmaker that makes a fine cabinet, or piece of furniture. The "price" of the product the cabinet maker produces reflects the time and hard work put into learning how to use the tools. Some woodworkers are fine artists using only hand tools, some use power tools...each capable of making something exceptional. The same can be said of skilled market professionals. We read about those who have taken the time to learn HOW to select and use various tools and the great results become part of our conversation.
Personally I suggest that newbies start at the beginning and learn to use the basic tools necessary to research. These include some spreadsheet skills, some basic programming, observation of various markets and then deciding on a specific area of interest like futures indexes, or some part of the equities or debt markets, perhaps currencies or interest rates. Whatever it is that interests you, take the time to become a skilled observer of a single market. If you learn enough about a market and you develop these basic skills eventually you will know how to pick the correct tools and how to use them to get a positive result. The most important skill for a beginner is dispassionate critical thinking. Take in everything without becoming impressed or attached. The rest follows in time.
Good luck
Steve