Wall Street = Casino. Minus Sum Game.

This is a discussion on Wall Street = Casino. Minus Sum Game. within the General Trading Chat forums, part of the T2W Archive category; Originally Posted by DionysusToast ...............TA may well give you a reason to enter - the problem is, if you don't ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Jan 17, 2010, 12:43pm   #92
 
barjon's Avatar
Joined May 2003
Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by DionysusToast View Post



...............TA may well give you a reason to enter - the problem is, if you don't even take a peek at the fundamentals, you would have to be a fool to place anything other than a day trade. Let's say TA gives you a perfect swing entry on the stock, yet in 3 days time that stock had an earnings announcement. Are you saying such an event should be ignored...............
dt

You're right, of course. No, I'm not saying that. I'm just saying that TA is a respectable way of deciding to take a trade. Even if you had ignored the upcoming earnings announcement of your example your TA would soon tell you what "the market" thought of it and help decide your exit.

To some extent I would argue that entering a trade is the easy part - you can do it with a coin toss if you want - albeit that a well-judged entry is important. For me anyway, the far more difficult skill is in managing the trade from there and deciding when to cut loose.

When I look to see how I differ from traders I know that are much more successful than me I find a much greater disparity in what they take from a trade (exits) than in where they decided to take that trade (entries). Their exits are much more elegant than mine, giving them smaller losses and greater gains.

good trading

jon
barjon is offline   Reply With Quote
Old Jan 17, 2010, 9:17pm   #93
 
DionysusToast's Avatar
Joined Dec 2009
Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread jon

I would hope that any newbies on board don't take your comment on upcoming earnings too seriously.

The earnings does move a stock and the guidance even more so. If you are in a stock and the earnings/guidance goes against you, the stock can easily gap up/down a few dollars right past your stop loss making toast of your risk profile for the trade. Of course at the earnings date, the big drop in price will tell you the earnings were crap - but your loss on the position will do as good a job as that. You can't trade in the rear view mirror.

If you tell me that you trade stocks across earnings dates based on pure TA alone, I simply wont believe it. I would believe that you made an off the cuff comment on earnings being predictable by TA but you'd only need to trade that for a few weeks before you changed your opinion. I know I did!

In my opinion, you absolutely cannot swing trade a stock with earnings coming up and get it right based on TA alone. This is gambing in it's purest form.

Now - I do know someone that trades an 8-figure account on earnings. He has 2 people working for him. Those 2 people do nothing other than build a picture for him of every stock that is about to announce earnings. These 2 people have no training at all in either fundamental analysis or technical analysis. He tells them what kind of info to collate, how to analyze it & then give him the information. All of the information they look at is things you would not see in the price chart - short info, peer performance, insider info and a bunch of other stuff. They build a picture of the stock and then make a call on which way earnings will go. To say he's a succesful trader would be an understatement.

Me - I stay clear of earnings dates because they are too unpredictable for me. This is something someone else does very well but that doesn't mean I should jump on it. I can't follow what someone else does. I need to have my own niche.
__________________
I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

Humphrey B Neill - 1931

Last edited by DionysusToast; Jan 17, 2010 at 9:38pm.
DionysusToast is offline Software vendor   Reply With Quote
Old Jan 17, 2010, 10:53pm   #94
 
barjon's Avatar
Joined May 2003
Re: Wall Street = Casino. Minus Sum Game.

dt

You got me wrong again. I did start off by saying you were right!! I then said "Even if you had ignored .....". I certainly wasn't advocating trading shares across earnings based on TA. Yes, I use TA but, like you, I steer clear of earnings dates as well as other important announcement dates.

good trading

jon
barjon is offline   Reply With Quote
Old Jan 17, 2010, 10:56pm   #95
 
DionysusToast's Avatar
Joined Dec 2009
Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread Sorry Jon - I'm only posting at this time 'cause of jet lag.

I have a habit of disagreeing with people that agree with me...
__________________
I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

Humphrey B Neill - 1931
DionysusToast is offline Software vendor   Reply With Quote
Old Jan 17, 2010, 11:00pm   #96
Joined Feb 2008
Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by DionysusToast View Post
the problem is, if you don't even take a peek at the fundamentals, you would have to be a fool to place anything other than a day trade.
And there's the rub. You are aware that some people do actually day trade? And use exclusively TA for it. Yet you dismiss pure TA across the board.
Xeno is offline   Reply With Quote
Thanks! The following members like this post: zupcon
Old Jan 17, 2010, 11:29pm   #97
Joined Nov 2008
Re: Wall Street = Casino. Minus Sum Game.

Quote:
Originally Posted by DionysusToast View Post
jon

I would hope that any newbies on board don't take your comment on upcoming earnings too seriously.

The earnings does move a stock and the guidance even more so. If you are in a stock and the earnings/guidance goes against you, the stock can easily gap up/down a few dollars right past your stop loss making toast of your risk profile for the trade. Of course at the earnings date, the big drop in price will tell you the earnings were crap - but your loss on the position will do as good a job as that. You can't trade in the rear view mirror.

If you tell me that you trade stocks across earnings dates based on pure TA alone, I simply wont believe it. I would believe that you made an off the cuff comment on earnings being predictable by TA but you'd only need to trade that for a few weeks before you changed your opinion. I know I did!

In my opinion, you absolutely cannot swing trade a stock with earnings coming up and get it right based on TA alone. This is gambing in it's purest form.

Now - I do know someone that trades an 8-figure account on earnings. He has 2 people working for him. Those 2 people do nothing other than build a picture for him of every stock that is about to announce earnings. These 2 people have no training at all in either fundamental analysis or technical analysis. He tells them what kind of info to collate, how to analyze it & then give him the information. All of the information they look at is things you would not see in the price chart - short info, peer performance, insider info and a bunch of other stuff. They build a picture of the stock and then make a call on which way earnings will go. To say he's a succesful trader would be an understatement.

Me - I stay clear of earnings dates because they are too unpredictable for me. This is something someone else does very well but that doesn't mean I should jump on it. I can't follow what someone else does. I need to have my own niche.
A basic principle of trading on the basis of TA is to stay out of market when earnings are due out.....for obvious reasons. Now, after earnings are out TA can be used to enter a position...entry when price retraces to a moving average etc....its not a case of one or the other of TA / fundamentals being right or wrong, both can be effective when used at the right time and in the right way...
Prawnsandwich is offline   Reply With Quote
Old Jan 17, 2010, 11:30pm   #98
 
DionysusToast's Avatar
Joined Dec 2009
Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread I day trade too. Guess what I use to identify which stocks will be movers for the day ?

That's right... fundamentals.

Guess which types of stocks I don't trade around 10:30am est on Wednesdays ????

Anyway - the point about TA is this:

- There is an industry geared around taking money from traders.
- The same industry is teaching you to trade using pure TA
- Most teachers of TA are not profitable traders

Books exist to sell books
Trainers exist to sell training
Brokers exist to charge fees
Market makers/specialists exist to take the spread (ok - simplified)
Web sites/forums exist to sell courses/advertising

With all of the money they are taking from investors - what makes you think they want to reduce the pot by telling you what it would take to be consistently profitable ?

Why is no-one talking about the drivers behind a rush of selling & buying ? Why is all the focus on TA ?

Why not take away the distinction between technicals & fundamentals and take a holistic approach ?

1 - people think it's too hard
2 - you won't be encouraged to because, it will generate less trades/fees & you may start taking money from the house
__________________
I cannot see., however why we should expect to find a "system" which will work in the stock market; surely the possibilities of profits for the student justify the time and effort required to learn market interpretation.

Humphrey B Neill - 1931
DionysusToast is offline Software vendor   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
Zero sum game ? tar General Trading Chat 22 Jul 9, 2009 2:45pm
Wall Street virtual stock trade game mellkolse General Trading Chat 0 Jul 1, 2009 6:02pm
forex zero sum game Christiaan General Trading Chat 18 May 27, 2009 4:45pm
Wall Street virtual stock trade game wallsctockbe General Trading Chat 6 May 21, 2009 9:52am
Wall Street virtual stock trade game wallsctockbe Stocks 0 May 20, 2009 5:32pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)