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 Mr. Charts Since you mention a comment of DT's about me, I thought an illustration might help ...

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Old Jan 27, 2010, 1:58am   #209
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Mr. Charts View Post
Since you mention a comment of DT's about me, I thought an illustration might help illuminate.
Unfortunately I was away helping someone with the live market in the very early part of the afternoon so I wasn't trading for myself but spotted a story PRE-MARKET about BKS which added it to the watch list for the day.
There was no prior TA sign whatsoever of the move that happened once the market opened, which proves DT's point that TA alone is not the whole picture. And DT is correct !
TA however enabled people to spot a possible move BEFORE it happened and many profited as a consequence of trading the TA of the move itself. As I said, I wasn't trading then but hey, there will be other opportunities tomorrow
One picture worth a thousand words sometimes.
Richard
And a lovely runner it was too.

Sadly, I got there late but still managed to get 40c out of it.
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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.

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Old Jan 27, 2010, 2:01am   #210
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Xeno View Post
then consider a 1 min cable strategy, fully automated, pure TA, that has a rule to stay out of the market a few mins either side of 9.30, 10, 12, 13.30. Let's say the rule only exists because backtesting showed that volatility was too high at those times. Pure TA....
These systems only exist in someone's imagination.
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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
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Old Jan 27, 2010, 2:02am   #211
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Prawnsandwich View Post
Not sure I understand - you say that there was no prior TA sign whatsoever of the move, but then go on to say that TA enabled people to spot a possible move BEFORE it happened ?
In this case, the driver was there, that got you LOOKING at the stock. Order flow told you when the move starter and when it was coming to an end way before it appeared on the chart.

Quote:
Surely watching out for news stories such as this, keeping an eye on the premarket gainers or opening gap ups / large gainers with reference to the opening charts would be a standard part of a TA trader / day traders method ? You would not need to study or understand any aspect of the Fundamentals of the company to do this. You could just look at premarket volume, gainers, opening gainers etc.
I would agree that this does give you potential movers for day trades.

On top of this, some understanding of the market is required. For instance, the role of the market maker/specialst and how he makes money, when he loses money and how and WHERE he may attempt to recoup those losses is important. This in my opinion is not TA. It is knowing your market.

I would also say that day trading has more to do with order flow and could be considered more technical - but it is NOT about trading chart setups.

TA generates book revenues, training revenues, web site hits, broker fees and unprofitable traders.

In fact, it stands to chance that even within this thread - most all of the defenders of 'it's all in the charts' are also not making money from it.

The concept of confluence is an amusing one. The more indicators saying the same thing, the more likely the move, right ? Well - considering that all of the indicators are based on the same set of data, surely them all indicating the same thing is to be expected. This doesn't make a prediction based on them any more likely to be correct.
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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

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Old Jan 27, 2010, 2:36am   #212
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post
These systems only exist in someone's imagination.
I assure you, these systems exist, I take absolutely no account of fundemental analysis, news releases, and I use zero discretion. I probably take more trades in a day than most traders using FA take in a year. My results are statistically significant, I doubt many traders trading based on FA can say the same.
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Old Jan 27, 2010, 7:33am   #213
 
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by Prawnsandwich View Post
Not sure I understand - you say that there was no prior TA sign whatsoever of the move, but then go on to say that TA enabled people to spot a possible move BEFORE it happened ?
A TA purist would not have been looking at the rumour that Barnes & Noble were going to have their app on the new Apple Tablet.

This thread is in danger of turning into Panto.

So what is it that TA is supposed to tell us ? Is it Supply and Demand scenario ? If so, why is it that TA does not distinguish between markets with finite supply and those with infinite supply ? Stocks have a finite float whereas futures do not. This has an impact on how the price moves. How is it that TA provides a global framework considering such different supply scenarios ?

Is TA telling us about market psychology ? If you look at 2003, you can see a lot of market swings in the build up and after the inception of the Iraqi war. If TA is meant to reflect market psychology. It would make sense that the specific psychology in play at that time would be irrelevant to todays markets. The patterns and support/resistance zones made in that period would effectively be meaningless. How many TA people that backtest take this into account ? What about other, similar periods where some crisis was driving the markets.

TA purists may be using discretion about the current geopolitical/news situation to make decisions but how many look at past data in context ? How can it be necessary to use todays news but not necessary to use the news on the past charts you were looking at

Finally - what on earth is the explanation to esoteric stuff like Fibonacci ? Numbers that occur in nature ?

I would venture that if most home traders traded off moon cycles, then you'd see thousands of ebooks, courses and instructors teaching the merits of astrology for trading.
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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

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Old Jan 27, 2010, 1:15pm   #214
 
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Re: Wall Street = Casino. Minus Sum Game.

Originally Posted by Prawnsandwich
"Not sure I understand - you say that there was no prior TA sign whatsoever of the move, but then go on to say that TA enabled people to spot a possible move BEFORE it happened ?" says prawnsandwich

"A TA purist would not have been looking at the rumour that Barnes & Noble were going to have their app on the new Apple Tablet." says DT

DT is correct.

I read news stories prior to market open and decide to put some of them on my watch list. That also consists of other stocks chosen for different reasons. I then watch and wait for one of the dozen set ups I use to occur and then read order flow and prints and buy/sell pressures on depth of market looking for an entry where the probability is high that the trade goes into immediate profit.
Even using simple TA there was money to be made on BKS. Doing what I do frequently puts me ahead of the game, a powerful edge.
It's a combination of the right tools at the right time in the right way. That, imho is the essence of what DT is saying (correct me if I'm wrong, DT ) and he is correct; not just in my opinion, but in my experience of trading for a living for the last ten years. That is not to denigrate what anyone else does (well, maybe I should make exceptions of fcta and everyonerich )
Richard
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Old Jan 27, 2010, 2:04pm   #215
 
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Re: Wall Street = Casino. Minus Sum Game.

DionysusToast started this thread That's right richard - you got my point.

I think that a mix is required. I would say that the succesful TA traders may be less pure TA than they think. They more than likely get to know the markets they trade.

Anyone trading corn contracts and seeing a hurricane hit the mid west will learn from the experience. Then your ear (pun intended) would be listening out for such things.

The use of news is a good example and if current news is being used, it opens a can of worms about past news too...
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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
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Old Jan 27, 2010, 2:05pm   #216
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Re: Wall Street = Casino. Minus Sum Game.

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Originally Posted by DionysusToast View Post
These systems only exist in someone's imagination.
That's why I said 'consider'. The point made was not about whether or not that system exists and can make money, but about pure TA staying out of the market on fundamental data.

I'll let people draw their own conclusions. In one corner you have people who are clearly knowledgeable and skilled in what they do (I'm not claiming that's me, by the way - it's obvious who I mean), and who have told you what the truth is, and in the other corner you have the above.

Anyone who infers probable truth on an evidential basis will get the right message from this thread anyway.
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