a free gift to total newbies from MajorDutch

[neil]

Neil.

No offence here - but you have been a member of this site for 11 years and you are using an Oanda SIM account.

Do you now think that looking outside of mechanical methods is worth considering after over a decade?

DT

no offence taken - It is not the way I trade now but I use Oanda Sim to test and keep up with ideas that drift across this and other forums/sources. I like intelligent debate so do not take offence easily. (Not around here anyway)

 

[MajorDutch]

Evidence based technical analysis by David Aronson.

Ronald Raygun at FF knows the score. I havnt really read his posts in any detail, but I've read enough to know he's probably the only member over there who'll ever make any real money out of this game. If he's not cracked it already, he soon will.

Fooled by Randomness is well worth a read, Drunkards walk by Mlodinow, Liars Poker by Michael Lewis, zuppys posts at various forums. The easiest way is to start taking some trades, and see where it gets you

cheers Hare, will check these out.

 

[VielGeld]

I've kept up with this thread, but I've yet to see what Dutch is doing wrong? It's a fact that price behaves differently around round numbers and S/R, and I think that's all he's trying to show. S/R is being taken too mechanically here, I think, since S/R is pretty much any level at which price has some resistance to breaking. Obviously, the "bigger" the round number, the more potent it will be, although that also depends on market conditions (no one cares about support in a panic).

Later on, you latch onto these price patterns, then go on to understand the patterns behind reversals/breakouts/etc. I think what's important here is less the price itself than the way it behaves around there because you can extrapolate these behaviours into any other area of price and have a visual understanding of it. Why I think this is good for newbies is that they have a visual understanding of the way market players interact. I just hope they don't develop a bias about it and find patterns that really aren't there.

For example, let's say there's strong resistance around a certain round number. Price has pulled back a couple times, but it keeps trying to break through with smaller and smaller pullbacks. One day, market conditions are favourable and it suddenly does. It goes higher, loses momentum, pull back to the RN, then charges higher. This, imo, is a classic breakout pattern. Why the RN exercise is good is because what's happening here is much more clear than at "lesser" levels. You can then extrapolate this into other forms of breakout and decide how to play it.

Of course, that's just how I see it.

 

[DionysusToast]

Nothing inherently wrong with TA, to be sure... It's just that I believe that you need to be aware of the actual underlying reason these things are occurring in the mkt. Otherwise, it's a bit of flying blind, IMHO.

So there's nothing wrong with TA, as long as you understand the non-TA cause of the TA effect?

 

[DionysusToast]

I've kept up with this thread, but I've yet to see what Dutch is doing wrong? It's a fact that price behaves differently around round numbers and S/R, and I think that's all he's trying to show. S/R is being taken too mechanically here, I think, since S/R is pretty much any level at which price has some resistance to breaking. Obviously, the "bigger" the round number, the more potent it will be, although that also depends on market conditions (no one cares about support in a panic).

Later on, you latch onto these price patterns, then go on to understand the patterns behind reversals/breakouts/etc. I think what's important here is less the price itself than the way it behaves around there because you can extrapolate these behaviours into any other area of price and have a visual understanding of it. Why I think this is good for newbies is that they have a visual understanding of the way market players interact. I just hope they don't develop a bias about it and find patterns that really aren't there.

For example, let's say there's strong resistance around a certain round number. Price has pulled back a couple times, but it keeps trying to break through with smaller and smaller pullbacks. One day, market conditions are favourable and it suddenly does. It goes higher, loses momentum, pull back to the RN, then charges higher. This, imo, is a classic breakout pattern. Why the RN exercise is good is because what's happening here is much more clear than at "lesser" levels. You can then extrapolate this into other forms of breakout and decide how to play it.

Of course, that's just how I see it.

He's not doing anything wrong other than giving a false impression which may or may not be intentional.

Trading is subjective.

The OP hints that something is being gifted to newbies. The OP gives an objective ruleset which will not work if traded. In reality, there is nothing that newbies can get from the OP. They should come to realize this & maybe that is the point.

Maybe the point is that they are being given something objective but should see it's not enough and that subjective analysis is needed.

Seems like an odd way to give a gift.

 

[MajorDutch]

He's not doing anything wrong other than giving a false impression which may or may not be intentional.

Trading is subjective.

The OP hints that something is being gifted to newbies. The OP gives an objective ruleset which will not work if traded. In reality, there is nothing that newbies can get from the OP. They should come to realize this & maybe that is the point.

Maybe the point is that they are being given something objective but should see it's not enough and that subjective analysis is needed.

Seems like an odd way to give a gift.

mate you need to go and have a tommy tank and chill. I don't see you contributing much to newbs. If you are such a bertie big bollox then why don't you write something to help newbies get started and keep them out of the hands of preying vendors.

 

[Martinghoul]

So there's nothing wrong with TA, as long as you understand the non-TA cause of the TA effect?

Yep... IMHO, TA, really, is just a very non-rigorous and low-quality version of the very same statistical techniques that all the high-falutin' quants use. Statistical techniques are rigorous, because they use mathematical language. TA, on the other hand, is mumbo-jumbo that may or may not work and is, in an overwhelming majority of cases, a proxy to well-known inefficiencies, behavioral effects or some other mkt phenomena. Still if it works for someone, more power to them.

 

[DionysusToast]

mate you need to go and have a tommy tank and chill. I don't see you contributing much to newbs. If you are such a bertie big bollox then why don't you write something to help newbies get started and keep them out of the hands of preying vendors.

You know what?

All this childish language and insulting people does not do you any favours.

It's been going on throughout this thread but before now, not aimed at me.

The fact is what you presented is purely objective analysis without giving any reason for the cause that has effect.

For an aspiring trader, this sort of thing is worse than nothing. With nothing, at least they can come to their own conclusions about why price moves and not be pushed towards candlesticks and other such mechanical nonsense.

As for having a "tommy tank" - I'm an adult with 2 kids, at some point in the future, when you have a sexual partner, you will realise how unsatisfactory such solo exercises are.

 

[VielGeld]

mate you need to go and have a tommy tank and chill. I don't see you contributing much to newbs. If you are such a bertie big bollox then why don't you write something to help newbies get started and keep them out of the hands of preying vendors.

To be fair, plenty of DT's posts around the forum have helped me wrap my head around the market. I don't think he caters specifically to newbies, but that doesn't matter since what he posts is useful.

Yep... IMHO, TA, really, is just a very non-rigorous and low-quality version of the very same statistical techniques that all the high-falutin' quants use. Statistical techniques are rigorous, because they use mathematical language. TA, on the other hand, is mumbo-jumbo that may or may not work and is, in an overwhelming majority of cases, a proxy to well-known inefficiencies, behavioral effects or some other mkt phenomena. Still if it works for someone, more power to them.

If you don't mind sharing, what are these techniques?

 

[Martinghoul]

If you don't mind sharing, what are these techniques?

Standard time series analysis/econometrics stuff. There's a whole lot of them, e.g. GARCH, various ARMA/VAR models, cointegration, PCA etc etc etc. There's a wealth of them and, generally, I am always happy to share.

 

[Hotch]

I am always happy to share.

Give us a tenner?

 

[MajorDutch]

You know what?

All this childish language and insulting people does not do you any favours.

It's been going on throughout this thread but before now, not aimed at me.

The fact is what you presented is purely objective analysis without giving any reason for the cause that has effect.

For an aspiring trader, this sort of thing is worse than nothing. With nothing, at least they can come to their own conclusions about why price moves and not be pushed towards candlesticks and other such mechanical nonsense.

As for having a "tommy tank" - I'm an adult with 2 kids, at some point in the future, when you have a sexual partner, you will realise how unsatisfactory such solo exercises are.

someone took the bait!

All this childish language and insulting people does not do you any favours. didn't realise you were the board police dude. chilllax. u r no angel.

I think there is absolutely nothing wrong with newbies thinking objectively. Infact I think it is very important for them to think based on real facts and not be influenced by personal beliefs or feelings. Sometimes you don't need to know why things work all the time. Sometimes there are no answers and this has to be accepted which can be hard for human's to do.

If candlesticks and mechanical systems are such nonsense how come there are a lot of profitable traders out there who use them. You will probably come back and say they can work but not for the reason people think or some other ********.

If the Tommy Tank comment offended I apologise but you really should learn not to bite and sink to my level.

 

[Martinghoul]

Give us a tenner?

A tenner? Here you go:

 

[VielGeld]

Standard time series analysis/econometrics stuff. There's a whole lot of them, e.g. GARCH, various ARMA/VAR models, cointegration, PCA etc etc etc. There's a wealth of them and, generally, I am always happy to share.

Please do share. I'm always interested in new ways of trading. My PM box is also open if you'd prefer that. :]

 

[Martinghoul]

Please do share. I'm always interested in new ways of trading. My PM box is also open if you'd prefer that. :]

I am not sure what you'd like me to share, VG. It's all pretty standard stuff, as I mentioned. I can point you to a few books, I guess. Other than that, I don't know what I can share that's more specific.

 

[VielGeld]

Well, I've no idea what this "standard stuff" is in the first place or how it relates to trading. If GARCH/ARMA/VAR is standard, then I've never heard of it except maybe VAR, lol.

So yeah, a couple good books would be nice to see what's up.

 

[Martinghoul]

Well, I've no idea what this "standard stuff" is in the first place or how it relates to trading. If GARCH/ARMA/VAR is standard, then I've never heard of it except maybe VAR, lol.

So yeah, a couple good books would be nice to see what's up.

Well, the one that comes to mind most readily is "Market Models" by Carol Alexander. It covers a lot of ground. Then there's stuff like "Time Series Analysis" by Hamilton, which is a brick of a book.

 

[VielGeld]

Thanks, I'll look into it!

 

[new_trader]

A tenner? Here you go:

How ironic...a joke involving worthless paper money came from you.

 

[DionysusToast]

someone took the bait!

All this childish language and insulting people does not do you any favours. didn't realise you were the board police dude. chilllax. u r no angel.

I think there is absolutely nothing wrong with newbies thinking objectively. Infact I think it is very important for them to think based on real facts and not be influenced by personal beliefs or feelings. Sometimes you don't need to know why things work all the time. Sometimes there are no answers and this has to be accepted which can be hard for human's to do.

If candlesticks and mechanical systems are such nonsense how come there are a lot of profitable traders out there who use them. You will probably come back and say they can work but not for the reason people think or some other ********.

If the Tommy Tank comment offended I apologise but you really should learn not to bite and sink to my level.

I didn't take the bait, I just pointed out you were being a d1ck. Why not keep it civil?

Subjective analysis is based on 'real facts'. How do personal beliefs and feelings come into it? Is Subjective analysis beyond people? Is that your opinion? It's too hard to think subjectively so we NEED to make hard rules to trade objectively.

Well, guess what? The markets don't give a cr@p what you NEED.

Guess what else? Subjective analysis is EASIER than this ridiculous search for an objective, mechanical trading approach. Much, much easier.

A trader needs to know how the markets work. How price is able to move. Why people would feel good or bad about trading one way or the other. It's not difficult. It's just not candlesticks.

Liquidity, herd mentality and manipulation are the keys if you want to trade. Understand those three things and anything else you put on the chart other than the price (high low bars are fine) is an unnecessary distraction.

The problem is, people want to learn about candlesticks, chart patterns, indicators, fibs, pivot points etc. etc. etc. ad infinitum ad nauseum. Seriously, do you think ANYONE got profitable by reading Nison? All of this stuff has nothing at all to do with WHY someone would place a trade. It is all effect. It is not cause.

You mention all these people that are profitable using candlesticks. Where are they? I've never met one. In fact, if I mention this sort of stuff to people that actually trade for a living, they just roll there eyes and let out a sigh.