trader_dante
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Scose, I agree with you to an extent. Just supposing that price movement was completely random, then I still believe that TA can provide a structured approach to trade management that can cause a trader to have a positive expectancy.
However, I don't believe that price movement is completely random. There are obvious patterns that repeat themselves in the market place and if a trader can't see them, they either haven't watched the market long enough or they aren't looking at it with the right frame of reference.
I'm not being funny but half the people that discuss TA probably don't even understand what it means.
TA is largely marketed to us all as the obvious patterns that predict price. But at the heart of it, TA is not about a head and shoulders formation, it's not the random trendline that you draw in the middle of nowhere or the cup and handle pattern you've spotted that the rest of the world hasn't. It includes these things but this is not what it's about.
Yet this is how most people seem to use it.
TA is simply a study of past price data in order to predict future price movement. When you spend enough time watching price, you get to realise that some of the movements and the associated outcomes after those movements are higher probability than others.
We had a Bund trader in our prop firm who was wildly successful. He thought TA was nonsense. Yet he once told me about a particular window of opportunity in the Bund in which it was extremely high probability to bid just beneath a recent swing low because the market was being faded on breaks - he pointed to a chart to illustrate this.
What is this if not TA?
Take the gap on the FX open for example. It has a 90% strike rate over the last 18 months. I should know because I've traded it. This is an undeniable, empirical edge. You don't believe in TA? Cool. Go with the Sunday night gap then, put your stop at the Friday close and tell me how you get on.
I think there are many people that don't want to believe in TA because they can't understand why they can't make it work for themselves. I think all these academics seem to spot a classic head and shoulders chart formation, short the neckline break, do their a*se and then spout off about how TA doesn't work. Just like the people that used to tell me in MMT that they were taking every 5m pin they saw in the FTSE and then complaining that pin bars don't work.
However, I don't believe that price movement is completely random. There are obvious patterns that repeat themselves in the market place and if a trader can't see them, they either haven't watched the market long enough or they aren't looking at it with the right frame of reference.
I'm not being funny but half the people that discuss TA probably don't even understand what it means.
TA is largely marketed to us all as the obvious patterns that predict price. But at the heart of it, TA is not about a head and shoulders formation, it's not the random trendline that you draw in the middle of nowhere or the cup and handle pattern you've spotted that the rest of the world hasn't. It includes these things but this is not what it's about.
Yet this is how most people seem to use it.
TA is simply a study of past price data in order to predict future price movement. When you spend enough time watching price, you get to realise that some of the movements and the associated outcomes after those movements are higher probability than others.
We had a Bund trader in our prop firm who was wildly successful. He thought TA was nonsense. Yet he once told me about a particular window of opportunity in the Bund in which it was extremely high probability to bid just beneath a recent swing low because the market was being faded on breaks - he pointed to a chart to illustrate this.
What is this if not TA?
Take the gap on the FX open for example. It has a 90% strike rate over the last 18 months. I should know because I've traded it. This is an undeniable, empirical edge. You don't believe in TA? Cool. Go with the Sunday night gap then, put your stop at the Friday close and tell me how you get on.
I think there are many people that don't want to believe in TA because they can't understand why they can't make it work for themselves. I think all these academics seem to spot a classic head and shoulders chart formation, short the neckline break, do their a*se and then spout off about how TA doesn't work. Just like the people that used to tell me in MMT that they were taking every 5m pin they saw in the FTSE and then complaining that pin bars don't work.
