Trading Without Charts?

Splitlink said:
IMO, no. It is far too late to open a trade unless one has really good grounds for doing so. Normally, the market has a good idea of how results are going to be months before they are published. That is why I believe in TA for trading purposes.
Click to expand...

In the above case, TA wouldn't help, it would be a hindrance. It's just one of many, many little niches you can carve out for yourself in the trading world.

The market will price in it's expectations for earnings but there is little evidence that the market can predict earnings accurately. In the above example, the market has already priced in poor results. If the results are poor as expected, you will not see a large down move as the market has priced in poor results. If the results are good, you will see a good up move when the market realises it priced based on false assumptions.

In this case, what's your risk:reward on a long trade ? Downside is limited but upside is potentially 20%.
 
DionysusToast said:
In the above case, TA wouldn't help, it would be a hindrance. It's just one of many, many little niches you can carve out for yourself in the trading world.

The market will price in it's expectations for earnings but there is little evidence that the market can predict earnings accurately. In the above example, the market has already priced in poor results. If the results are poor as expected, you will not see a large down move as the market has priced in poor results. If the results are good, you will see a good up move when the market realises it priced based on false assumptions.

In this case, what's your risk:reward on a long trade ? Downside is limited but upside is potentially 20%.
Click to expand...

I don't think that R:R is all about 1:1, 2:1, etc on just the entry. There are unlikely to be any surprises and the market is quite likely to mark the figures up, as not. This happens time and time again, expecially if the market is buoyant that day.

Anyway, I bypass companies that are too close to results days, there are plenty of others.

The Mushy Pea case is like the argument for buying call options. "You can't lose more than the price you pay" That is quite true but the downside is that you probably will lose that.
 
Actually Splitlink - the Mushy Pea case is a real, repeated scenario. The market often marks down related stocks and there are ways to profit from this 'mis-pricing'. Risk and Reward do not necessarily need to be numerical values.

I would say that the ability to find a stock that the market has mis-priced is different to finding a stock that the market is undervalued. As has been mentioned, a stock can stay undervalued for a very long time.

In these cases, TA will be sending the wrong signals. There are surprises and they occur often. The idea that the market knows all is false. For sure, I don't have any friends & colleagues that know results ahead of time. For the market to price in future information, then the majority of money would need to be on that side and this is simply not the case. Do some insiders make money on future news ? For sure - but I don't think it's as prevelant as people think.

Information is available so quickly now that we should not blame our failures on 'the market' having information we don't have. Perhaps instead, it's the methods we use - such as TA methods lagging. Perhaps just paying attention to, and interpreting the information is what the big banks et al do better than the retail trader.

PS - just realised this was in the forex section. Excuse my discussion on stocks !!
 
the only person on a forum so far that I have seen with a tested method trading without charts that's actually works is trader101 at FF. if you don't know who he is or how he does what he does, look him up. it makes more sense than drawing lines on a chart and using indicators. I have been getting practice in on it for the past couple of weeks and it's the best way to trade so far after seeing everything else win than lose than win than loose again in my live account for my first yr of trading.

price doesn't lie, indicators do. and drawing a line is subjective.
 
virtuos0 said:
Why not also trade with a blindfold, ear muffs and a soft-toy stuffed in your mouth?

It is possible to take things too far.
Click to expand...


Though, I almost fell out of my chair laughing at the response, the OP does have a point.

The OP's point (I am certain of it) is that Charts drive emotional responses to market activity that might be disadvantageous to successful outcomes. In other words, charts drive some people crazy.

I cannot show you the GUI that I trade with, but rest assured, it contains no charts. It is a Digital Panel that keeps me informed about where the market is headed, where my trade profile is headed and what my capital is doing in the market at all times.

I just don't need charts anymore. The aggregate net/net P/L tells me everything I need to know, because my trade profiles have become rather complex. Trying to make rational decisions about what to do next, given the number of positions open each week for me, is not the optimal way to operate my trades. I have charts that aggregate the Performance of all trades concurrently, but these are not price charts.

Of course, all of this assumes that you are not trading Naked (opened and exposed) with a single pair or singular FX option. I have multiple performance indicators in my GUI, but the most important one is the Net Profit & Loss Total value which is displayed digitally, of course.

Here's what such a Digital Display tells me:

a) I know that typically, I can expect my profile to start off by posting a net loss of not more than -15% (+/-) of my total cost basis (equity in the trade) between Friday (entry) and EOD Tuesday.

b) I know that typically, I can expect to see the Net P/L increase to approximately +50% to +75% (+/-) of expected target for the week, between Tuesday and Wednesday OED.

c) I know that typically, I can expect to see the Net P/L increase to approximately +75% to +100% (+/-) of expected target or better, no later than Thursday or Friday EOD.

If I have a partial target fill for the week by EOD Friday, then there are built-in rules that deal with that scenario. If I have a Net Loss on the P/L for the week by EOD Friday, then there are built-in rules that deal with that scenario as well. Typically, there is no Net Loss, but there can be partial target fills on any given week. So, while I may not strike my weekly target for the entire profile on the week, I don't typically suffer a net loss for the week in the vast majority of cases.
-----------------------

I entered my lat profile on Friday OED 2/12/2010. Right now, I have 17 positions open concurrently. 15 positions are losing money and only 2 positions are making money yet my Net P/L is only -15.47% which is within the Performance Range for this stage of the profile.

Once I enter my profile (17 positions), I do not enter a STOP - nor - do I enter LIMIT for any of the 17 positions. I am simply open (but very covered) in the market and I do not telegraph my Exit in either direction until the very last moment. At the appropriate time, I will insert all Limit Orders and hit the Kill Switch on any under-performing slackers, if my system tells me to, or I will keep them open, if the system so indicates.

So, the system is the auto-pilot, but I am THE pilot-in-command with full override authority at any moment. If the flight is getting into trouble and the auto-pilot cannot compensate, then I intervene only in those areas where intervention is necessary.

All of this can be done whilst not looking at a single chart, all week long. In fact, if I wanted to, I could have designed the GUI to display just the Net P/L value and nothing else - just one big number on screen and I would not precisely where I was in the trade at all times. But, I do prefer to have the digital panel present me with additional performance parameters, so while it has no charts, the GUI does contain more than just the Net P/L.

Now, for clarification purposes:

No. I do not recommend that a total novice go out and try this without understanding exactly what they are doing.

No. My system is not now, never has been and never will be for sale - at any price. (Priceless to me anyway)

No. I cannot post pics of the GUI.


TradeSMART, by Managing your Positions. :smart:
 
TraderNumber7 said:
Though, I almost fell out of my chair laughing at the response, the OP does have a point.

The OP's point (I am certain of it) is that Charts drive emotional responses to market activity that might be disadvantageous to successful outcomes. In other words, charts drive some people crazy.

I cannot show you the GUI that I trade with, but rest assured, it contains no charts. It is a Digital Panel that keeps me informed about where the market is headed, where my trade profile is headed and what my capital is doing in the market at all times.

I just don't need charts anymore. The aggregate net/net P/L tells me everything I need to know, because my trade profiles have become rather complex. Trying to make rational decisions about what to do next, given the number of positions open each week for me, is not the optimal way to operate my trades. I have charts that aggregate the Performance of all trades concurrently, but these are not price charts.

Of course, all of this assumes that you are not trading Naked (opened and exposed) with a single pair or singular FX option. I have multiple performance indicators in my GUI, but the most important one is the Net Profit & Loss Total value which is displayed digitally, of course.

Here's what such a Digital Display tells me:

a) I know that typically, I can expect my profile to start off by posting a net loss of not more than -15% (+/-) of my total cost basis (equity in the trade) between Friday (entry) and EOD Tuesday.

b) I know that typically, I can expect to see the Net P/L increase to approximately +50% to +75% (+/-) of expected target for the week, between Tuesday and Wednesday OED.

c) I know that typically, I can expect to see the Net P/L increase to approximately +75% to +100% (+/-) of expected target or better, no later than Thursday or Friday EOD.

If I have a partial target fill for the week by EOD Friday, then there are built-in rules that deal with that scenario. If I have a Net Loss on the P/L for the week by EOD Friday, then there are built-in rules that deal with that scenario as well. Typically, there is no Net Loss, but there can be partial target fills on any given week. So, while I may not strike my weekly target for the entire profile on the week, I don't typically suffer a net loss for the week in the vast majority of cases.
-----------------------

I entered my lat profile on Friday OED 2/12/2010. Right now, I have 17 positions open concurrently. 15 positions are losing money and only 2 positions are making money yet my Net P/L is only -15.47% which is within the Performance Range for this stage of the profile.

Once I enter my profile (17 positions), I do not enter a STOP - nor - do I enter LIMIT for any of the 17 positions. I am simply open (but very covered) in the market and I do not telegraph my Exit in either direction until the very last moment. At the appropriate time, I will insert all Limit Orders and hit the Kill Switch on any under-performing slackers, if my system tells me to, or I will keep them open, if the system so indicates.

So, the system is the auto-pilot, but I am THE pilot-in-command with full override authority at any moment. If the flight is getting into trouble and the auto-pilot cannot compensate, then I intervene only in those areas where intervention is necessary.

All of this can be done whilst not looking at a single chart, all week long. In fact, if I wanted to, I could have designed the GUI to display just the Net P/L value and nothing else - just one big number on screen and I would not precisely where I was in the trade at all times. But, I do prefer to have the digital panel present me with additional performance parameters, so while it has no charts, the GUI does contain more than just the Net P/L.

Now, for clarification purposes:

No. I do not recommend that a total novice go out and try this without understanding exactly what they are doing.

No. My system is not now, never has been and never will be for sale - at any price. (Priceless to me anyway)

No. I cannot post pics of the GUI.


TradeSMART, by Managing your Positions. :smart:
Click to expand...

What a great post T#7. I think you did a great job of fleshing out the other side of the coin when it comes to trading with out charts and technical analysis as it is commonly known.

The truth is, no matter what one uses to justify clicking buy or sell, it is essential that after a position is established that it must be managed. To make money in trading you have to 1. be in the market, and 2. be a risk manager, that's really it. As you've explained, managing risk means a heck of a lot more than using a stoploss.

I think the only other side of the coin when it comes to trading without charts is having access to information that very few are privy to. This would take the form of interbank flows, existing order placements - especially stops, early news sources ect. Having material information, by nature, is the best form of risk managment.

Those of us who are not privy to this information have to take the road less traveled and become masters of controlling risk when the outcomes are unknowable. Think of the advantage you will have in the long run, especially against other informed traders who depend on certain streams of special information. Once their info flow dries up as it were, they're screwed, but traders like you have done the wise thing; dug yourself a well that can't run dry.

Regards and good trading,

Harvaster
 
Harvaster said:
I'm a FX guy, and I do actively take directional speculative trades. None of the handful of guys who do what I do will ever talk about it on a public forum because frankly it would be stupid to do so. Uninformed traders are my bread and butter.

I just posted here so I could throw in my 2 cents, and it looks like I was wrong.
Click to expand...

How would you figure out the fundamental values for currencies though? Isn't there a lot more information available and things that affect pairs?

I guess the profits would be bigger too though since moving market value -> fundamental value takes a lot of positions yeah? I guess you could look for places where clusters of orders are placed?

Devilicus said:
the one that makes you money.

If there was some special way of making money without using charts or anything else people have wrongly suggested that John may be alluding to(FA/tapereading/pitnoise/algos etc), the cat would be out of the bag by now! To think that there is a whole concept/method that none of the thousands of people on this forum are even aware of is silly, lol. Even my old mate grey1 doesn't know (or care) what John is talking about, and he's spent over a decade trading professionally and working on risk models for financial institutions in the heart of the trading world etc. Someone's having a laugh I think.

Would be nice to hear from other sucessfull chartists like trader_dante, Kitejedi, Gamma, TheBramble etc.
Click to expand...

Here's the thing, there are ways to trade that aren't TA/FA/tapereading/etc. But it's not exactly a secret method that no one is aware of, more of looking at the markets with a different mindset once you have gained the knowledge required. You gotta have a very thorough understanding of how the markets work, who its participants are, and other boring stuff. A good starting place is a textbook called 'Trading and Exchanges'.

Ironically enough for this thread, you need to be very good at TA/FA so you can figure out other traders' sentiments.
 
Last edited:
''the market virtually always telegraphs it's intentions, but this vital information cannot be found with traditional price charts''

Maybe he's saying that inside info is the only way to reliably make money trading.
 
scholfield said:
''the market virtually always telegraphs it's intentions, but this vital information cannot be found with traditional price charts''

Maybe he's saying that inside info is the only way to reliably make money trading.
Click to expand...

No. What he is saying is that the volume information within the price candle/bar is important.:!:
 
I am confused. I fail to see what difference it makes to trade using a number screen vs trading with charts. I personally use both. A chart is a really easy way to display data of the past, which can help our view of the market in the future. I could train myself to remember a lot of numbers and then just display the current ones but this seems crazy to me. What is the point again?

Cheers
 
new_trader said:
No. What he is saying is that the volume information within the price candle/bar is important.:!:
Click to expand...

No, I think John1 said he didn't look at volume.

numbertea said:
I am confused. I fail to see what difference it makes to trade using a number screen vs trading with charts. I personally use both. A chart is a really easy way to display data of the past, which can help our view of the market in the future. I could train myself to remember a lot of numbers and then just display the current ones but this seems crazy to me. What is the point again?

Cheers
Click to expand...
whatever John1 was referring too cannot be seen on a price chart.
Maybe he's talking about some special information/data that everyone here is unaware of, but that shows the markets intentions.
'''the market virtually always telegraphs it's intentions, but this vital information cannot be found with traditional price charts'' ''
 
scholfield said:
No, I think John1 said he didn't look at volume.


whatever John1 was referring too cannot be seen on a price chart.
Maybe he's talking about some special information/data that everyone here is unaware of, but that shows the markets intentions.
'''the market virtually always telegraphs it's intentions, but this vital information cannot be found with traditional price charts'' ''
Click to expand...

John1 was winding you up. :rolleyes:
 
scholfield said:
What a scumbag!! (him....not you)
He owes me about 2 months of my life back trying to work out what he was referring too.

Did you read his posts in this thread, DT?
Click to expand...

Actually, I'm not a scumbag and I don't owe anyone anything. We are all on our own journey and are adults responsible for our own lives. Just because somebody on here is sceptical or doesn't know what I was talking about, this doesn't mean that I was winding people up. Although, It probably does means that person doesn't spend much time thinking outside their own little box and quite possibly believes that they know it all. It's all good I'm just as happy taking their money as anyone else's. Perhaps it's best that what I was referring to should remain one of lifes great mysteries. Good luck with your future endeavours.

Cheers John1
Although because it is so long since I've been on here and I've forgotten the old password I had to rejoin as Sailor 1
 
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