Chart Patterns - tosh?

[ducati998]

JB,

For what it's worth I consider it rather uncivilised to snipe at my professional standing as if that somehow casts some sort of light on my trading ability - I haven't attacked you personally in this, other than to say I think you're talking b****ks, I'm more than slightly amazed that almost 200 posts into this thread, with not a single post in support of your ranting, you haven't begun to wonder if you are the odd one out here?

Regarding your profession, I simply expected a more rational and objective approach. Your purile attitude casts far more light on any trading ability than your chosen profession.

If you believe me to be talking b******s then surely it would be more productive to highlight the areas with some evidence, statistical, anecdotal, logical argument, other than your 4 trade example.

Am I the odd one out. Most certainly. And in point of fact that pleases me greatly. That places me firmly in the minority, away from the herd.

You invest in bankruptcies - WOW, and you poke fun at chart users? So you put money into companies that have a proven track record of being unable to function within their budget... keep taking the dried frog pills old chap, and I hope you grow out of it in time.

And therein you display yet again your ignorance and monumental conceit. Again as a scientist, I would expect an enquiring mind, some form of logic and objectivity to the gathering of information. This is obviously not to be.

Trader333,
I have just noticed your request. Now as I am sure you can appreciate this subject is not one that can be condensed into 3 paragraphs. I will try to give a framework that will at least outline the process.

cheers d998

 

[trendie]

An excellent post, DaveJB.

You have put into words an idea that has been mulling around my head for a while.
The problem with trading, is that there are no qualifications, or even a form of aptitude test.
This explains why so high a percentage fail.

Imagine, a thousand people want to be surgeons.
And ANYBODY could apply. The failure rate would be pretty high.

But, we have filters.
First, you must pass GCSEs. If you dont, you cant proceed.
Second, you must pass A levels. If you dont, you get filtered out.
Third, you need to start a medical degree.
Over the relevant training period, if you cant hack it, you have to lower your expectations, and specialise early on into becoming dentists, opthalmologists, etc.
( apologies if this appears derogatory to them, I am only trying to express a point ).
Only those that have shown ability, and aptitude get to decide if they ant to be surgeons.
The overall success rate is high, because the also-rans and less-able are already filtered out.

In trading, ANYBODY can say they want to play.
No IQ tests. No aptitude tests. Nothing.
It seems to follow, many trading aspirants are simply not cut out ( intellectually or psychologically ) to trade. But we have no filters to say them, "sorry - you dont fit the preferred profile - byebye".

You can usually tell the ones whose expectations are unreasonable.
( They expect EVERYTHING for FREE. They squirm at having to pay hundreds, if not thousands for training. They expect to be profitable IMMEDIATELY. They expect to be able to make thousands a week with minimal knowledge. )

I confess, I had those unreasonable expectations, once !!!!!
I now understand, it is a long haul.
My first challenge is to merely break-even. Then I can start thinking about making profits.

I agree with your analysis on T/A being difficult, not unworkable.
( using your airforce analogy:
it is very difficult to learn to fly planes.
if we allowed ANYBODY to take to the air, the crash rates would be very high.
but, because we select people first, for their abilities, only the good ones get to fly )

 

[TheBramble]

What are you views re seperate flux or multicore, by the way?

Normally I wait for the 6EMA Flux to cross the 13WMA Multicore and providing I'm at an appropriate S/R level I'll take on part of the position. If the next candle after my entry supports my direction I'll solder on and put on full size.

It sounds easy, but it is.

 

[ducati998]

JB,

Yes, because you cannot logically argue that because only 10% of people using a system win, the system is invalid. That human beings are capricious creatures prone to joining non-existent dots is well known. People have been 'given' trading rules to follow in the past, done passably at it (this is how a trainer would seek to advertise their method - take genuine newbies and teach them to win over X weeks), then they get cocky, deviate from the plan, and screw up... mistaking their gains for competence they decide they know better than to follow the rules that are showing a profit.

This is the very point that I am arguing however. And here is my reasoning.

Daytraders require stocks (or futures contracts) that possess volume, and volatility.
Therefore all daytraders are attracted to the instruments that display these characteristics.
Therefore, daytraders are competing with daytraders, Market makers, and sundry (investors)
Therefore if the maxim cut losers, run winners is applied, by basic math, more must lose, to allow winners to profit.
If we can assume market makers, due to their advantages are net winners, investors are either paper losers/winners, then daytraders are cannabalising themselves.
The greater numbers that participate, the greater the net loss, again basic math will decree that the greater the volume chasing a "price" the higher in aggregate that price will be.

This does not even start to take into account the psychological factors that you quite rightly have identified.

TA is bloody difficult to get right, that does nor invalidate TA, it just means that as 90% of the population are too preoccupied to devote the required time to it they fail. Approximately 10% of aircrew applicants to the Airforce failed initial selection when I went through the mill - this did not 'prove' man couldn't fly, it proved that the majority could not hack it in one form or another. You are 'proving' the wrong thing, we KNOW TA is difficult and that many fail, we also know that of those who work hard at it a much higher percentage go on to do well with it. Many of the 90% failures are people who think you can read one book over a weekend and extract money from the market for the rest of creation and jack their jobs in.

But those that work hard.........they now = 100%
What %% of the new group succeed?
How do you define success?

That does NOT invalidate TA, it means that the hard working section who fail need to look for an alternative investing method, and the other 85% should try working for a living.

But it does invalidate T/A, the same way if only 10% of spades worked, spades would be discarded. What it shows is that certain individuals can OVERCOME a poor tool, and succeed.
And yes, the rest should seek alternative methods.

I still genuinely believe you came onto this board purely to argue the toss, and I doubt I'm alone in that idea.

Argument, or polite discussion, either way the outcome should be to stimulate some thought as regards trading. If I revealed my ulterior motivation I doubt you would believe me.

cheers d998

 

[DaveJB]

Regarding your profession, I simply expected a more rational and objective approach. Your purile attitude casts far more light on any trading ability than your chosen profession.

Oh well, I was being polite, yet you still continue to assume your knowledge is so much greater than mine, and everyone else's here, that I'm being monumentally thick to actually argue with you - I still haven't found the rulebook you play by that says I have to 'prove' a damn thing to you, I HAVE published material on the reliability of TA (it would help, by the way, if you used the correct terminology, you may have to look up 'reliability') I've yet to see anything other than 'we all know' or 'it is obvious' from you in reply. It's blatantly obvious you aren't interested in a discussion, you just figure we should all listen while you rant.

I'll also suggest again that you really ought to leave my professional qualifications out of this - I publish material on TA, I've had analysis up on my website (before the event) to show my branch of TA in use, warts and all (I've left 'bad' analysis up as well as good) and have spent several years now being as honest and above board in my TA and dealings as I can. You disagree with my use of TA, fine, I personally don't give a toss, but where do you get off attacking my profession or my capabilities in it? What, about my use of TA, automatically entitles you to question my profession?

I AM allowed to disagree with you without you impugning my professional credentials you know, this 'self proclaimed physicist' spent 13 long years studying to achieve those qualifications, I think it's only polite to acknowledge that people can hold different opinions without being personally attacked in this manner.

And therein you display yet again your ignorance and monumental conceit.

No, there, again, I am displaying my restraint - I could be quite cutting if I put my mind to it. (IQ quite significant, by the way - officially measured, just in case you feel like taking a pot shot at that).

Somehow I doubt it's PTTRADER who is frothing.

 

[timsk]

d998
"But it does invalidate T/A, the same way if only 10% of spades worked, spades would be discarded. What it shows is that certain individuals can OVERCOME a poor tool, and succeed".

Earlier in the thread I think it was SOCRATES who said something to the effect that charts work just fine, it's the eyes and the mind of the person viewing them that messes things up. (Appologies S' if I've misquoted you). Anyway, the point is that a spade is an excellent tool. I should know as I use one most days in my day job! However, not everyone can use one effectively. I know this too after observing a young apprentice using one for the first time. Charts are fine; spades are fine. The operator may not be fine and, when it comes to trading, very often isn't. This exaplains the 10:90 win loss ratio. It has absolutely nothing to do with TA or charts.
Tim.

 

[DaveJB]

Trendie,
cheers, you missed at least one step out actually that reinforces it further - when you are qualified to apply to medical school you interview for it and they don't take all applicants by a long way. You can fail to get in with straight A's - my stepdaughter got A levels, 2 A's and a B, and nobody would take her in the whole UK (this is a girl who had things like the Duke of Edinburgh Gold Award, and being ex-Gordonstoun wasn't exactly a handicap). The standard is incredibly high - does medicine get written off as a result?

It's not the only thing we don't test for, of course - humans are odd in a way, we've got civilised so 'survival of the fittest' doesn't necessarily work the way biology probably has it programmed, thank goodness <g> The downside of that is that we often almost legislate in favour of man's inalienable right to shoot himself in the foot - it is then common to complain bitterly that some mechanism should be in place to prevent the one footed marksman from suffering any ill effects.

The market is a Darwinian process, taken almost to extremes - there are sharks, and there are things the sharks eat, and very little else. (Nothing else, I would suggest, over any significant period of time). Like all food chains 10 prey are required for each predator... you get to decide which you want to be, you get a finite time to become a member of that group. Those joining the chordates are still here a year later....

Dave

 

[barjon]

mm, come on guys - all you get from banging your head against a brick wall is a headache.

For my twopennyworth I'd say that many people lose because they think that TA "works" in the sense of if x then y follows . They soon find that TA does not "work" in this sense and if it did the market would probably collapse. All that TA does is to give you information about buying and selling pressure, whether it is consistent, whether it is changing and/or where it is likely to change. It helps provide you with logical entry points, helps in determining the probability of the desired outcome and helps let you know when you've gone wrong. Whether you make money with it depends as much, if not more, on your money management as on your anlaysis.

On the other hand, try telling a Fib adherent looking at GSK that it doesn't work

Good trading

jon

 

[TheBramble]

If I revealed my ulterior motivation I doubt you would believe me.

Do you care?

And more to the point, can you support your current stance (if indeed one can be discerned) from what appears at first glance (from your far more succint and concise first post on these boards) to support the use of indicators/TA?

The World turned upside down?

http://www.trade2win.com/boards/showpost.php?p=42701&postcount=39

 

[trendie]

mm, come on guys - all you get from banging your head against a brick wall is a headache.

Only if you do it right !
Otherwise you get contusions, and even detached retinas.

The number of people who think they can read a book over a weekend and think they know all about banging heads against walls. Tut-tut.
Most probably blame the wall for the blood. Amateurs.

 

[DaveJB]

Tony,
do WE care?
Barjon - the Government have effectively banned what we're doing here. I sincerely hope everyone is taking it as seriously as I am.
Oh, 2 Galactic Demerits for sniping at another member whilst purporting to post on an unrelated subject <g>
Trendie - i'ts only a book in an insubstantive sense, the book is an allegory, it is a mental facsimile of a degenerative construct the psyche creates to esplain a perceived synchronicity of event, yet, paradoxically, is then compelled to deconstruct in a bid to prove it's essential non-existence.
(I should have either been a psychologist or a commissar, that looks way cool and neither I nor anyone else has a clue what it says).

Dave

 

[trendie]

i'ts only a book in an insubstantive sense, the book is an allegory, it is a mental facsimile of a degenerative construct the psyche creates to esplain a perceived synchronicity of event, yet, paradoxically, is then compelled to deconstruct in a bid to prove it's essential non-existence.

I may have hit my head against the wall once too often - I have dislodged some neurons !!

 

[ChartMan]

Isn't it time this thread was closed. Surely you have all exhausted all possibilities?

 

[trendie]

Isn't it time this thread was closed. Surely you have all exhausted all possibilities?

Voice of reason!!

I think this is still a good thread, Chartman.
However, the personal clashes started around page 8.

pttrader made some good, detailed posts. Quite in-depth ideas.
some replies took us off on a tangent.

it deteriorated from then onwards, and became personal.
( and some of us, , jumped in with funnies )

rather than close it, would there be any objections to removing all posts from around page 8 or so ? ( everything before that was good stuff )

 

[roguetrader]

For anyone interested some lite reading

http://www.dolefin.com/technicalanalysis/

 

[DaveJB]

Trendie -
are they the ones with the turtles on their foreheads?

Chartman - sort of, I don't think anyone here is particularly trying to make actual points, although Tony and I are having a bit of a contest to see who can pull up the most obscure reference to soldering.

Dave

 

[TheBramble]

I agree with Chartman, the thread has been well fluxed.

However, I'd appreciate you giving Grant the chance to respond to my query in post #189.

 

[pttrader]

Do you care?

And more to the point, can you support your current stance (if indeed one can be discerned) from what appears at first glance (from your far more succint and concise first post on these boards) to support the use of indicators/TA?

The World turned upside down?

http://www.trade2win.com/boards/showpost.php?p=42701&postcount=39

Well, well well. Look what the Bramble dug up on ole DUCATI. The Bramble found the former DUCATI for all of us! Thank you Bramble for showing us DUCATI "former" beliefs. Now we see what he used to be like. Poor guy must have had a hard time making the 10% (according to him only 10% make it) got bitter and decided do bankruptcies. I know I am just being sarcastic. Maybe Ducati does well in bankruptcies. I hope so. However, I do quite well in TA. As do many of you all I am sure. Bramble does that mean because I have made the coveted 10% that now I am a cannibal of my daytrading friends? Please tell me that DUCATI is wrong and we aren't all cannibals! All 10% of us. Just the thought of it might push me into bankruptcy!

pttrader

 

[DaveJB]

Okay,
not wishing to see such an invigorating thread die, to go back to the start....
Triangles - in the very first post this is what I see.... an SP500 chart and two Dow charts, the 2 DJIA charts are 30 mins apart, the SPX is (I'd assume) the same time as the second DJIA chart. Notwithstanding any discussion about whether a triangle is evident, and what it may portend, I figure this:-

Initial chart (1st DJIA) shows a series of 3 candles I'd describe as 'make your damn mind up'... we've had a big fall, there's little sign it intends to keep falling, but to me it's only vaguely bullish. (The up candles have decent bodies, but the lows and highs go everywhere). We then get a run up of 4 candles, a bit of an upper shadow on the last pair, but 'good bullish candles' is my first thought, rising tops and rising bottoms. A retracement follows - not unusual after 4 straight risers, followers of the 1-2-3 will see the move ending on a '3' I'd imagine, there are 2 good down candles retracing what is suspect is a hefty percentage, but failing to go the whope hog whilst the third down candle is a narrow body centrally located in a small range... indecision, suggesting an end to the downtrend, although not necessarily a reversal into uptrend. A couple of indecisive candles followed by a 'stonking' (technical term, honest) up candle that leads into a retest of the high.

At this point we swap to the other charts, at this point I would not enter the trade either way as the retest might fail, it might go through - a long trade halfway up that long climb would be a decent move, you could exit a failed retest for minimal loss or a small gain, a successful breakout above the double top would be worth having, and there's very little chance the '3 bottom' wasn't in by this point, the long white candle being the third successive rising low. (ie a small gamble with big upside and a low probability of loss that was probably easy to manage).

There are two so-so candles as the chart hesitates again, then the bitg up candle confirms the breakout and after that you're really looking to exit according to your preferred criteria... using the DJIA to indicate good SPX trades would work out somewhat nicely at the end... no way would I have been clever enough to spot that.

Over the whole 20 bars the bottoms are rising almost all the time, the tops are climbing too....you COULD go long in that dip and panic to go out, but in 20 bars you'd be on a winner entering on 16 of them. Rising tops and bottoms is bullish in any TA definition - triangle or not, the basic trendline info tells you it's a bull all the way. With narrowing range and a few top shadows appearing I'd expect a top to form soon - I have no idea whether it did, but I'd look for a hesitation soon I think, smaller H-L range, more Dojis and so on... that might presage a reversal or a period of consolidation prior to resumption of trend, I know not.... the trick is to trade what's there, not try to forecast the next bit.

I'd suggest, therefore, that 'triangle or not' is immaterial, the tops and bottoms tell you all you really need to know, along with the range H-L of each bar. I don't trade indices, so this might be utter cobblers, I often screw up anyhow but that's my 2p. I would not forecast the market 20 mins ahead - I would already be in the trade long and watching for an exit, if I saw this for the first time at this point I would watch it, I would not enter, but I might well wait to see if it did consolidate so I could trade whichever way it left that consolidation.

I think it would be a mistake to assume this thread needed closing - we're merely at the point where we are explaining that disagreeing with someone does not make you inferior or stupid somehow, and life is in 3-D (there are two sides to each coin). I hope this goes some way towards getting back to TA.

Dave

 

[counter_violent]

ducati 998

Interested to hear your strategy regarding bankruptcies

I figure you might say , become a liquidator !!!!