If you want to fail as a trader, study TA

[The Expert]

The SMA idea is as you say. So is every other formation or indicator, including the famous resistance, support and Fib lines that people say are wonderful when they turn within 30-40 points away. In fact, every part of the surface of a chart is so covered by by one line, average, or whatever, that someone is always happy about their particular favourite, while the rest of us investigate what the lucky poster is doing right. The problem is that that lucky poster is only right once out of ten times. If he becomes right three times out of ten he becomes a guru and writes a book.

I have my favourite patterns but have no illusions. To me, they are a line, not quite random to me, but they might just as well be for everyone else, which is why there is so much discussion. The art is not to get frozen in the trade, like a rabbit in headlights. Admit that it isn't working, as early as possible, and close it.

Are you not describing the act of gambling above?

 

[DionysusToast]

Well, you haven't 'talked about' anything in fairness!
you've managed to spin theother thread 30 pages long or something and you've basically said 'trade US stocks with a big daily range'.
You Initially posted charts without any lables whatsover. They could have literally been representing anything, lol. You eventually gave some hints as to what whey were of and DT stopped your thread from sinking into the depths of T2W by playing the game and discovering they were the ranges of stocks. Hardly nothing we've never seen, lol.
Why on earth didn't you just come out with what they were of straight away?

As I am getting a mention, can I say that I did actually read something in that thread that some people appear to have missed and it wasn't even remotely cryptic.

You can look at that bar chart and think that it shows you daily ranges OR you can look at a that bar chart and wonder why someone would look at prices in that way and that perhaps it's telling you to look at the price action in a slightly different way.

I think it's perhaps that we are all wired differently and some of us are less literal than others, which is why it appears cyptic.

 

[The Expert]

As I am getting a mention, can I say that I did actually read something in that thread that some people appear to have missed and it wasn't even remotely cryptic.

You can look at that bar chart and think that it shows you daily ranges OR you can look at a that bar chart and wonder why someone would look at prices in that way and that perhaps it's telling you to look at the price action in a slightly different way.

I think it's perhaps that we are all wired differently and some of us are less literal than others, which is why it appears cyptic.

AKA, Mental Structure.

We have all heard of the blind leading the blind, and that is exactly what TA allows to happen, if you are stupid enough to fall for it of course.

 

[DionysusToast]

My impression is that traditional/regular TA doesn't work. Obviously the danger with this is some vendor picking up on this and start selling his "new improved TA" to people that failed with the regular stuff. I am sure that already goes on.

Some of the reasons I can't see how TA is an approach that fits all markets in all conditions:

1 - Some markets have a finite supply and some are effectively infinite. Stocks are finite (float) but futures is infinite in that any number of contracts can be created.

2 - Some people claim that TA is about psychology. This is often followed by an explanation of some guy with no stop loss who gets out where he got in. I presume he brought a lot. Anyway - if it is psychology, then how do you account for times when the 'mood' was different ? For instance, there were some wild swings at the start of the Iraq war. If we trade around those levels today - would we expect the psychology to be the same.

3 - 'Reverse for shorts' - When I see markets move down, they behave differently to markets moving up. People seem to react faster to fear than greed. So how is it that traditional TA keeps telling us to turn the rules upside down for shorts.

4 - Some markets have derivatives. Stocks for instance. In this case, some things outside of that market itself obviously (to me) have some bearing on the price of the underlying. I have read research on price clustering near expiration times. Someone relying on TA alone would see this clustering and think it was support or resistance.

You could go on for a while picking these faults and perhaps they are just the exception.

As it is, the above seem like fairly significant issues that traditional TA needs to explain before I could take it seriously.

 

[N Rothschild]

i know a couple of belter trades that happen every expiry that you see wont on a chart!

 

[The Expert]

We are now, at last, starting to discuss how the markets operate.

It is very hard to believe that any person would consider gambling their money in the markets without first of all understanding how, and why, stock prices move as they do.

Of course psychology plays a part, as all traders think, but they MUST think within the constraints placed on them by the structure of the market.

Here is a very simple question about trading stocks.

Why are some stocks showing institutional traders holding in excess of 60% of the shares, and others showing much less, say 10% or 15%?

 

[Sang Froid]

. The problem is that that lucky poster is only right once out of ten times. If he becomes right three times out of ten he becomes a guru and writes a book.

Right once in ten times, so make sure that that one time is for a 200 points, and the other nine losses is only for 10 points.

Three times out of ten and you'll be rich beyond your wildest dreams, own a speedboat, and trade from your penthouse apartment overlooking Hugh Hefner's back garden

 

[DionysusToast]

If you said the following :

95% of traders have a headache, 80% of traders hit themselves over the head with a hammer once an hour.

People would have no issue with relating the use of the hammer with the headache.

Now replace "have a headache" with "lose" and the hammer stuff with "use TA" and suddenly people are up in arms...

 

[tss42]

What do they know that makes them different from the rest?

1. They understand how other professionals and the public in their market operate.

2. They have a very high degree of self-awareness. They monitor themselves.

 

[Ambrose Ackroyd]

I think the best trading plans can only come from personal observation of market behaviour over a number of years.

I looked at conventional TA early on in my trading career and realised that :-

1. Yes, it does have relevance, and

2. It is not the be all and end all of trading.

I have studied market behaviour endlessly for many years now and I have constructed my own personal TA which I wrap around my trading plan.

I still pay attention to conventional TA but it is my own personal take on all this that matters to me and works for me.

 

[Splitlink]

Which of the following is best?

1) Do 4 to 6 trades in 1 day and make $2,000

2) Do 1 trade in 30 to 60 min and make $2,000

Let's get clear about me. Ihat level of income is hypothetical.

I trade mornings only and try to get the high or low for the morning and ride it for as long as I can. If it is getting near lunchtime when I close I do not reenter. I rarely leave in the afternoons with a trade open with a stop on it but, sometimes, I do. I am an amateur and do take money out of the account for birthdays, holidays, etc. I use TA because I can't visualise, correctly, what is going on without it but, like you, I have very real suspicions about all drawn lines and averages and think that they are BS. I keep my textbooks to a minimum.

IMO the fewer trades, the better so (2) is my preference. However, getting that high/low is not achievable, all the time, by me, in one trade, which results in losses. Some mornings I miss it and do not trade at all.

In all politeness, I say to you that I do not like people asking too much about my method of trading, or criticising, because it might cause me to change course. I have a style that suits me and am happy with it, although other systems do get my interest from time to time.

As a trend follower I used to use averages and trendlines for entry but no longer. You are being lead, or told, what to do and it is far better to use one's own point of entry based on your own assessment. I do use the bars, though so am a TA user.

 

[Splitlink]

Right once in ten times, so make sure that that one time is for a 200 points, and the other nine losses is only for 10 points.

Three times out of ten and you'll be rich beyond your wildest dreams, own a speedboat, and trade from your penthouse apartment overlooking Hugh Hefner's back garden

Three in ten times does not cut it with me. It is too much like trying to kill a fly with a hammer. You have to tune your trading losses much finer than that and forget the 200 points to cover the losses of the losing trades part. Where did you get that information from? Makes you whet your appetite and dream of speedboats, doesn't it? Mr Market fed you that information and he wants your money. When he has it he'll spit you out like the pip from an apple and move on to the next punter.

Make every effort to get every trade your are making right. No three in ten and I'm rich stuff.

 

[Ambrose Ackroyd]

Agree Split.

I would find a 30% hit rate hard to live with psychologically.

Much prefer 30% losing rate, provided the risk profile is acceptable.

F**k the speedboat, I will settle for my Lexus thank you very much.

 

[Splitlink]

Agree Split.

I would find a 30% hit rate hard to live with psychologically.

Much prefer 30% losing rate, provided the risk profile is acceptable.

F**k the speedboat, I will settle for my Lexus thank you very much.

Watch the accelerator. Go for a Ford!

 

[nine]

It seems to me that the "TA is crap" school of thought is usually indulging in a whole lot of self-aggrandizement. No proof. Nothing but the usual assertions. And always, one wonders, is it the "I can't make it work for me so its rubbish" ego salve at work. So is this yet another example or should we have higher hopes?

And so far as I can tell in this thread, no presentation of an alternative that is wonderfully better. Where's the beef?

 

[DionysusToast]

It seems to me that the "TA is crap" school of thought is usually indulging in a whole lot of self-aggrandizement. No proof. Nothing but the usual assertions. And always, one wonders, is it the "I can't make it work for me so its rubbish" ego salve at work. So is this yet another example or should we have higher hopes?

And so far as I can tell in this thread, no presentation of an alternative that is wonderfully better. Where's the beef?

Well TA crumbles under scrutiny. Or perhaps you can have a stab at these 4 quesions:

1 - Some markets have a finite supply and some are effectively infinite. Stocks are finite (float) but futures is infinite in that any number of contracts can be created.

2 - Some people claim that TA is about psychology. This is often followed by an explanation of some guy with no stop loss who gets out where he got in. I presume he brought a lot. Anyway - if it is psychology, then how do you account for times when the 'mood' was different ? For instance, there were some wild swings at the start of the Iraq war. If we trade around those levels today - would we expect the psychology to be the same.

3 - 'Reverse for shorts' - When I see markets move down, they behave differently to markets moving up. People seem to react faster to fear than greed. So how is it that traditional TA keeps telling us to turn the rules upside down for shorts.

4 - Some markets have derivatives. Stocks for instance. In this case, some things outside of that market itself obviously (to me) have some bearing on the price of the underlying. I have read research on price clustering near expiration times. Someone relying on TA alone would see this clustering and think it was support or resistance.

 

[trendie]

I'm not sure proving TA is rubbish on this thread automatically proves any alternative is not rubbish on another thread.

If you could prove that MAs dont work, this doesnt mean Inside-Bars do work.
If you can prove that CCI doesnt work, doesnt mean Pin-bars do work.

Proving TA doesnt work, does not automatically validate the efficacy of any alternative.
The alternative still has to be shown to work in its own right.

 

[Splitlink]

It seems to me that the "TA is crap" school of thought is usually indulging in a whole lot of self-aggrandizement. No proof. Nothing but the usual assertions. And always, one wonders, is it the "I can't make it work for me so its rubbish" ego salve at work. So is this yet another example or should we have higher hopes?

And so far as I can tell in this thread, no presentation of an alternative that is wonderfully better. Where's the beef?

That's true about the alternative. That can be said about democracy and we all know how good that is.

My opinions are my own and it is also, in part, true what you say about "I can't". In my own case, I can't make lines and averages work well[/U enough for me and you know, nine, that I've been doing this for many years and have had to, either, give it up or try other things. I think that has to happen to most survivors. I do use TA, in trading 100%, because I have found nothing else but, really, textbook lines have all been tried and tested and everywhere there is a turning point, a line, or average, can be found to say, "You see! I told you so". It's time to put the record straight for newcomers. Textbook TA is, mainly, BS. That is the fact of the matter and it is not fair to say otherwise.

 

[BSD]

It seems to me that the "TA is crap" school of thought is usually indulging in a whole lot of self-aggrandizement. No proof. Nothing but the usual assertions. And always, one wonders, is it the "I can't make it work for me so its rubbish" ego salve at work. So is this yet another example or should we have higher hopes?

And so far as I can tell in this thread, no presentation of an alternative that is wonderfully better. Where's the beef?

TOTALLY agree !!!

What a totally empty, attention seeking bull**** thread.

Is this guy Socrates resurrected ?

He too only ever posted crap and couldn't trade his way out of a paper bag if his life depended on that either lol.

Market Wizards Linda Raschke and Marty Schwartz used TA and indicators and made fortunes.

Marty Schwartz averaged out at 33% per month in fact using moving averages, bands, and oscilators lol.

Marc Sperling who I have seen trade has been around for ages has made millions trading with moving averages:

http://travel.nytimes.com/2008/04/14/nyregion/14partying.html

I have honestly never seen any pro making a living from this who doesn't at a very minimum have MA's up on their chart.

Trading is my only income and I use MA's, bollinger bands and an oscilator.

Our Grey1 is another trader who springs to mind who I have witnessed trading live numerous times and making excellent money with great consistency using indicators, CCI with MA's.

TWI who was at a prop firm where many made 50 to a 100% per month and is at a hedge fund now used TA and RSI, and said that many of his colleagues used bollinger bands and oscillators.

Or our BBmac here who uses indicators, etc etc.

Dan Zanger turned 42K into 42 million using TA for Christs sake.

Paul Rotter has an 8 figure income using TA.

Maggi made 55000 % profit in one month in a documented trading challenge of ABN AMRO using TA haha.

But then these people trade, and don't go posting nonsense threads with absolutely zero value added apart from attention grabbing smoke and screens with no substance or value added whatsoever.

I will guarantee you 100% that you will never ever see any live trades from this guy because all he has to offer is hot air.

Only time Socrates tried trading live the only sorry results were losses after losses too weren't they haha.

 

[Splitlink]

TOTALLY agree !!!

What a totally empty, attention seeking bull**** thread.

Is this guy Socrates resurrected ?

He too only ever posted crap and couldn't trade his way out of a paper bag if his life depended on that either lol.

Market Wizards Linda Raschke and Marty Schwartz used TA and indicators and made fortunes.

Marty Schwartz averaged out at 33% per month in fact using moving averages, bands, and oscilators lol.

Marc Sperling who I have seen trade has been around for ages has made millions trading with moving averages:

http://travel.nytimes.com/2008/04/14/nyregion/14partying.html

I have honestly never seen any pro making a living from this who doesn't at a very minimum have MA's up on their chart.

Trading is my only income and I use MA's, bollinger bands and an oscilator.

Our Grey1 is another trader who springs to mind who I have witnessed trading live numerous times and making excellent money with great consistency using indicators, CCI with MA's.

TWI who was at a prop firm where many made 50 to a 100% per month and is at a hedge fund now used TA and RSI, and said that many of his colleagues used bollinger bands and oscillators.

Or our BBmac here who uses indicators, etc etc.

Dan Zanger turned 42K into 42 million using TA for Christs sake.

Paul Rotter has an 8 figure income using TA.

Maggi made 55000 % profit in one month in a documented trading challenge of ABN AMRO using TA haha.

But then these people trade, and don't go posting nonsense threads with absolutely zero value added apart from attention grabbing smoke and screens with no substance or value added whatsoever.

I will guarantee you 100% that you will never ever see any live trades from this guy because all he has to offer is hot air.

Only time Socrates tried trading live the only sorry results were losses after losses too weren't they haha.

No, old friend, there's truth in everything. Including the saying that there is no one so blind as he who will not see.

I'm not in TE's camp. He's proved nothing to me but he has put his finger on the button that makes a lot of failures in trading. Much of TA is BS.