Because they're shortcuts. Or seem to be. Or are claimed to be. I've said before than indicators can be very handy for scanning, e.g., look for all the stocks whose 20d XO their 50d yesterday. And once candlesticks became standard issue in charting programs, their popularity exploded, in large part because one could scan for them just as one had with other indicators.
But all that these scans can do, whether computerized or visual, is plop one into the more or less relevant part of the territory, like a parachute drop (sometimes a parachute drop at night). Once landed, one must then pull out his maps and check them against the territory, and, if he finds that they don't correspond with reality, he must dig out his pad and pencil, re-examine the territory, and start again.
We are sliding into the inevitable vortex of complexity with this debate about Pin bars, a debate fueled by that hoary old chesnut called perception.
I was re-reading Taleb this morning and the thrust of his mighty tome are in these five propositions, unfortunately he presents them as platitudes and thus shoots himself in the foot, after all they are only his perception of the Universe, a narrative fallacy of his own perhaps.
1. We focus on preselected elements of the seen and generalise from it to the unseen: the error of confirmation.
2. We fool ourselves with stories that cater to our Platonic thirst for distinct patterns: the narrative fallacy.
3. What we see is not necessarily all that is there: History hides Black Swans from us and gives us a mistaken idea about the odds of these events: this is the distortion of silent evidence.
4. We behave as if the Black Swan does not exist: human nature is not programmed for the Black Swan.
5. We "tunnel": that is, we focus on a few well defined sources of uncertainty, on too specific a list of Black Swans (at the expense of others which do not easily come to mind)
I could argue for and against all these points equally and that would have nothing to do with the truth of the matter. It would just mean I was good at arguing.
Sometime ago on these boards a member demonstrated that he could see 'Wot happened next' by looking at a candle chart posted by Barjon, and he did this several times in an extraordinary fashion with great accuracy if I remember correctly.
If we take the holographic view of the Universe then the future is not only one outcome but a set of probable futures and a master trader such as the afore mentioned member illustrated this perfectly by selecting the most probable outcome based on his perception of previous events.
As the Bramble's signature states;
Direct knowing, without conscious use of reasoning, can only come after extensive training and preparation
and I have a perception that this true though I don't yet know it.
(hopefully both with preference for the latter if he is showing others what to do!)
