Anyways, I've satisfied myself that my original hypothesis is indeed true. As we all know, the failure rate in this game is extremely high. It has to be that way for the rewards to be ample to those who are willing to dedicate enough time and money to play the game properly. Always applying critical thought as they do so. Of course, one of the reasons so many fail is because they do not understand the rules to begin with. They dont understand because they dont get a proper education. Instead of studying and coming to their own conclusions, they take short cuts. They try and get education quickly and cheaply. For the price of a few books. Pick up most trading books, stuff on the internet, the majority of stuff in the public domain and it's all the same: Magic pattern or indicators (changing fashions like breakouts or pull backs), risk small, stops narrow/wide. Enter, exit. wait for the next one. Confuse further with 'trading psychology' to explain the inevitable failure. Could making so much money by scaling up such an operation really be so easy? (if it did work) The approach suggested by nojodi and dbsparrow and the like are really no different from these approaches. As Einstein said: Insanity is doing the same thing over and over expecting different results. Trading a different patterns, drawing different silly lines etc is really the same thing. As we have seen, dbsparrow wasnt man enough to participate. At least nojodi is more of a man than dbsparrow. But alas, nojodi is unable to explain the reason why such patterns relationships work. In fairness, neither could I. Because they dont work. Thats why I suggest people keep a wide birth from such people who claim to be successful when they are really trading the same way as the unprofitable who seek their advise. As stated earlier, successful traders rarely have time to post on internet sites like this much because it takes so much time. The job is to trade. And good traders love trading, not talking to wannabees. With that folks, and with risk of being accused of not giving away anything material use in your quests to profitability, it is time for me to leave ET now. My work has been done - as far as my schedule allows. I am a trader first and foremost. I will leave you with this however: Nothing is ever said about trading structures/multi legged strategies. Its always based on outrights. Stocks, futures, whatever. In real life, it's really quite rare (not to say it never happens) for a professional speculator working on a short time frame to trade an outright (flat) structure. Long term traders will - usually based on fundamentals though, perhaps with some TA for timing. Short term speculators trade spreads, flys, arbs, pairs, etc. Thats one reason why they last longer, and another reason why nojodi footprints are BS - because someone may be dumping 10k cars in one market, but lifting 20k in another where the real action is. Your pattern never saw that coming eh? Ouch! Good luck...
It's interesting to hear. I've made a few posts in the past about how it seems that those who are clearly making money seem to hint that they trade market neutral strategies, trade pairs, trade complicated options plays, trade volatility rather than price direction, trade arbs etc etc. Direction plays using charts (and DOM/T+S) really seems to be a pipe dream in general. There is ONE person on trade2win though, who appears to trade directional short term on the Dax, though. About 30 trades per day. Talks about small stops, although also seems to 'average' into trades which is somewhat contradictory? (at least to me) Screen name 'Dowjones'. Posts statements daily and the occasional market call. He's my remaining inspiration that what I want to do is possible. He says that he has lots of charts on his screens (so it would seem TA is at least paying some role) but he's also hinted that there's other 'information' that he uses that he can't discuss (and it's nothing that you'll see talked about online or in books) which kind of makes it hard for me to work out!! He appears to have a definite 'edge' and prints money daily
The only thing that worries me about blindly trading price patterns is WHAT causes them exactly? To know it is important in order to know if they are about to stop working.
I don't think I have ever read more garbage than this put forth so eloquently. You almost sound like you know what you're talking about. The questions you ask are all quite thought provoking. I am led to believe that you do actually know quite a bit about trading. And yet, this is all garbage. Look at the first line. You have satisfied yourself that your hypothesis is true??? You haven't even stated it nor have you shown any proof of it (and just cause you say so isn't proof). Your coin toss example is good, I grant you that, but you don't offer anything else. All you have done is scream that the world is flat and everyone who thinks it is round is wrong and then run away. You keep saying that you understand so well how the markets work, how NoDoji is wrong, yet you haven't offered anything to replace her effective description. You have said her idea about the algos is outdated... so please fill us in as to how it works now. Oh right, you're a trader and far too busy so you're running away now.
On second thought... I don' t think this is such a good example after all. You would think that after 4 heads in a row, it would be tails that you might find is more likely. (although of course its 50/50) But I actually hardly doubt that you would see a 65% bias for a 5th toss if you actually found enough instances. I think if you did this and followed what happens after 4 of the same outcome, you would find no pattern in what happens next. So you're throwing out an example that would never exist. NoDoji uses a very large sample size of the same setup and compares what happens and what she needs to see to have a statistically positive outcome. If you produced your coin data, there wouldn't be a pattern to trade off of.
Sure is easy today. Shame I'm still just forward testing as there have been 2 excellent days in a row now! The money aspect really does cloud the ability to trade well, but when you focus on trading well as you say, the money just falls into place.