Been studying a lot of TA a long time - too much, too long. I think one of the things learned from good TA traders is that this whole thing of searching, searching, searching will fuck you up because you must - at some point - settle down and settle on something. Something you can actually trade. Then trade it enough to find if it has a viable statistical edge. In fact, if you watch enough YouTube videos, a lot of TA gurus say this, the good and bad ones, even some of the idiots (and all of the fakes- utilizing their techniques, natch). And, of course, this is a certain, utter, indisputable truth. Except I'd like to dispute it, somewhat. In a way. Absolutely, find a technique, determine some setups, establish Risk/Reward and Money Management parameters, create or buy a spreadsheet, journal it and trade it. But, while you're doing that, continue to study various TA philosophies and methodologies. Approach your study not with the intention of finding the latest and greatest, or even the oldest and greatest, rather with the POV of gaining a deeper understanding, a well-rounded sense of TA from a broad perspective. If one does that, I think the many, many ways that various styles of TA fit together can reveal and clarify a whole that is greater than the sum of its parts. Let me give some specific examples, simple but relevant and very real: A classic Wyckoff consolidation following an extended rally consists of a buying climax on high volume followed by the "automatic reaction" to a low, these two swings establishing the range resistance/support, then the "secondary test" which is a rally to (preferably) an upthrust of the climax high on lower volume, another reaction, then a third rally to a lower-high, a shallow test of the upthrust - Wyckoff's "last point of supply" - on still declining volume. Then a breakdown. Of course, this is the ideal and there are many subtleties and variations. It's rarely this clean (though, sometimes, it is indeed). Of course, most will recognize this as also describing a classic Head & Shoulders pattern, or one with its many variations. Those familiar with Market and Volume Profile may deem the consolidation as a "balanced market" with Value Area Highs and Lows. Also, one may see some kind of triangle pattern within the range - ascending, descending, symmetrical - what Wyckoff terms an "apex"; in a Volume Profile this may very well occur at a High-Volume Node. Here's an example maybe not so obvious at first glance: One of my favorite "Wyckoffians" is David Weis. It's been a long time since I've read the original Wyckoff course so I'm not sure if this is David's adaptation of the technique (of which he has many) or if it's from The Man himself, but in David's book he talks about "tests of high volume or vertical areas where trends accelerated". Natch such price behavior is usually climatic, at least in the short-term - and certainly on the lower timeframes - so one then attempts to gauge the strength of the trend via the nature of the reaction swing. The nature of that reaction is extremely important. Using Volume Profile analysis one would look at that same vertical area but instead of the time-based high volume one would consider the price-based low volume node, a "rejection area". So, from one TA perspective you're looking at high volume, from another, low volume. If you understand what you're actually examining then the two techniques have a synergy. One might also use Fibonacci levels here. In Wyckoff there is that 25% - 50% - 75% area (which I prefer over classic Fib levels and which are approximate anyway) which is one way you measure the validity of the reaction. When analyzing the individual bars at inflection points and other significant areas, one might utilize Candlestick patterns or (my preference again) individual candles - doji's especially can be very revealing and fit with Wyckoff analysis beautifully. These are probably basic examples. As I said, with this kind of study, it's primarily about the whole, not the parts. And maybe this is all obvious. But one thing we learn is that when fine-tuning our trading techniques we must use only that which is actually productive, discarding all else. It only makes sense to me that that process can be made more efficient the deeper the knowledge and the more expansive one's perspective of TA. The more you know, the less you know you need to know to read a chart because there is so much synergy with those few vital (to you) TA elements you have selected.
I believe the best advice from experienced traders to be to start from the longest timeframes and get that right first. Not necessarily becoming amazingly profitable from it, but as a base for further narrowing down background context. It's faulty thinking to use an indicator period of X and hope and pray it has remarkable meaningful predictive qualities (probability and reward-wise). Shared knowledge such as TA may help to see the markets in new ways in order to make up the rules and improve. Without it, I believe most of us would be stuck in even more incredible ways than now! Second best advice is maybe starting to think in probabilities, instead of hoping price and volume will perfectly repeat itself.
Factors that reduce the amount of information that one needs to process in order to make sound decisions: 1) A repeatable and numerically replicable process whose heuristics aren't subject to "interpretation" 2) investment in asset classes that represent underlying growth of products or services 3) viewing investment in terms of longer term trend ( trend is established via the assimilation of expected growth of earnings, persistence of credit cycle maintained by monetary influences, growing workforce, innovation, etc. ) vs. short term trend randomness and chaos 4) signaling / transactions made on static, predefined dates - Don't quit your day job - Don't use leverage - Open a Roth IRA - Sometimes money is made by sitting in cash - Don't be a hostage to the markets - let the markets, profitability of the U.S. economy work for you
one will die (literally or as a wannabe trader) before he will "get that right first" "from the longest timeframes " always start with short timeframes, but not the shortest
nope while one doing that (on paper), he should stop studying anything, until his results will indicate to him that the method does not work if one will trade the method, however flowed, while continue studying one will always be questioning his own the method thru the prism of the new studies, therefore producing doubts in its viability, the impatiens, they talk in other thread, etc, etc it maybe not viable method on hand , but only the results of trading it should indicate that when result do indicate that method is not working as desired , only then one should proceed with "study various TA philosophies and methodologies".
%% Good points but main [longer] trend sets the -prices -long run-LOL; good points. And dont forget to write down plenty , plenty of bid prices + closing prices -many learn better when its in writing.My banker dad said ''son always get it in writing''
it does not set the prices, it indicates directions and borders of the trends in this frame one can and should trade against the trend in the bigger frame but the speech is not about it its about the fact that longest tradeable time frames should not be traded at all - not weeks, not often even days for those who just learning
Got it Investigated longer timeframes. All possible timeframes in fact, and nothing special beyond daily TF in regards direction and borders It's never about an absolute recipee on how to achieve success. All great masters of life are only pointing the direction.
David Weis' explanation of Wyckoff's work is the closest thing to a holy grail as far as TA is concerned.