Registered: Oct 2010
04-03-12 09:45 PM
Quote from j0b0123:
predictive indicators all have 1 major flaw - the degree of the prediction direction.
I have worked on these for years - it is very tough. You can call a turn in the market ahead of time but how big will that turn be? Will it be a 1% drop or a 3% drop? Without a magnitude attached it is hard to trade them. Its the "small turns" that chew up a trading system - too many of those and it eats away at the big winners.
Even the big winners that happen can appear almost identical to the small losers that happen in a fake out move - only to continue in the turn direction. Meaning if you looked at both of them (without seeing the rest of the chart) you would be hard pressed to tell the difference or which one would work.
If someone could simply predict the magnitude problem for me I would be rich
I don't think you have to predict magnitude, but you have to be able to stay on board until a trend is done. If you can do that without getting out too soon, you will be fine.