A farmer doesn't make his money knowing summer comes after spring and that seeds produce plants. He makes his money owning enough arable land and knowing the right techniques to be able to cheaply and properly raise a crop to sell to consumers who don't have the same resources. Who are YOU making money off of, when you trade by the charts? My best guess would be other people looking at the same exact charts who are just a tad bit slower in applying the same principles every single TA book has espoused since Edwards & McGee -- not much more. So tell me, who is misleading who here?
Guys, its another pissing contest. FWIW illiquid its my observation on any future I've looked at that I can make money with some simple chart patterns. I always have a couple of emas chosen because over long periods of time price (=players) seem to respect them in a statistically significant way to give me direction. Then patterns (doubles and triangles) give me entry opportunities. You still have to seek entries where the risk/reward makes sense. You still have to manage your exits. But the basis is a pattern on a chart. Someone else might trade the dom, someone else market profile, etc etc etc. And all power to them. And to you. In fact my thanks to them. Because to me it seems that the mix of approaches is what makes the market work. But I do, and I am aware of others who also do, make money from simple patterns of price on charts. Could we make more money other ways - who knows (and probably who cares)?
Don't get me wrong kiwi, I've been around here long enough to know no one gets anywhere by saying you can't trade this way or that. And perhaps I am biased because of the markets I watch, which tend not to lend themselves to simple chart analysis. But I don't think it's a stretch to say that simple chart patterns have lost their effectiveness over the years, especially in the most largest and liquid markets. To study them in isolation, following manuals that were written when most charts were drawn by hand and kept in binders -- well, it's nice to want to keep things simple, but at some point you get what you put into it. Perhaps conditions are such that the most basic chart patterns work again because many like me don't believe in their effectiveness anymore; that wouldn't surprise me at all. All I'm saying is that people should really think and ask why a shoulder, a head, followed by another shoulder, should necessarily lead to a down move. And why, in this day and age of instant information, would that 2nd shoulder ever be allowed to form, if the discounting game had already taken into account that most weak hands will be looking for the 2nd shoulder and broken neck-line sell signal? Etc etc etc.
since some of you are being so difficult here is a LIVE example I am trying to buy NAS Futures, I don't want to buy at 1500 nor 1499. chart study tells me that 1498 is excellent entry, if it ever gets there. without chart study I would just buy at 1501, there you go, is this question settled
1503 now, doesn't wanto come down that's fine you little freak I'll wait for you at 9:30 AM you will come down, and if you don't, go to hell (and I'll see you another day)
You are assuming here that everybody is using the same charts the same way. It is obviously not the case. Also you simply don't know who is on the other side of the trade and what is his reason to take that side. OK, let's say I trade simply on fundamentals. Who are you making money of off? People who has the same information like you have? See, if your argument works against me (it doesn't ) it also works against you. Anyway, I don't really care if you believe in charts or not, you should actually be happy, since you don't use them so you think you have an advantage to people whom using them./ But would 15 winning trading signals in a row convince you that charts work, supposed I post it here in realtime? Oups! I already did! Again, you believe what you want and I know what it is...
Actually, if there's one group of people you can easily prove you are "profiting" off of, it's the chartists. But like I said earlier, I don't feel charts are worthless, but studied in isolation they are always behind. Sure there are certain markets where they might prove profitable -- the smaller that market, the less competition from others trading off charts, the more likely that is possible. But they are pretty much rear-view mirror when it comes to any of the largest and most liquid markets out there. Be my guest and post 15 straight winners on the forex, stock index, or treasury markets, on whatever time frame you like. But I agree, why bother trying to convince me? I wouldn't.
Before I was a trader I was a pro gambler on horses. I read the betting theories and lifestyles of 6 of the best gamblers ever, and the 3 things thay all had in common was... 1) They thought their way was the best if not the only way to win. 2)They all described idiotic ways to gamble that were sure to fail 3)Each used a method that the others described as idiotic and sure to fail. Trading is the same. I like it when someone is convinced that other methods can't work but really believes in their own. However, I have little time for those who say nothing works - this is the mindset of a looser in life. There's loads of ways to make a killing on the markets, I know a few but it nearly killed me getting there. If you want to be good, spend many hours studying and creating your own style. If you want to be great, you'll have pay a much bigger price than that!