are we just making things complicated?

Discussion in 'Trading' started by Gordon Gekko, Sep 13, 2002.

  1. If you're talking about trades that last longer than 30 seconds, I don't agree. In fact, I think it's very much the opposite.

    I think to really be able to take advantage of market swings, one should know as much as possible about what factors influence that market, as well as all other markets which might give any clue as to what the nature of the move is. I don't think one can take the easy way out and just watch price alone -- it may suit one's style to do that but imo, to be able to really trade with confidence and not second guess every pullback or drawdown it's important to have a good "thesis" or idea about what's driving what.

    A simple example is a company that reports a blow-out earnings report and yet the stock barely budges past it's 52-wk high -- doesn't that color your judgement about the future movement of the stock? An explosion at a chemical plant (today) sends the dollar into a short dive, yet before the smoke even clears on CNBC the yen is already back to its weekly low -- there's another clue that's actionable. I don't think it's a good idea to just jump to conclusions with every story that comes across the wires, but each just serves as an additional hint as to what is going on -- I'd say price action, volume, and charts are just more "hints" along the same lines.

    If anything, knowing more about all the different markets (equities, treasuries, currencies, metals, etc) and how they trade off each other makes things a hell of a lot more interesting than just watching a single number go up and down. jmo . . .
    #11     Sep 13, 2002
  2. Aphie!

    Old EGO is begging you. Please, please, will you STOP FUCKING POSTING THIS MINDLESS DRIVEL! I know you must be pulling our chains. No one could be as irony proof, duplicitous, ego-centric, naive, and endlessly inane as you. But enough is enough. Can you just start trading as soon as possible, blow your 5k in a month and leave this board and poor Gordon alone!
    #12     Sep 13, 2002
  3. You probably already know where I stand on this issue...but I'll restate it anyway.

    I'm not a believer in indicators of the type that come on the software MACD, stochastics, etc etc. Frankly, I'm not much of a believer in intraday charts either.

    The problem with indicators is that you put them on your chart, the next thing you know you're trading a "system", instead of trading the market. There's a distinction here worth thinking about.

    But worse, the fact that I've got these indicators on my chart now INFLUENCES what I think about the chart. Here's a simple example.....I put a 20 bar average on the chart. Now when the price gets around the average, I'm wondering if I should get in/get out, just because there's a squiggly line there.

    Stochastics is my The price shoots straight up...stochastics gets overbought. Oh oh. Should I sell? For sure I can't buy. See the influence these things can have? Did I really need stochastics to know that the price just shot straight up??? Ever seen that stochastics dribble along the top edge of the chart, overbought the whole way up?

    I don't mean to be too hard on these indicators: if you're using them successfully then more power to you. But me...I have a different idea. I think the market does what it wants to do, based on the participants. I try to figure that out....and I don't need an indicator to do it, and I don't want an indicator to influence my judgment.

    I like to watch the market itself. I like to watch the key stocks. I watch how things react to news. Take today: the Michigan number is worse than expected....but we shrug it off and trade higher after the initial knee jerk reaction. That tells you something.

    Again, there is no substitute for intelligent thought. Think about it. Bernard Baruch is a name synonymous with intelligence. The man was an advisor to Presidents. Do you think this guy was watching MACD? LOL.

    I said this once before, but I'll say it again: We use indicators because they give us the illusion of control over a process that is basically not controllable.

    Learn to use your eyes, ears, won't need MACD or stochastics.

    This game is more about managing the trade once you have it on than the process by which you pick it anyway.

    #13     Sep 14, 2002
  4. OldTrader,

    Great post. Although I'm sorry to say that I can't give up my intraday chart. If I trade without it at this stage I'm just pissing in the wind (gail force, coming right at me).

    Thanks for the insight. I agree with what you said.
    #14     Sep 14, 2002
  5. One other thing:

    The market ALWAYS tips it's hand before it makes a move of any consequence. It's your job to have your mind in condition to be able to see the clues that will be presented to you, and then have the boldness to act on them.

    You want your mind to be clear of preconceived notions as well as you can. To me that means I don't need to be influenced by indicators.

    Think back to just a few days ago.....9/11. We've had a few days up...and that morning in a frenzy of patriotism we gap up.

    If you'll look back at your charts you'll see that on the ES we broke down around 930....meaning that the area is probably resistance.

    Now if you'll go back and may surprise you to see at what time some of the key stocks turned MSFT for instance. By 1PM EST a number of important stocks were in the red.

    Believe me...there was plenty of time to get didn't even need to do it at the high....we had about 50 points ahead of us on the downside. And it was pretty much straight particular heat on the short side.

    Did you need indicators? I don't think so. We were in resistance....people were bullish....and stocks started acting different than the perception. Those are money making conditions.

    Hope this helps.

    #15     Sep 14, 2002
  6. Oldtrader,

    This is what I hate to see on a chart. How do people trade this!?
    #16     Sep 14, 2002
  7. LOL! Ask them! Not me. Gives me a headache!
    #17     Sep 14, 2002
  8. That chart is my personal ATM machine!
    #18     Sep 14, 2002
  9. the 5ma is the basis of the universe.
    #19     Sep 14, 2002
  10. LOL :D
    Daniel_m, finally something we agree on! Hehehehe.
    #20     Sep 14, 2002