It has to be a playback, so there is a continuous updating aspect to it. It is not realistic to have a singular time slice. Every bar that is put out there, has a chance to change EVERYTHING or nothing and everything in between. Which bars merit evaluation and which don't is a serious question to anyone who actually trades. When is the previous analysis invalidated? What if I can't finish my analysis before the next bar happens? What happens if the previous bar and the current bar contradict the analysis? Are you paralyzed? All this "look at this chart" and tell me xyz is armchair kiddie stuff and not at all serious. One has to get real about it, as in REAL-time. There are examples EVERYDAY in thousands of charts. Just get to work and place your entries and exits. Also I don't know about the concept of "fairness", as I have never really encountered that preparing for an entry or exit. If some Fed president makes a comment and the entire chart blows up in a double whipsaw during lunch hour, is that "unfair"? Was it fair the morning of 9/11? It is ThunderDome. Trading requires a lot of experienced based skills, keen concentration, precise actions, and relentless effort. It is not a matter of being "good" as the OP wants to know, it is about doing all the parts well over and over without messing up. I am out.
I would probably see a double top and be either short or nervous to go long. Probably one of the reasons I exit too early as well,because I expect price to react to the levels. Thats why I'm interested in PA or some other analysis around these levels to allow me to identify the sort of strength that would push through and continue on its way.
probably but you would need a larger sample size to get a “statistically significant” result that drowns out the noise. personally I think your conclusion is correct. I don’t think price alone (in equity delta space) can predict the future; or if it can it will be at a terrible risk adjusted return that would be pointless to pursue. Otherwise smart hedge funds would be all over it as the data is easy to obtain and there’s no barrier to finding the alpha. I do believe price action has alpha in other markets
Yes, but it need not be discretionary, or if so then minimally. At least as it pertains to entries. I think exits by their very nature have a heavier discretionary emphasis. At least for me.
Interesting. I didn't even think about a distinction between equities and other markets. Since I haven't traded equities, I can't say I have a formed opinion on the matter. Why do you think a distinction exists? Also, and maybe it's just me, I don't really like the term "prediction." I think there is a marked difference between identifying a good low-risk bet and predicting the future. Getting in on a wave with a view to at least being able to get out unscathed, but with the hope or expectation of more, is a far cry from predicting.
I'm not aware of the guy, but remember when Citadel hired a group of scientists and analysts to make weather predictions? https://www.ft.com/content/d92e7f30-b4da-48b2-8fff-fd59fda751e1
There was a thread on here about a guy who said the price action in BOIL was predicting colder weather.
If you can determine a fair value for an asset the price action will either represent a change in that fair value or a flow imbalance. In several markets it’s often enough a flow imbalance that you have positive expectation. Stocks and futures won’t work, but the futures basis could be one of those.
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