can price action predict market moves

Discussion in 'Trading' started by geth03, Mar 24, 2021.

  1. Fair enough, but it does not form part of their alpha generation, their edge, how they derive value. Charts are often pulled up when a buddy calls up and points out a certain asset to take a look at. Nobody trades based on that. Nobody trades double top formations, doji patterns, moving average divergences, or buys a stock which price exceeded a certain "resistance level", not based on a chart, certainly based on data, yes. Charts are as you said to take a quick glance at past price action, but it does not perform as tool to make future trading decisions.

     
    #141     Mar 29, 2021
    geth03 likes this.
  2. Did you fix the issue with your charts? :)

    https://www.elitetrader.com/et/threads/strange-bars-on-ib-charts.353868/
     
    #142     Mar 30, 2021
    themickey likes this.
  3. #143     Mar 30, 2021
  4. themickey

    themickey

    I don't trade off charts but there's possibly some traders here who ONLY trade one or two instruments, eg ES-NQ and they can't code algos so they just trade off maybe the same chart with differing time frames.
    Possibly volpri & speedo?
    Kind of seat of the pants trading, experience has given them an eye on high probability patterns.
    Imo, its hard work, time consuming, maybe a bit stressful way of making a buck.
     
    #144     Mar 30, 2021
  5. To each his own I guess. I just notice how those guys could still not explain why nobody in the industry uses charts much. The mates here must have some special, secret edge nobody else ever came across.

     
    #145     Mar 30, 2021
  6. #146     Mar 30, 2021
    Laissez Faire likes this.
  7. themickey

    themickey

    Probably has to do with Al Brooks teachings.
    When you're in a cult it's hard to see outside it. :)
     
    #147     Mar 30, 2021
    DiceAreCast likes this.
  8. Im surprised this conversation is even being had by so called "experts"

    Its very quite simple. Charts produce patterns that have a probabilistic edge. What big boys used them? Well, Renaissance Technologies - you know the most successful HF ever (not necessary based on chart patterns per se but patterns having to do with price - the numbers behind the patterns)

    How come most other big HFs dont use them? Because the strats for a 100mil - 1bil + portfolio are going to be different than your typical trader that doesnt even have a 100k trading portfolio.

    One is making markets, the other is following the market therefore it requires different approaches. Nothing is 100% when using charts and it seems the most people who complain about charts are wanting a magic pill to make it 100%. Simmons only had a 50% win-rate, generally speaking.
     
    Last edited: Mar 30, 2021
    #148     Mar 30, 2021
    Akox and sridhga like this.
  9. geth03

    geth03

    once again:
    i know that at the end of the day what matters is, how much money one made, right?
    so based on the little information you gave me, you would expect me to say "yes". i would be insane to say "no".

    a basic backtest result will give a first impression of profitability of that strategy,
    to be really confident when pulling the trigger, i would need more information on that strategy.

    like i wrote in my earlier post, what is MAE, MFE for that strategy? money and risk management? did the strategy perform better in one market environment?
    did it outperform buy and hold of an S&P 500 ETF with reasonable risk and heat?
     
    #149     Mar 30, 2021
  10. Just poking at you. :)

    I’m not sure what point that would be.
     
    #150     Mar 30, 2021
    DiceAreCast likes this.