can price action predict market moves

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

  1. On such random patterns that got you in at the first time you can generally only make good on the loss by increasing your bet size, which often leads to a martingale approach. In the end that is why so many traders fail, they pick up pennies in front of the steam roller and every now and then easily gamble away 10% or so of their account because it only takes this one out of x times to not reverse.

     
    #261     Mar 31, 2021
    stockpredictor likes this.
  2. Under the right situations, but pretty much yes.
     
    #262     Mar 31, 2021
  3. You assume they are random. However, IF the trades follow something even as bad as 60% profit, 20% b/e, 20% loss, and the win moves are statistically significant, then this is not a problem. Keep in mind, many trades are actually on the extreme, and thus a scale out approach in the cases when extreme catch is made allows for runners. To make a loss is quite rare, and a single loss does often eat several small winners. Again, I refer you to the spreadsheet I posted earlier (that thread also contains links to other threads which I made spanning even years ago) and if you don't count that as evidence, there is still the C2 (which I no longer trade on, as I am trading a large private account for a portion of the profits made) which has the greatest risk adjusted returns on the site (not counting single home runs of others)
     
    #263     Mar 31, 2021
  4. You claimed something you can’t prove or back up. And I already arrived at a balanced conclusion. :)
     
    #264     Mar 31, 2021
  5. #265     Mar 31, 2021
  6. this is a well known phenomena called volatility clustering, there's lots of research on this. charts are actually very ill equipped to analyze this. and there are better ways of spotting this.
     
    #266     Mar 31, 2021
    DiceAreCast likes this.
  7. I never had a doubt you would. It was pretty clear you had your mind made up from the beginning, so did I.

     
    #267     Mar 31, 2021
  8. [​IMG]
    You're still not understanding what I'm doing:
    Russell high caught the crash
     
    #268     Mar 31, 2021
  9. The largest danger I see with charts is that they mislead and do not allow for a rigorous quantitative approach. It's never an in or out, always a maybe, possibly...

     
    #269     Mar 31, 2021
    longandshort likes this.
  10. Are you billy hwang?!

    Lol but seriously, you making money on your trading has nothing to do with you using a bad signal. You are making an attribution error by explaining your returns with your chart signal. What are you are likely profiting from is liquidity provisioning or intra-day momentum/reversal. For the former, the best signals are liquidity pre-trade, and for the latter, it's the slope of returns.

    I've sat on a trading floor on both the sell side and buy side for 8+yrs, I've seen the gamut of strategies and no one uses charts to trade because they are very bad at representing what is actually going on. They are, however, visually appealing.

    Good analogy would be a chef applying salt to their meal. "Grab and sprinkle salt until you start to see them pooling" is inferior to saying "eyeball 1 tspn" which is inferior to just using a teaspoon to measure and apply your salt.
     
    #270     Mar 31, 2021
    DiceAreCast likes this.