Contradicting TA

Discussion in 'Technical Analysis' started by Nutinsider, Oct 1, 2012.

  1. So what do you do when you get contradicting indicators?

    I'm looking at a AAPL september 27th candle and it appears to be bullish engulfing...then next day its a bear harami.

    This is one example, but I'm curious about what you guys look at next when your initial indicators are contradictory? To me is seems choppy and that would be a sign to just hold pat.

    Thanks
     
  2. Candle patterns are meaningless. Just pay attention to the engulfing reversals.
     
  3. If this statement is a joke, it's actually pretty clever and I didn't get it my first read thru.

    If this statement is not a joke, I am confused. I don't see how you can pay attention to an engulfing reversal without paying attention to candle patterns....unless you are saying "the only relevant candle is the engulfing reversal"
     
  4. Kurgan

    Kurgan

    contradicting indicators mean what?if you could thing,you`d know thsat they mean V formation,and capitalize on it.
     
  5. It's not a joke. The only thing important candles tell you is if price is trying to push up or down... And how much momentum it is managing to establish while trying to push up or down... Well... How long it's been pushing up or down is much more important than momentum.

    Notice how I color my candles based upon engulfing reversals and double engulfing reversals. (Two candles engulfed-darkest red/green)
     
  6. One of the most important things to learn in learning to do trading is suppression.

    Of the main principles, this is the last and least learned.

    In making money to extract the full offer of the market, some of the hold period is determined by NOT using data that does not apply at a given moment.

    Over 50% of any day on any trading fractal, data is flowing to you that does not advance the Orders Of Events on a trend.

    All automated systems that take the full offer of the market, have appropriate suppression circuitry.

    I am providing this comment to you because you stated two things, both of which show your helper that you do not get what he said. And there is the fact that you are considering what you are instead.

    to rise through all the skill and knowledge requirements to become expert, you need to know how markets work.

    Part of that includes working through what the market's full offer segments reduce to.

    By clearing away the 50% of the information you are seeing, then you get to begin to focus on what moves a trend from its beginning to its end.

    This may be your day.

    If you could consider suppression, then you may be able to consider that time is not a variable in trends.

    vertical lines adjacent to each other tell the whole story of making money.

    after you have drawn all the possibilites, you see only two show trending.

    My first month of trading allowed me to do this result. I got rid of all those pairs that did not trend and only used the ones that did trend for my decision making.

    the whole nine yards of trading to make money involves using what is left (the other 50%) to be able to see the pattern of the leading variable of price.

    by looking at this variable in terms of adjacent bars, you find out what was made public at about the same time the DOW Theory was first presented.

    So TA works perfectly without any noise, flaws or anomalies.

    most people erect personal barriers so none of this becomes avaiable to them.

    sit with one piece of paper, an eraser, and a pencil and begin.
     
  7. I THINK you are saying "ignore the noise" and just grind the nuts and bolts, right?

    I totally agree with that, and I suppose I am simply trying to determine what is noise and what isnt. I guess most TA would fall under the category of non noise because it isnt as biased?

    Im really not sure, but I'm still reading a lot and attempting to get a better feel of the markets. Regardless, thanks for the response.
     
  8. Kurgan

    Kurgan

    haha...for 'decision making'??LOL...out of those two,it`s very hard now,i suppose...
     
  9. NoDoji

    NoDoji

    The conflict is a result of the near term lower trend line (LTL) breaking on 9/25, but buyers stepping in with conviction on 9/27 above previous support (656.00).

    So you need to take into account your trading time frame and average hold time. If you're swinging for the short term (a few days to a week or so), you have to hold pat until you get some clarity, because YOUR daily trend line broke and it might now become resistance that results in a deeper pullback to retest previous support.

    If you connect the July and September pivot lows, you'll find that your broken LTL was due to be tested as resistance at the exact price where the sellers stepped in. And price then dropped back to previous support around 656.00.

    This is why candle patterns in isolation can be deceiving. Look at the overall price environment in your trading time frame for a period of time that covers 10 times your average hold time. So if you swing for a week on average, draw your key near term S/R levels from at least the past 10 weeks.
     
  10. oraclewizard77

    oraclewizard77 Moderator

    1) Never color candles.

    2) Look at a higher time frame can be used to see the overall trend, then look to a lower time frame for entries. Note, I am able to use 1 time frame because I have good indicators.
     
    #10     Oct 1, 2012