Gut or TA

I was taught momentum analysis by someone named "Smokey" who started his career on Wall Street on a catwalk changing prices with chalk, 30 feet above the NYSE floor, and retired as head of Goldman Sachs's US trading operation for 25 years. He's trained most of the top "head" market makers that anger most daytraders today. He used to tell me, "Ramoutar, momentum is the fire and charts are the smoke. Wanna see who lighting fires, or choke on the smoke?" They called him "Smokey" because he smoked a Cohiba with the right hand, and a Lucky Strike with the left at the same time. Surprisingly, he didn't choke. I was taught MA in 1991, and didn't use charts until 1994. I was able to combine both analyses successfully. I thank "Smokey" every year when I see the accountant. MA is one of the least used and most effective analytical tools. Alot of technicians believe that it's part of TA, its very different. Let them keep their popular belief, its better that way.

By the way, Smokey and many other "Big 7" traders referred to it as "Momma", I use MA, although I'm a Momma's boy, but she doesn't help me with my trades.

 

I think TA is good (hey, I'm not knocking it, I use it too), but gut feeling is the best indicator, I think. I think the gut feeling I'm talking about is different from the rash decisions one makes.

It's like you know it's there. It's like you know when you get out. It's like you just know it like you've never known anything before. It's like you see it before it happens. Your heart is in perfect rhythm. You're head is totally clear. And when it happens exactly, down to the cent, as you saw it and you get the top prices, you're not surprised at all. You're not excited. You're not amazed or anything. You knew it was going to happen, and that was just that. You just say, "Yep".

How to get to this point consistently... Well, that's the billion dollar question.

Jake

 

50% TA
50% Gut

** I know that sounds generic -- it's not.

The "gut percentage" should increase with every year you trade. Those who say gut is not a factor should talk to some of the boys (err -- geezers) at the MERC!

In the end, it really all comes down to -- I hate to use a tired old term -- but, "money management." It's true.

dog

:eek:

 

I believe your confusing "gut" with "instinct" and "discipline". Instinct and discipline are cerebral qualities. The trader's instinct is an inherent quality, that becomes readily useful only after it has been carefully shaped with knowledge and exercise. Discipline is developed and strengthened like a "muscle", and it is what regulates the instinct, and seperates it from the "gut".

How to get to that point consistently? Use your cerebral qualities, and save the gut for nice meal and a glass of wine. Keep the billion dollars too!

 

jai,

i thought you were refering to the old day trader's speedometer ! can you elaborate on momentum analysis ? where can i find information on this technique ??

thanks !
surfer

 

always said:

"The HARD trade is the winning trade"

AKA: If it's too difficult for you to pick-up the phone or ( in this day and age make a keystroke to place an order), then that my friend is the HARD trade.

Atleast that's what my former boss PTJ always said, and he picked it up from RD.

 

Hmm? Speedometer. Which office was it where you heard / learned “speedometer”, and who? You are a “true” survivor; my hat is off to you. Consider yourself one of the elite, “in my book”. There aren’t too many people still around from the “speedometer” days, pat yourself on the back for me, J

Speedometer is/was 1/100th of the momentum analysis world. MA is rarely found, known, discussed or taught. I have yet to find anything (book/seminar/video/ or a person) that teaches it. I was fortunate enough to learn it from one of the best, and have great success with it. There are a few basic principles:

1)Momentum’s scientific definition is mass x velocity. “My” market definition is “volume x sense of urgency”. For instance, ONE of the strongest momentum indicators is OBV (on balance volume). Unfortunately for many, and fortunately for very few, this indicator is kept in the TA realm, and often overlooked when its buried in the “screen spaghetti” of ma’s, stochastics, etc. It is not a technical analysis indicator it is a momentum indicator.

2)The analysis of momentum uses leading and real time information to derive at a probability and expectancy of pattern continuation and failure. For example, there are “several” canned setups that depend on reversal bars and their completed formation. MA gives the DNA of the greed and fear in each candle, and with tools such as OBV, the expectancy and validity can be pre-determined with “crushing” accuracy. The market’s “setup” students are whipped out of failed patterns and too stunned to enter at the right time, or are too undisciplined to wait for candle completion. This analysis will help you find them trembling as they sit there naked waiting for the market’s next swat, and you’ll see the institutions rip in with blocks. A truly amazing picture.

3)The combined MA and TA analyses help determine whether or not the “war” between the buyers and the sellers, was a “world war” or a “street gang fight”. The analysis shows if there is “institutionally sponsored” volume or “novice urgency” volume. That determination gives probability on continuation or failed patterns respectively.

4)TA is not only a self-fulfilling prophecy, but all of the technical indicators are derivatives of trades and time of the trades. Regardless of the timeframe, the trader must always wait for the candle to complete to increase their odds..

MA is an awesome counterpart of TA, they compliment one another. That should help answer your question. Again OBV is only one of the indicators, and resources. If you would like to chat more, send me an email. I have shared some of this analysis with some of ET’s other Elite and Senior members. Many of them are experimenting with it, and I look forward to their “open” comments.

 

Your former boss WHO? If this isn't a joke then tell us an interesting trading related anecdote about PTJ.

 

TA gives me a set of signals... gut acts as a filter on those signals... trades made must first make it through the TA filter and then through the gut filter...

 

TA and pattern recognition ..

Trading off gut has no consistency unless you've been at this for a decade.