Predicting the results of patterns must be trying at times. Why do prediction?? Making money is done in NOW based upon the data set of NOW. Were a person to get by the pattern lagging indications, what would he focus upon? If you are only looking at NOW and find that this is THE important and only data set of importance what are the possible conclusions that can be drawn from the NOW daata set. We all know. It is the finite set that is defined by the number of combinations possible by the data set elements. Luckily all these conclusions call for a rather small set of decisions. How many? 5. Hold, reverse, wait, enter and exit. All listed in order of frequency of actual use in trading by experts. How do pattern people get stuck in that place and why are they so tied to prediction when money is only made in NOW? Who knows? What single thing are the five decisions always and invariably tied to when a person uses them as he does his routine? There is only one thing. Deciding on each data set conclusion occurs quite fequently for those who are making money. If a person is making money all the time it is offered, then he is watching closely to assure that he is continuing to make money. Data set after data set. Looking at one thing only. As a person gets down to trading in NOW and looking for one thing only it is not too complicated any more.
Good points Grob! Of course for day traders everything is in the now. But for position traders, now is just for evaluating the progress of the position verses what was anticipated. Position traders do make targets. How else could they apply the risks vs. rewards.
Position traders can, likewise, get past where you are. The alternative to targeting comes on two different levels. Repeatability and reliability characterisitcs of stosks for position trading allow a person to determine how much money he is making per day. Ranking (%/day) affords a person to put the universe in a sorted order. When a stock's percentage for a day begins to wane, then a rising precentage stock replaces it. Having a universe of high money velocity stocks (3 beta and better) and cross over trading them is quite different then what you speak of. Such universes range in rank from 4 to 7 percent daily, normally. About 5 pairs of variables are used to determine the crossover dynamically use data sets taken NOW. You will notice there is no trageting nor is there and risk consideration. compounding occurs daily with values of 4 to 7 percent put in the formula and the annual compounding uses about 240 days in the year as the exponent. You are suggesting a betting and targeting approach is your orientation; I would imagine that you use stops as well as a protection. I feel it is much better to be very risk adverse and only have extremelt reliable and repeatable stocks is a very small universe of the most excellent stocks for making money. Today the monitoring tools automatically bring the available stocks to the top of your lists right from the daily open. The same is true for stocks you own. On a daily basis in real time they arrangethemselves by their current money making performance. Volume is used to determine the real time ranking; their % gain during the day is right there to see as well. 4 to 7 percent per day compounded daily is a very different type of money making than you are speaking of by doing the predicting, bettin, protecting and hoping. there is a great value in continuous monitoing using a NOW based strategy for performance under conditions that are very risk adverse. some people find this approach to be "unbelievable" It is just there for he taking, however and onlt depends on knowledge, skills and experience. Coomonly things get to be unbelievable if a person has no standard of knowledge, skills or experience. It is conventional in most businesses to use people who have knowledge, skills and experience to support the work a business is doing. these kind off people as actually in great demand, I am told.
I understand using "read" versus "predict". It does tend to get not quite so much criticism. However, part of what I'm talking about is actually prediction. Today's oil headlines for example. For weeks, I've been talking about "huge new supply" coming into the oil market. For weeks, at least 4. At the time, I was thinking along the lines of all the new extraction methods. Why did I feel like focusing on THAT when the rest of the market was focusing on RISK? Couldn't say, but new supply felt like something to focus on. And now today happens. Huge new supply discovered right in our backyard. I've been writing today's headlines in oil for 4 weeks now on some internet forums, somewhat without knowing I was doing it. But I did know to TRUST it in order to be right this market. This sort of thing has been happening over and over again for the last half year. If it were isolated, it could be coincidence. It still might even be... but eventually, I have to lean towards something other than coincidence. Plenty of guys are going to have plenty to say about this. Lol. It's always funny to me when they do this. I don't understand it completely, but it happens anyway. Now a bunch of guys who can't do this are going to come out and say I can't either. Lol!
Grob ... again a very good post. And I would tend to agree with most of your statements. However, for me at 60, I'm not about to get wrapped up in the market 8 hours a day. For the younger generation, why not? The universe of stocks that I follow is very small. Usually only leaders within their particular index. And I'm talking a major index, not these fly by night newbie ones. I like to know that stocks that I invest in and follow them daily as they trade. Now I only invest in them when their particular index is in an uptrend, which creates support to their rising prices. Other than these few stocks I usually just play the indcies themselves. They are kind of an added punch. Over the years it has worked out very well. And I does use mental stops both upon entry and after the stock/index starts moving in the expected direction. My general nature is adverse to risk. So I try to pin point entry and exit points well in advance. Naturally, I'm not always successful, but the majority of the time "spot on".