If 90% of traders fail, and if most use Technical analysis, doesn't that mean we should fade common technical patterns? The moment I see a rising trend, doesn't that mean the edge is over? Something to this effect, "If it's obvious, it's obviously wrong" Fade H&S patterns. Fade moving averages Fade breakouts Fade Breakdowns Fade Fibonacci Fade Pivots When I say "Fade" I mean use them to see what a retail trader would normally do, then do the opposite. The anti-self-fulfilling trade. So, if you see some massive H&S pattern, guess what, the rest of the community does also and it's time to fade. food for thought.
Very true, never follow the retail traders, follow the BIG DOGS as they bark their way along and have fun running with the pack. Retail traders fade because they do not have the moxie to stay with a trend or to catch a trend continuation. Thus after getting slapped around because they do not understand TA and its relationship with the traders innate "Flight or Fight" instincts, they give up on TA trend following as bunk and fade the "noise" of the mkt. Could that be the real reason why 90% of retail lose and 10% of the pros get the meat of the trends? Yep, you betcha.
I agree with you both. That's why trading is so hard. 1. it might be a trap 2. it might go just far enough to stop out people, then actually continue the "right" pattern 3. it might go to some "critical area" and do nothing. Does anyone know a list of the most popular retail technical set-ups? I would guess H&S near the top. I do think they are a fade. Maybe bearish/bullish flags. Double bottoms. Our "job" is to see into the future. we all "see" the H&S potential on the S&P, and I have to admit the guys that print the tape "see" it first. OK, so now what? ah, 50% retracement also common. hmmmm