supp and res are good tools,approach a res you can get long,hitting and moving away ,you can get short,nothing works all the time but at least you are not trading blind,patterns are a bonus,add in 2 or 3 or 4 more things and you have a slight or strong probability number,i don't know how any one could trade without an inkling of which way it's going,if it is going in a direction,you have knowledge of where it might meet sellers,buyers,you are so adamant about your point,you can't be full of it,well you could be but what's the point in that,just throwing out one tool as an argument in a market that is traded in 100's of ways,you are even saying what is does before where it is now,which is using past,which you claim is moot,sorry surf,but you seeem to have your shoe nailed to the floor and walking in circles,get yourself free
"So if you want to improve human-computer symbiosis, what can you do? You can start by designing the human into the process. Instead of thinking about what a computer will do to solve the problem, design the solution around what the human will do as well. When you do this, you'll quickly realize that you spent all of your time on the interface between man and machine, specifically on designing away the friction in the interaction. In fact, this friction is more important than the power of the man or the power of the machine in determining overall capability. That's why two amateurs with a few laptops handily beat a supercomputer and a grandmaster. What Kasparov calls process is a byproduct of friction. The better the process, the less the friction. And minimizing friction turns out to be the decisive variable." Shyam Sankar
Mean reversion is a strange phenomena for there is more than one mean due to there being more than one cycle acting in any time frame. This is where discovery of the dominant cycle is most important because it tells you which mean is the true mean for the current swing. Isolating swings from mean reversions has led to many Elliot Wave type wild goose chases while doing the opposite and isolating mean reversion from swings puts too much focus on the mean and misses the reason for an overshoot. Using a 20 ema is a kind of mean reversion except the market is not tuned to a constant 20 ema mean so it works and then it doesn't and then it does. However a good trader will still be able to develop a winning strategy on the 20 ema by recognizing the tells for when the market is playing this level. Trading off the 20 ema can be successful but it leaves you hanging in the wind trying to find the max excursion. There are two fascinating features about mean reversion and the 1st is how the mean acts like a magnet to draw PA to that neutral zone, and it doesn't matter how far or fast PA has moved to get to the mean, it is neither overbought nor oversold when it arrives there. Knowing this is a great aid in deciding how to play the mean because the market may look very oversold on a sharp drop when it is only half way into its stride. Interestingly, when PA gets to the mean it doesn't want to be there, so the mean acts to draw PA towards it from its maximum excursion, yet when PA arrives the mean acts to repel PA again like a spurned lover. This doesn't have to be instant rejection as the PA will often zigzag on the mean to prove it and pay respect and then shoot off. The other fascinating feature of mean reversion is the maximum pain or pleasure threshold (depending on whether you are on the right or wrong side of the move) that the market tolerates. I have no idea why these things happen but it certainly reeks of mass psychology, that when PA gets to a predetermined excursion zone it is reeled back in like a fish on a line only to be cast out again. One of the reasons I like this thread is because it is digging at something underlying price and it is not the fundamentals or the TA, it is the unexplained relationships that somehow tie us all together. There is some form of communication that winners have between them and also a similar bond between losers. There are leaders and laggards with the latter always trying to discover the formers intentions and somehow the math and psychology are inextricably linked. Mean Reversion is constantly in play in every time frame as the market continually breathes like a living organism, but there are more mathematically precise measures of turning points that relate tops to bottoms and Jack has been confused about this for an eternity. Jack is still lost in a world where time is not a variable in the market and one dimension is subject to Failures To Traverse. Come on Jack: time to give up on that conventional wisdom and add a bit of panache to your trading
I read your post and the OP's which introduced your comments by quoting a third party. I find that markets move in cycles. For the two halves, each fails, then provides the foundation for the opposite half. "The Pattern", for me shows this variable (V,P) relationship. I enjoy the complete system I have created by taking direction from market data. I feel that science and mathematics explain it all. Regression never showed up as part of the system of the operation of markets. There are many ways to make money in markets. They are all there operating. Some take little, others fail; I chose to take the full offer of the market all of the time. I made a choice; I did not choose being correct over being rich. Each and every information group helps form the market's cycle of two opposite parts. I chose to "know that I know" for each information group the market supplies. The information groups (volume and price bars) fit the mathematics of Keynes (Paradigm theory), Mandelbrot (fractals) Carnap (logic theory) and Boole (Algebra). fortunately, the instrument units dictate what mathematics can be used to solve the problem. I like the humor of the question: How does regression always keep happening in markets? The answer gave me my working intellectual power. This stepping stone revealed the entwined nature of OOE's. The range of the independent variable is soon known in a trend. I like how this range has its power for the trend's continuation or its End Effect. I'm glad you mention the dependent variable End Effect. The EE begins the OVERLAP of trends. The HERD pushes those who frontrun it. I frontrun mathematically. You and the OP are relatively new to trading. I went through the beginning of the symbiotic relationship of man and machine. That is the time when Carnap's work began to be used to create the electro-mechanical machines. I also when through the beginning of Pascal's influence. Naturally, there were people like you and they got their computers and judged my trading results (SEC and IRS). They were empowered by laws and regulations. They did the walk while you only do the talk. I had to "educate" them so they could correct their mistaken judgements. I have a profile type as a trader; the profile is illegal if improperly evaluated by someone making mistakes. You have no power and only make mistakes in judging me so who cares if you get educated. You do your thing and you participate in markets. The OP sells stuff as a vendor here in ET and elsewhere. He pays a fee to the owner to sell his products as part of his making a living. You may be a beta tester for him; he may have invited you to be.
You've never mentioned your level of expertise in trading. What are your achievements in this field? Are they practical or purely theoretical?
Been discussing objective vs. subjective trading with some other traders yesterday and thinking over it... What is the most important question for me now in the topic of this thread: how do we distinguish objective, algorithmic decision making from intuitive decision making in trading? What are possible verification methods? One guy said it's objective if possible to automate it. Sounds reasonable. But are there any other possible ways to analyze our process of decision making and sort it?
Are you hiring me? I`ll only mention anything as long as there is the reason for that. I`m not an expert,i`m not a Guru,i`m not a Jack''Bullshit'' Herashey,i`m not a ''know it all'' NooooDoji... But,i`m very comfortable with what i`ve got.
Apparently not too comfortable as long as those personalities listed above touch you so much... But I hear you, thanks. Having said these words about reason you probably understand why I share exactly as much as I do and never more.