Is quantitative analysis of past data the only way to get a reliable edge in the market? or can a trader study live price action for long enough to be able to develop a sense for what will happen next?
Not extremely difficult to find theoretical edge. The problem lies in execution. This is where most models fall flat on their face in real time.
I think Paul Tudor Jones' highly publicized move to fire a bunch of people and hire quants marked a short term top for the quant world. In macro trading right now, there has never been a better time to do the type of hard fundamental thinking as outlined in "The Alchemy of Finance" which ironically Paul wrote the forward to...
If your not a Quant you are heading the way of the dinosaur , that seems pretty clear to me . Nothing beats evidence , decent quants have that . Subjective discretionary shit has no future in todays world ... Astrologize that :roflmao:
The only kind of edge you have is the management of the trade. Trading live price action with chart/indicator combo is sufficient for learning entries and exits.
TBH i think quantified price action is the ultimate algo although a difficult task that some suggest is near impossible ( i am not one ) , Data mining is the result of many quants and although this can result in positive forward testing its not a high expectancy model imo . Positive in sample to out of sample to forward tested is a difficult road . Like retail trading the success rate of quants will be a similar %age imo . Quants that know priceaction and can trade it loosely systematic have a huge advantage over pure progammers imo . Its going to be hard work whatever way you go and i doubt much more than 5% will go the whole way . Any goose can learn tech analysis but successful quants are restricted by cognitive ability so that dilutes the pool immensely from the getgo ...
Even if you found a price action/scalping edge through visual analysis, the speed of price movement in modern markets won't allow you capture it. It must be coded to execute if you plan to seriously daytrade. Longer term PA/TA may still be viable, but exposure risk increases exponentially. I'd still use quant tools, even with longer term outlooks. I just find it much easier to place blame on objectivity vs. subjectivity if things don't ever work out.
I assume you still drive a carbureted vehicle too. Can't manage something that's not executed properly to begin with, unless you like polishing turds.