Perhaps my statement is a little too much of a blanket. But for the OP who is likely about to read a bunch of articles about how overbought markets reverse, moving average crossovers foretell of rising or falling prices, bearish engulfing patterns stop am uptrend etc, I figured that I'd be doing a favour by not mincing words.
Follow the free posts of this guy. He uses a lot of TA but in a fresh way, no chart patterns but many novel indicators and makes use of probability. It will cost you no more than your time and you will learn a lot.
=====%%%%%%% Yes it matters; stocks generally speaking,,,,, trend less than copper, silver....... Thats why so many silver shorts blew up /lost money on silver /SLV trends......................................................Not a prediction Trader 50or 51; always keep a 50, or 51, + 2oo period/ 200 +day moving averages, on your candle charts.Its NOT rocket science.. Bulls live ABOVE 200dma;; bears live BELOW 200 dma, thank you alan farley ,+ IBD[Investors Business Daily]. And Jack Schwager TOP Trader books help more than most.Amen
I can't help but wonder how many of the indicator people were able to take advantage of the 40pt drop in the NQ today. I'm sure all of them did.
Hey ahole, many ways to skin the cat, keep an open mind, it does not have to be your way of the highway.
dbphoenix said: TA is not the use of past price and volume to make predictions about future price. TA is the study of price behavior. What the trader does as a result of that study is outside the purview of TA. Whether or not any of this is germane to the thread is up to the OP. I'm not particularly interested in yet another of the many threads that are about mktsrfr. DB, I have a question. While I'm not new to TA, I have a lot to learn and your following quote confuses me, and I'm sure would confuse others: "TA is not the use of past price and volume to make predictions about future price". Maybe I'm misreading, but, what about "measured moves" and should price targets based on supply/demand (TA) be thrown out? Thanks.
Well, posting to an existing thread wasn't what I had in mind, but the OP seems to have moved on, so . . . You registered eight years ago and posted to gmst's thread six years ago that his story was similar to yours. This doesn't tell me much, but it's a start. Technical analysis is the study of price behavior. While anything that relates to price behavior could be called "technical analysis", most of what is called technical analysis is not essential to it or even necessary. One needn't know anything about "patterns" and/or "indicators" in order to observe price behavior and formulate hypotheses regarding why it is moving as it is. Indicators have been around for decades, but technical analysis has been around for centuries. As for prediction, one cannot even begin to predict what price is going to do until he thoroughly understands what it is currently doing. But while it's current behavior is in the market, i.e., the high of the day is the high of the day regardless of what one thinks about it or who sees it, any predictions that are made by the observer/trader are in the mind. This brings into question anything that may originate with raw data but which is interpreted by the mind: measured moves, risk:reward ratios, price targets, patterns (too many to list), bar intervals (1m, 5m, 15m etc), candles, indicators (hundreds of them), and so on. In order to distinguish between what is real, i.e., in the market, and what is gurubabble, one must test these propositions in order to determine whether or not they have any value at all and, if they seem to, whether or not they have enough value to enable the trader to incorporate them profitably, e.g., is the probability of success of whatever it is high enough for me to screw around with it or is it just another half-baked idea that sometimes works and sometimes doesn't but not nearly enough for me to trade real size with it? Once one does this testing, he finds that much of what is commonly-held to be true about TA is wishful thinking. But the essentials of TA, the study of price behavior, the results of demand/supply imbalances, are today what they have been for 10,000 years.
Thanks for your reply. I’m going to have to go back and read my posts. But, as you probably know, I’m a lawyer. I was trained to read, listen and parse words. I’ve done this for far too long and would rather trade. With that in mind, I’m having difficulty understanding your answer, and I would really like to. I can’t find any indication in your response about whether you buy into “measured moves”. I think that you do seem to buy into price targets based on supply and demand.(I’m reading a lot into your post to come to come to this conclusion-so I am not sure this is correct). However, you do not seem to deny that one can predict market movement-at least if one knows what one is doing (and therefore understands what the market is currently doing). Further, I take your response to mean much of what is held to be TA is just not supportable after it is scrutinized on a statistical level-maybe this includes measured moves as well, - your response does not so state one way or the other. I also take your post to mean that price behaviors repeat themselves in the market and one must test the commonly used patterns to determine if they are actually repeating enough times to make money from them. If the directly above sentence is a correct interpretation of what you wrote, when one does this isn’t one predicting moves and actually, at least, the minimum distance of the market’s / pattern’s move so one can be profitable after taking into account all the times the hoped for move does not materialize? Ergo, one is predicting how far the move will be (or at least the minimum amount of the move.) Realistically, you have to predict the move will be at least 1.xx?? times what a failed move would be, right? BTW, I am not trolling you. I’m a believer in TA and currently try and apply it daily. I only have a couple of short patterns that I have found to work for me and am searching for long patterns. The reason that commented and didn’t understand your prediction comment is that I have consistently (in retrospect) covered when in retrospect I should have been able to “predict” the movement would go much further. Thanks in advance for any further insight you share. You and nodoji have really changed my thinking about the analysis portion of the trading plan.
As you are realizing, these folks are leading you on the wrong path. I am also trained as a lawyer ( dropped out of law school) so the double speak, verbal hedging, and psychobabble is very clear to us. There is NO testible edge to using TA or price action to trade. Thats a proven fact. What you are witnessing are the last disciples of the false art struggling to keep their god relevant in the new age of big data. Don't be fooled. surf