Sorry buts that incorrect. If you go play blackjack the single most important element that will determine your results is whether you have an edge or not(counting cards correctly), all the money management, discipline, stress management in the world cant make you a winner if you cant count cards. That same is true in trading, you can be the budha of taking signals if you are not trading something with an edge you will go broke, it doesnt matter that you love your wife or that you never get angry I did not read that thread you posted because its too huge. I want to get straight to the point, post the link of the page where someone tested your magical japanese junk, show us how many years worth of data is that based on, what is the likelyhood the results were just random noise, profit factors, etc You might want to read chap 3 of Practical Speculation, where Steve Nison japanese junk was tested and "Of 15 patterns, 4 came up with results in the direction of traditional candlestick interpretations. None of the patterns was statistically significant at the usual 1-in-20 levels typically used by researchers as the minimum cutoff for determining whether the phenomenon was consistent with mere chance variations. Our tests thus failed to verify the validity of Japanese candlestick analysis." But of course you will say one needs discretion trading patterns, funny how it always comes down to something that can't be tested. And those 'discretion guys' who are succesful(or at least are CLAIMING they are) are in the 5% category of traders who make it, so they could easily be just lucky or liars
well no shit man. If candles by themselves were great signals, everyone would be rich. Candles are just another indicator among the likes of MA's, stoch's, Bolingers, etc. They are all useful in their own way, but alone they are worthless. Hence why that test in that book failed.
How come the thing that makes those 'worthless' indicators to be worth something usually can't be tested?This allows that discretionary gurus keep their fame and glory and say 'if you cant make money its because you are not doing it right', meanwhile they refuse to give us specific rules that can be easily tested. Yet they will lecture us on how anyone can do it if they just follow their intructions. Its like they are afraid of something
The ET hero anekdoten was quoted saying many times that rising stock prices are likely to be followed by rising stock prices, that is incorrect almost beyond the shadow of the doubt. Daily changes in the S&P futures are negative correlated to next day changes, matter of fact the author of the paper 'Does trendfollowing work in stocks' himself has said he found 'When restricted to the S&P 500 we found an inverse relationship between the tendency to have substantial and prolonged % moves and market capitalization' Yet the guru will say that and everybody will believe, meanwhile the guy who tested the data is scratching his head
Seems to me like you already have your mind made up, so why are you worried about the success of discretionary traders and the ability to backtest their setups ? I am assuming you are not a discretionary trader. Are you a fulltime, profitable trader ?
I'm not worried about their success. I'm afraid a ton of them are either full of it or are lucky. ET poster IronFist did a few tests on the 'Daytrading 2.0' thread guy and found his system was not profitable, anekdoten doesnt understand the basic fundamentals of the market he trades yet claims to have had 7 losing days scalping the ES in 2007 I'm seeing a number of studies showing many TA patterns does not work yet you post here and people get all defensive and claim 'you are not trading it right', this is a recipe for getting fooled by randomness through selective reporting of people 'suceeding' using the pattern or selective reporting of 'ways' the pattern work
Daal better watch out continued rational thinking like that leads to questioning the whole rational behind active investing.
Hi Daal, First of all, we actually share the same views on a few things you've said. Here's what we share... Agree but to be a consistent winner in card games you need more than just having the ability to count cards. Agree. However, you seem to continue ignoring this one important aspect about my own trading...my trade method has an edge but it's not my most important edge. Simply, my trading plan (all the pieces in the puzzle working together which includes my trade signals) is much more important than my trade method alone. Hopefully you understand that very simple paragraph above but I'm not going to bet on it that you do. Agree. In fact, I've discussed at least a dozen times about Steve Nison candlestick patterns not being reliable here at EliteTrader.com in the past years. In fact, if I'm not mistaken, you participated in one of those thread discussions several years ago. However, I don't use Steve Nison candlestick patterns. Instead, I use my own custom designed candlestick patterns. Please refraim from making any assumptions or predictions about what I will say or do...not cool and for you to do that makes you look like a troll. Further, you requested access to one particular trade pattern I use and now you say the following... Ok...so you don't want to test the objective rules outlined in that thread. Why? What are you afraid of finding out. Now your asking a completely different question that had nothing to do with your original request. Get off your lazy butt and do the test yourself...you don't need to see my own personal test results especially with your obvious bias. Thus, read the thread then take the objective rules and test it on any of the trading instuments I discussed in that thread (not stocks) you troll because I'm not going to hand anything to you on a silver platter with your inability to be objective. In fact, I'm a strong believer that the worst quants, backtesters and traders are the ones that don't know how to be objective. Summary...we actually do agree on a few things as noted above but you won't know it because you don't take the time to read my posts. As a reminder, my trade strategies have an edge but they are not the sole reason why I'm profitable. I'm profitable because my trading plan has an edge and if you've played any team sports you may understand what I'm about to say... Pretend you're a good quarterback (a.k.a. trade method)...you still may lose all your football games if your teammates (money management, discipline, proper capitalization, stress management, proper trading platform, proper trading environment et cetera) suck or don't do their job (a.k.a. trading plan). However, like I said, our opinion differ about that critical concept because you seem to think a good quarterback will overcome (compensate) to win football games when everybody else on the offense or defense doesn't do their job. P.S. My data vendor (Qcharts and FutureSource of Esignal) is currently down but that shouldn't be important accordingly to you because a trade method with and edge will compensate for the fact that I currently don't have a proper trading platform at the moment... Ahh...whatever. Mark
Dude, its 27 pages long and thats on 30 post per page display. I have a life, its a simple pattern, just post the code or TS results in the last 10 years. It cant be that hard