Two questions: (1) What understanding of price action does one gain from a non-mechanical approach and how? (2) Would this understanding not aid an individual in developing a mechanical approach to trading? p.s. I concur with your conclusion wholeheartedly that a mechanical approach will, at the very least, tend not to yield any understanding of market movements.
As to your first question, that's what a study of the books I suggested and the literature in Behavioral Finance will tell you. I can't reduce all that to a message board post, but someone else is welcome to try. As to your second question, it might, but I don't see the relevance. A mechanical trader doesn't care about "why". In fact, it is this self-questioning that prevents mechanical traders from following their systems. You seem to be asking whether a discretionary or mechanical approach will yield the greater results. There's no way to answer this. Your task is to decide to which approach you are more psychologically suited. If you are in constant battle with whatever approach you take, you will fail. --Db
Thankyou DB for your assistance, I'll be leaving Elite Trader shortly to begin my self-matriculation.
Finance is attarded ! In Statistical Quality Control the question would be the inverse !!!!!!!! RANDOMNESS is a VERY DIFFICULT STATE TO ACHIEVE hihi ! Take any SPC software and it will cry with so many alerts of non randomness that it seems a farce when you hear that kind of question in Finance ! As Deming, the statistician and Quality Guru said, it will take 50 years before the philosophy and not just the calculation of variation is largely understood in every field. P.S.: I'm back but not for long, but I posted this so as to be sure that you're not missing me hihi !
I think you did really well at the topic you initiated. I'm looking for some completed logs that might appeal to you as a completed short version of this stuff. I have the master but completed ones are very interesting because of the dynamic. The strategic ploy for obsreved reaction hasn't been mentioned: it's anticipation based on empirical probablitity. You made a neat progression with these guys as the bounding influence..
Here is the hot list sheet for buying that day. VRTS was peaking (see prior days) so it was not a buy. TLC, NSIT LGTO and SCAI opened up but only NSIT made a volume past DU and it was after morning trading so it was not strong enough. Nailing MFAC around 20 plus as volume rose before price moved is SOP. It's first day was about a 5% move.