That's fine from trading standpoint, but what is the cause of those patterns forming in your opinion? They form randomly, then attract people and become non-random or form as non-random action from the start?
IMHO: TA patterns work mainly due to psychology, and self-fulfilling prophecy. However, there may be some exceptions. There are some odd patterns between price, and (obscure) indicators that most people are unaware: http://www.elitetrader.com/et/index.php?threads/trading-patterns-no-indicators.284923/#post-3993302 They may not be explained by mass psychology, or self-fulfilling prophecy. So how do they work ? Just my two cents.
i think the largest banks and the fed are using the market as an advertising campaign to garner bond sales ,sort of an economic or currency /bonds war since 08 prior to that the market like te gdp was/is? fueled by buyers and sellers but ..there are monopolies, and they have deadly information and massive accounts, they see those s/r lines ,those fibs ,chart cycle patterns, and could easily take advantage of the smaller retail crowd in a much larger way, but then they would kill their golden goose before 08,bear stearns would use it's knowledge as one of those 5 or so largest houses to prey on the other largest houses ,whale on whale so to speak, some believe that's why they werent saved. now they are all working together. so i am not saying that it's entirely a sham, just saying that it's not a religion or something you should blindly believe in, one should always try to have as large of a scope on things as they can grasp and never get comfortable with it, always look for ways to expand that as the market evolves global scientists are presently trying to expand their knowledge on climate change, these once in a huindred year rains are happening every couple of years recently back to your original question, i think a lot of times those lines are manufactured, it creates order, like roads, making order out of chaos , easier to make or control money, the economy
So we have at least one interesting theory here: that major TA structures are manufactured artificially in order to keep market within somewhat logical boundaries...
theory is the key word, those that actually know,if THEY exist ,another theory, keep a tight lid on it
Definitely that's not a clear matter to discuss. Nevertheless, very interesting. Having an academic background, I never was satisfied with just "this works" approach. Always need answers WHY it works as well.
cash dow trans and ndx, have some work to do in ndx,trans and dow to get this market to drop,spx is the only one in a clear drop, the others are still above earlier resistance breakout levels a" style="margin: 0px; padding: 0px; overflow: hidden; zoom: 1;"> 2014-09-10-PROPHET.png spx 1994 2009.png File size: 69.7 KB Views: 0 2014-09-10-PROPHET.png spx break.png File size: 75.1 KB Views: 0 2014-09-10-PROPHET.png dow 16770.png File size: 87.6 KB Views: 0 2014-09-10-PROPHET.png trans11.png File size: 64 KB Views: 0 2014-09-10-PROPHET.png trans 8450.png File size: 87.1 KB Views: 0 2014-09-10-PROPHET.png this 2012 line.png File size: 100.7 KB Views: 0 2014-09-10-PROPHET.png today.png File size: 89.1 KB Views: 0
you can see above the structure of ta and how well it works, i think its built to simplify things, maximize profit, and now accepted as the norm, how else would they be able to get all the stock prices of 1000's of companies to rise and fall in unison
Could it be everything is simply so arbed-out nowadays with all those algos exploiting every little discrepancy that it causes synchronous moves?