+1 .... and isn't that precisely what trading is ... dealing with other people? Or even worse, could it be, that one trades against one's self, one's beliefs, one's perceptions and that there is no objective out there, out there.
While I agree with your comments somewhat, it seems that many system traders will attempt to force their "the market has rules" beliefs on others. I suspect so that they will feel safe and in control. In fact, many newbies will tell you something like .... the market has to go down because there was a death cross .... I use principles and not rules - more akin to fuzzy logic vs the market shall go up when the sma is crossed type "commandments." Why do systems use stops, if they have predictive value? There are edges that don't rely on charts yet have predictable outcomes. Trends in markets shouldn't exist IMO, and yet they do. Great wisdom comes in trading when we realize that we don't have ( or need) control over markets. Further, one of the side effects IMO of the HFT stuff is that system traders were largely wiped out and the discretionary traders increased. Computers can replicate every system and defeat it since they know what the system trader will do. Many system traders actually have discretionary rules in them but they are often disguised - for example ..... and must have a good chart pattern ....
Here is a book, " Trading From Your Gut" by Curtis Faith former Turtle... http://www.amazon.com/s/ref=nb_sb_n...eywords=trading from your gut by Curtis Faith
Yup eta..., which is why I hold that we must make our internal trading self - mirror - as close as is humanly possible - the reality of the mkt..., price movement..., & trading Otherwise..., the mkt & price is only.., and always - out to get me :eek: RN
All of this post is 100% true. Until Siuya posted, all the posters were making this mistake (and probably will not take Siuya's direction). By using the maths term "degrees of freedom" the solution to the system of the market's operation (STEM based) involves three stages of dealing with degrees of freedom. Stage I receiving and organizing the raw data degrees of freedom. Six are invloved. Stage II Increasing the degrees of freedom to "process" information through a logic system. about 70 degrees of freedom are invloved. Stage III funnelling the 70 degrees of freedom back down to the bare bones comprehensive "certainty decision tree". The "gut" thing is a system outside of the STEM since it is a "betting system". betting is done with an emotion based statisticalating. The center pice is HOPE attended by "predicting" in a context called variously "noise", chaos, and/or "randomenss". A sort of "fools paradise". A. Lo of MIT went through a highly descrabed process into the dungeon of "financial engineering". you can watch him over the years as he "proves" the patterns he sees do not work in any significant manner. glance at the "head and shoulders". Look at the pertibations applied to prove it is not statistically significant. But what if you use STEM and see it as two consecutive type C trends (the one of the four types that is complete and is not in drift type D) Suiya suggests the test is made to see if a trend continues, rather than the CW test to determine a trend ended. Why do not A Lo nor the MBA's know as yet tht there are four distinct types of trends? The above quoted post is the reason. by using so few egrees of freedom the ype of trends are never differentiated. Type A incomplete one leg type B incomplete two legs type C complete three legs (which is how "The Pattern" is fabricated as the CORE trsding CYCLE) type D multiples of odd legs greater than three. A complete trend type called DRIFT". Once a person climbs to a vantage point to be able to see (determine and define using STEM) the sequencing of types of trends, he steps into a new world that is totally different than the world where types of trends are not differentiated. so now glance at a headand shouldersas two thre leg complete trends where the sentiment reversal is the moment right between the two complete trends. Now look at the sequence of turn types in the HS. at the junction of each leg there is a turn. The turn types in the HS are a, to b to c to a to b to c. In terms of "degrees of freedom" this post has introduced the four types of trns the three types of turns and subjuctively, the fact that the sts of like kind items on the sytem of operation of markets always follow Orders Of Events, where b an event is simply a uniquely defined item in terms of STEM.
Nothing constructive and applicable to real trading. Just long-winded legthy tirades without concrete conclusions. I woud recommend reading books of J. Murphy's instead (of course if you're comitted to technical trading)