Reread your post and figure out for yourself that it puts you on both sides of the "tracks". you are the one that is clueless. hahaha!! Long ago i realized that when someone starts a paragraph with................"With all due respect"............they are going to blow some smoke in your shorts. When someone starts a paragraph with........"I beg your pardon dipshit" i always get better results reading what the unpatronizing person is going to say in a rebuttal. Being in the shoes of the BIG players in a game of money will always give you the edge you need.............. There is no such item as an inefficient market...........there is in fact always a "MARKET" your job is to deal with it the best you can. Describe to me how you know when a mkt is efficient or not? You nor anyone else can do that, impossible.
Do keep flipping that coin. <img src="http://i55.tinypic.com/34y5suh.png" border="0" alt="Image and video hosting by TinyPic"></a>
I agree that there are highly predictable patterns that emerge all over the market on a daily basis. However, they work not just because of the pattern. You have to understand why the pattern is forming. If you can get an accurate read on the supply / demand scenario that is forming the pattern, and take in other factors that will effect the trade's ability to reach your target, you can produce a good plan for the trade. The next opportunity a trader has to make a mistake is his/her target. You need to have an idea of what to expect based on your supply / demand analysis. For instance, some guys scalp the afternoons simply because its "late in the day and nothing works." Others are able to read what is actually going on, and get a nice late day move. You have to be able to differentiate between a "setup" that works (briefly) because a bunch of day traders make it work, and a setup that was formed and has a great chance at working because the stock has caught a significant buyer/seller. There is a reason some setups of the same type work, and others don't, and it is not chance. Given, even things that have every reason to work can fail. There is always the chance a baller steps up and takes the other side of the trade. However, this does not automatically mean you reach your max stop loss. I didn't even mention the herd nature of individuals and self fulfilling prophecies. As the trade shows itself, people adjust their positions, or decide to enter. Conversely, I agree there are no static sets of rules to be followed. Each trade is unique, each trading day is unique. You need to adjust to each market.
I notice how some folks here like to post how the market is easy to read and they have a method that has worked for decades, etc. Those same folks couldn't give you a 10 cents winner if you put a gun to their heads. Ignore the posing and posturing. Ps I like the ops post.
Who said the market is easy to read? And what is a "10 cents winner", do you really think one successful trade determines trader's credibility and ability?
Totally agree. This side or the other side doesn't matter, what matters is which one is the bigger side, and choose to join the bigger side. When both sides are equally powerful, you have consolidation, at that moment you better stay on the sideline just watching them fighting, and sooner or later, one side is going to gain more strength than the other, or one side is going to give up, that is when the market is showing you the trend and direction, then you have a conscious choice, unless you are preoccupied with your so called conviction and lose your objectivity. The fundamentals are always the same or similar, what changed are the dynamics, the magnitude, the duration and complexity of the structures of the trending.
Can you provide some example of "best setups" that often fail to produce winning trades? By "often", I'm assuming you mean more than 60% of the time. If it's a winning trade, then we haven't donated to the market. If our timing's off (such as we short in an uptrend, take a loss as the trend continues irrationally, then price later drops far below our entry price), that's not a winning trade, it's a losing trade. We have to strive to be correct in our trading time frame and cast our fishing lines when the fish we want are biting.
I have found that 'equal buying and selling' is the least common cause of consolidation. There are a lot more supply / demand scenarios that cause consolidation, and they either involve the manner in which buying and selling are taking place, OR a particular type of order that is stalling movement.
No coin flip on that chart. The little retail traders running with the herd that day made plenty of money. There was not a single long signal until well after the "flash crash". It was a pure, strong trend day.