The problem is these recurring patterns do not exist for any relevant length of time. This has been shown via tests time and time again. As soon as a fund locates a repeatable pattern it gets knocked out of existence--- in other words, the patterns are constantly changing. They HAVE TO or the market couldn't exist. This is the fundamental disconnect between market reality and chart watching pattern traders.
My experience has been 100% different then yours. This is ok, because there are many ways to trade the mkts successfully. One size does not fit all.
Bless your success then brother/sister --maybe you a girl?--- some people can just do it, despite the evidence to the contrary. Nice work! I saw a guy, one time, turn 5$ into 900 playing black red roullette. Never would have believed it possible---- surf
Nope, I'm a guy. But thanks, I appreciate your kind words. I know you've been searching for a long time but I'm confident that if you keep an open mind, pay attention to mkt details and work at identifying relationships that you, too, can one day enjoy consistent success. Whether it's through TA or something else altogether (or a hybrid of PD and TA, like you are currently working on), I'm honestly wishing you good luck and success.
The comparison of salaries from jobs with what the market makes available is misplaced. In trading the relevant comparison is what the trader was able to extract versus what the market offered. The former will always be less than the latter. "Significant drawdowns" always matter regardless of the purpose of the account. They indicate that corrections are needed and in some cases a reassessment of the approach by shutting down trading. Maybe "trading for a living" is not the best approach if "consistently profitable" is a core requirement of that. If a person is worried about meeting weekly and monthly bills from trading profits, then perhaps he is not putting himself in the best situation to trade. Your posts are a depository of cliches and conventional wisdom. Our exchange reminds me of a meeting I had with a family friend who requested that I train him how to make "just" $300 to $400 per day trading (it could have been $400 to $500, I can't remember, but it was a modest amount). He wasn't greedy, he said, he just wanted to make enough to support his family. I told him trading didn't work like that and I was incapable of training him to do what he wanted. He cussed me out and blamed me for being selfish. I didn't bother to explain that trading to "just" support his family didn't put him on a different learning path than someone trading to make his family rich. Whenever I read or hear "consistently profitable trader" and "trading for a living" the picture of that encounter pops into my head. I admit it is my own personal issue that I need to deal with.
That sounds deep until you scratch beneath the surface. It is not sufficient to apply statistical analysis because someone has a degree in math, you need a very deep grasp of the subject matter as well. The math qualification may actually be a hindrance if that is what is majored upon. For example, you quote from a paper that shows the TA books are wrong that recommend using a stop loss because some student has "proven" that it impairs results. Dig a bit deeper and we find he is using price crossing a 50SMA - simple as that. With a whole 30second learning curve he's going to tell all the TA's with decades of experience that he is right and they are wrong because he clicked a mouse. Real life is just a bit more complex than that. When price crosses a 50SMA a TA will apply many tests to see if it is noise or a signal and then qualify the strength of that signal, but all of this is outside the comprehension of someone who has not built up years of TA understanding. Educated out of his intelligence is a phrase that comes to mind. So let's apply the same reasoning to your belief that repeatable patterns get knocked out of existence. First of all, patterns represent crowd psychology and there is a finite number of patterns and a very small number of responses to these patterns. The history of market crashes proves one thing - we just don't change. Fear and greed remain with us and the actions of the herd don't get more sophisticated. Smart money leaves a trail and can be identified. I agree that markets change and I look for a change with every new contract period. What worked before often won't next quarter but there is a limited number of changes they can go through and they always betray mass psychology at some point. Try drawing endless market patterns and you will find that very soon you get stuck and your patterns fall into similar groups. Repetition in the market is part of the nature of the market because we are the market. Let's get away from suggestions of perfection and never losing because no one has ever hinted at that. Instead let's look at quantifying the probabilities and getting an edge when certain combinations occur that have have an excellent chance of giving a low risk high reward result. It must work out as planned and if not then the stop takes you out instead of letting hope turn into pain and into panic. Here's the continuation of your YM trade. When I said go short and that this short had the potential to roll through the time fames into weeks or even months, it was because of the psychology behind a very reliable pattern that was setting up. When my last post warned of Friday as being the bear day it was because research shows that this pattern often repeats when certain other conditions are met. Now we have had two large bear days but all of this was warned of from an intraday trade 23 days back. It's not easy to learn because of the problems you mention. In martial arts there are only so many moves an opponent can make but learning to recognize those moves and the counters takes many years of hard practice. There is nothing new or infinite going on in the market: it's just variations of very old things that beats us up until we understand how to turn great complexity into simplicity. Attached is a reminder of the elephant in to room that I warned of as being a key driver for a very bearish outcome. I'm not that lucky, I just work 12+ hrs a day. PS: Wishing you all the best for your channel price drivers. Channel Break Outs were one of the first bank black box methods - it still works amazingly well.
Ok, so I have studied NoDoji's opening bar breakout idea.... For the last 30 trading days in CL... Sept 12 thru Oct 23....... 4 days gave a MFE greater than 20 cents using those rules. (.40, 1.45, .30, .37) 14 days had no trade 12 days gave less than 20 cents MFE before reversing the other way. This doesn't seem like it will work. Anyone else try it?
Thank you for sharing your "personal issue", Icarus. It is always refreshing when one's personal issues perfectly reflect reality. When the opposite becomes true, consistently profitable TA trading claims are the result, at least in this biz. surf
It hasn't worked in years--- at least according extensive back testing I have observed-- there is a disconnect between these TA folks words and reality... i can only imagine the rest of the truth :eek: