Thanks to all for the advice, your patience its appreciated in what im sure is going to an onslaught of TA questions, the latest of which: How many different time frames should I study at once? obviously the most important one would be the one that best suites the time frame Im trading in, but should I be mindful of other ones or just ignore them? e.g. if im trying to catch a daily trend should I know the weekly or monthly trend as well? Or should I just have tunnel vision and study only my applicable time frame?
"fractal" as far as price structures are concerned, means prices are self similar on all timeframes. i.e. the same patterns show up on all timeframes.
you mean equally INeffective. This stuff is mostly used by people who have not yet learned to read price action. After they thrash around with it for a few months to few years, they sometimes understand that TA was a red herring. Bu then, they are often out of money. Think about it - perhaps 95% of new, leveraged traders lose their money. And perhaps 90% of them use TA...
chart patterns were at their most useful back when J.P. Morgan was the fat cat on wall st. not saying the no longer work..... but its just not quite the same. especially how news is instant throughtout the globe nowadays..... back in the day the telephone was as high tech as you would go...... diffrent today. you can do the opposite of what the patterns says.... and you would not loose anymore than if you did it the traditional way............ noways its not quite the same accuracy and followthrough as it was back in the day when the chart pattern reined supreme. patterns used to be the hot n sexy 19 yr old beauty queen.......... now patterns are the feeble wrinkled old lady with boobies sagging down to her knees...... but some still see the bueaty.... its almost like looking at the clouds...... one sees what they want... this has nothing to do with...."but human emotion has not changed..etc, etc
Most people THINK that they KNOW how to draw a trendline, but they don't. That is the FIRST, and biggest mistake of their analysis and that is why they end up with 33 of them! Start out with some T/A basics. Some moving averages, fib-retracements, and measured-moves . . . These 3 alone will do much more for you than "trendlines".
I saw a website where some guy was selling his e-book and there were some pics on his page of the same chart with different trendlines drawn on them. He was like "if you know which one of these two pics has the correct trendlines, then don't buy my book." hehe. I like moving averages a lot. I'm not sure how I feel about fib-retracements (altho it seems like everyone uses them so they may be a self-fulfilling prophecy), and I don't know what "measured moves" are.
Quite often a market will make an upmove (A) with a counter-move retracement down (B), and then another upmove (C). This is called an A-B-C. And quite frequently, one can figure out the price objective of "C" by taking the length of "A" and adding it to the bottom of "B", with "B" usually being some sort of a fib-ratio retracement of "A". The same thing can be done in reverse, for a declining market. When C=A that is called an "equal" measured-move. However, sometimes "C" is simply a fib-ratio of "A", such as .618 or .50, or .382 Nonetheless, such a pattern gives you a pretty neat way of identifying the possible price target of "C". - - - - - - - - - - - - - - - - An example of this A-B-C equal meastured-move can be seen in the SPX from the 1304.42 low registered on June 24th. The "A" wave up topped at 1326 before pulling back to 1314 the following day. Add the 21.5 points from "A" to the "B" pullback low at 1314.54 on June 25th and you get a price objective for "C" of 1336.04 The actual high was 1335.63 on Wednesday before the market then rolled over hard. Thus "A" was 21.5 points and "C" wound-up being 21.09 actual. Hope this is helpful.
ok.... just hear me out...... when i was a kid i collected comic books. when i got older i took an interest in collecting just the hard to come by and rarer titles. i soon realized the as the price of these comics went higher, more and more people took an interest in buying them. as a result, comic companies began to print more and more "first" edition and collector editions... well i dont have to tell you the rest....... as of the late 70's.... no one was throwing away comics..... everyone and their grandmother were hording and storing them for future profits. (prior to that time.... comics were read and thrown away) Ofcourse none of the comics that came out since the late 70's to today are worth shit. the masses have been hip to the value of comics for the last 30 yrs. So, if i have a mint copy of Transformers #1 or Micronauts #1 and i wanna get to dollar for it...... who can i sell it too if everyone else also has it? remember the "Death of Superman" issue when it came out. it made news..... it was accually reported on CNN news!!!! everyone was scooping up multiple copies.... from janitors to grandmothers... it was gonna "put their grandkids through college". now people cant get rid of them..... worthless. CHART PATTERNS: name me one financial institution, investment bank or money manager or hedge fund manager that doesnt understand or recognize chart patterns?? they are the ones that can move the markets..... not the new guy with a 50k account daytrading. thats why i have very little confidence in patterns...... and yes i can read charts and patterns .... (did the courses and workshops... plus 40+ books on the subject) biggest pile of dung