You and your associates were supposedly going to review it, until Hershey questioned the lack of footnotes citing studies supporting the various assertions in the article, at which point you magically declined further review. Forgive me for being blunt, but the arrogant stupidity underlying that attitude would mean we would not be using penicillin (including its derivatives) or x-rays today. Both were accidental discoveries, devoid of all scientific rigour in the process. An open mind and willingness to examine something before discounting it seems to be an endangered concept nowadays.
Correct, TA patterns constitute past action, but as markets are reflexive, some TA patterns being the past, change the probability of certain price action in the future. As for "which"... well, those I use and those other profitable TA traders use (there are many of them).
Tell me one thing: do you believe random entries can provide consistently profitable trading approach or not?
Think we need a bit of clarification here. When I say I use TA, it means that TA pattern is the only reason for entry. Obviously statistics, position sizing, money management et cetera are also used as you repeated more than once before. You are absolutely right that unlikely just TA would "work" in this sense. If it's what you meant saying most traders use more than just TA then we absolutely agree about this point. P. S. I only mentioned PD's (Price Drivers) to compare with TA entries, because all I know about them is Surf's trades.
I love TA but only for what's its for. It's not for what you use it for, making trading decisions in real time. Rather, it provides a context from which to make a decision instead of a buy/sell. Yes/no decision. Does wise trade work? That's based on TA---- Red light sell, green light buy all from objective TA. You know it doesn't work. So why would any other objective TA work? You want me to think you are special, have secret powers?
Let me get this straight are you saying T/A is almost like a lagging indicator. When we talk about double tops, triple tops , wedges , flags all these types of CLASSIC T/A that people charge money to teach and write books about. I will agree that these classic patterns are always showing on charts but the failed times you can't see because your mind is not looking for the failed double top that turned into a breakout or the failed double top that turned into a triple top. And so on. I do believe however that support and resistance works just fine as long as your reward is greater then your risk. On a five minute chart not so much on a weekly chart or daily chart support and resistance with the correct parameters works great. Stop hunter traders like my self make do fairly well trading broken support or resistance due to orders that are place at these levels. If I operated a hedge fund I would use these patterns as an exit plan. If volume is increasing after a consolidation period and I am happy with my profits I would sell into the liquidity that investors are buying into believing that a breakout is happening. I get out without lowering the price on myself. If I dumped enough capital this would lead to a false break out. I also would have initiated the breakout and waited for biters. I have a set of T/A that I trade as for all I know it may be original or others may trade what I trade as well. As I have mentioned the exit strategy is why they work. I have never seen it published.I am doing fairly well relative to the capital I am trading. Just a naked chart. I don't at the moment have hundreds of thousands of dollars to trade. But none the less I am a profitable trader using T/A solely. I have also posted my results. The last thing I am going to do is post real time as my strategy is my work not free to the public. The problem I have is traders in general have always lacked originality. And your disproving of T/A is only based on classic chart patterns that guru's rip new investors off on a daily basis. So to your credit maybe your article is good constructive criticism for traders who lack originality whom are struggling trying to get rich off patterns that everybody knows about. So yes a lot of these patterns are ambush's . You can't go buy a book like Trading in the Zone and all of a sudden you are a profitable trader. My problem with your philosophy is you personally don't know of all the original strategies that people trade. Therefore disproving T/A would be impossible. Also you seem to act childish and make false accusations. And then sometimes you act reasonable. Maybe if you want some type of credibility you should change the way you act and maybe you might be surprised of the compromise you may receive.
TA is predictive. It allows one to predict the odds of price movement A occurring before price movement B. By combining these odds (win rate) with the ratio between the price movement A and price movement B, one can find technical price action patterns that offer positive expectancy sufficient overcome trading expenses and result in a net profit over each series of N trades. I addressed this in another thread yesterday: http://www.elitetrader.com/vb/showthread.php?s=&postid=3829797#post3829797 FWIW, I think I saw a unicorn on ET recently: http://www.elitetrader.com/vb/showthread.php?s=&postid=3829840#post3829840 His reply --- hourly candlestick price action --- makes it sound suspiciously like he's using charts and candlesticks and the action of price (all of which is illustrative hindsight stuff) to generate a profit that ET's resident Dad, EMG, has deemed impossible with just 2 contracts of ES and no adding to losers.