Me neither. All I hear is stories, tales and claims. The worse us the folks who push it the hardest are vendors selling it. Why are TA departments now basically non existent in firms and banks? And if they do exist they are part of marketing? Why dont prop firms who profit from your wins teach TA as a viable method? Why do FX dealers who profit from your losses teach TA aggressively? It's a cult pure and simple.
I know. I've worked as a Market maker on the Amsterdam Options Exchanges, back in 2000. Met quite a few Market Makers, nobody took TA seriously. Then, after the exchange got replaced with computers and the floor disappeared, same thing at the office. I don't know anybody who's trading professionally and uses TA AND is succesful.
There aren't that many traders in the world. Of the thousands of people I met throughout the first four decades of my life, only one was a trader. Consistently profitable traders make up only a small fraction of all traders, because even among the minority who put in the hours defining a profitable edge (or pay for training from a reputable firm/mentor), few can follow through on a solid trading plan to profit from that edge. So the odds of you "seeing" somebody make money trading using TA are miniscule. For about a year, I received a free weekly swing trade recommendation from a company that provides training to traders. The weekly alert came in one day prior to the day the trade was to be triggered (or not), and included a chart showing the technical setup for the trade, as well as the price action trigger (price at which to buy or sell once the opening 5 minutes of market action transpired), a hard stop loss level and two potential profit targets. Of the trades that triggered, 90% of them were profitable. There was no way to fudge or cherry pick any of this, because the trade, and all the levels were called in advance and this was an emailed alert. So I got to "see" someone using TA (no indicators at all, pure price TA) to spot setups with stops and targets, and price action to trigger entries. Anyone actually putting on these trades and holding at least for target 1 made money consistently all year long. I could only doubt the value of trend-following and TA for so long; at some point many months into watching these trades play out and studying the setups/trade management plans, I decided I wanted to trade like that.
Maybe for a hobbyist, but if you are trading on the options floor as Market Maker, like I did, you'll meet quite a few people who make money trading Same thing at the office, I've seen so many people come and go, some of the smartest individuals, who had all kinds of TA bells and whistles in which they believed ... none of them succeeded. The succesful ones didn't use TA. Yeah I know a guy who uses TA, he had even more than 90% winners. However his system would only work in a trading market, not in a trending market. When the market started trending, he lost all his gains and then some.
This begs the basic question-- how do you know a trade will yield a 4 to 1 winner to loser size ratio? Systems with. 30% win ratio often have ratios like that ????? On what basis do you say this? It doesn't seem logical.
Please allow those of us that actual trade to hold a conversation. It's obvious you can't comprehend when information is written in these posts. I don't offer seminars any more and haven't for going on 2 years and have never solicited anyone on these boards through PM or email and you are a liar for insinuating I have.
Why do you think I am referring to you? However, There is a $750 manual for sale on your website, noble prize nominee. What's that alll about?
If you are trading directionally, I would submit that the best way to make money is to understand the topping and bottoming PROCESSES the market goes through on the timeframe of relevance to you and trade according to the logic of those processes. Your trading will always be somewhat contrarian because you'll be looking for topping signals to get short and bottoming signals to get long, but you will also understand that any time you happen to get short or long with an actual top or bottom in place is pure coincidence because you're not actually trying to pick tops or bottoms, you're looking for signs that a top or bottom is coming "soon". I take heat on almost every trade, sometimes for hours. But that's OK because I understand that on the timeframe I'm trading (Hourly swings), that's part of the game. I once had a trade go against me for about 3 days, come within a few pennies of my stop and then reverse for a nice profit. Was it fun? No, but you have to let the process play out, otherwise you're just another guy throwing nickels into the slot machine hoping for a payout. Of course, none of these processes can be condensed into an indicator or pattern because they are logical, not necessarily quantitative, although the logic itself has quantitative elements. Sometimes the market bottoms with the RSI not even halfway to "oversold" or reverses before any MACD crossover is even a gleam a trader's eye. Sometimes the reversals looks like a "bullish pennant" or a "ascending triangle" or a "zigzag" or an "outside bar" or a "hammer". And sometimes it doesn't. No visual or quantitative representation can codify the infinite number of ways these processes can play out, only pure logic can encompass them. Then, even with knowledge of the processes, you are still playing a game of probabilities every time you enter a trade. Only, because the processes are quite consistent, you are on the right side of the probabilities and can be profitable. Think of trading as a manufacturing process with a 40-70% "defect rate", but where the processes' product is so valuable, you can still make money at those percentages. My experience has been that most people (including myself, at an earlier level of development) cannot handle this level of uncertainty for any amount of time and just want to try picking absolute tops and bottoms and fading them using whatever crutch they find easiest to justify their decision-making at the time. Ain't gonna work. If you show me a chart of anything, I can tell you with about 90% certainty what won't happen. I build my plan for what I hope will happen from there and more often than not, something positive results. Which is completely backwards, but that just might be why it works. To be honest, I don't even know if what I do is "TA" and I'm not on this thread to defend "TA" as anyone else practices it because I frankly don't care about other people's trading all that much. My two variables are price (volatility-adjusted) and time and time hardly even shows up in any discussions of TA, where it's all about visuals or indicators. I spend 95% of my time in Excel, not some charting package and when I look at a chart, it's only to find the right numbers to enter into my Excel calculations. I had to build every element of my methodology from scratch, with the exception of 1 thing, which I took from a book that I otherwise thought was interesting, but not something I found consistent enough to be viable.
I agree. My average winners are always larger than my average losses due to the strict rules I have created.
Out of 500 systems with 30% win ratios, the few that survive will have ratios along those lines. The rest will be discarded, as any "unfit" organism would be in this Darwinian world. By default, the survivors will have excellent win-loss ratios. As for how you would "know" in advance that "a trade will yield a 4 to 1 winner to loser size ratio", the question itself is nonsensical. An individual trade is either a winner or a loser and it doesn't have any "ratio" to itself and no one knows the outcome of a trade in advance. The 4 to 1 ratio would be the result of the system's prior trades, simply summing up the winners and losers and dividing by the total number of trades in each category. My winning trades are running about 1.5X the size of my losing trades, yet very few of them, taken individually, are actually 1.5X the size of my losing trades. Some are 2X, some are .75X, some are 1.28765X. You get the picture. Again, this stuff is all so basic.