the politically incorrect truth why TA can't work (for you)

Discussion in 'Technical Analysis' started by Xspurt, Aug 19, 2012.

  1. We like to think that trading is an equal opportunity event like the 100m sprint: anyone can get their kit and as the slogan says "just do it" but the politically incorrect truth is that by nature you may not be designed to sprint. You might have slow twitch muscles which will never go fast enough and then there is the giant genetic factor that black athletes have a difference physical design. Fast sprinting might be as far out of your reach as a white man appearing in the Olympic 100m final. The fact is Genetics, Cultural and Gender (GCG) issues divide us and impact the way we play, how we conduct business as much as how we perceive the movement on a chart and think about TA. You can look at the hands of two traders and know if one is more likely to be in the winners enclosure and earning 1000% or more than the trader beside him just because the first trader was cut out for the job and the second wasn't. It's Tough Titty if you have CGC issues and you try to make sense of TA so what do you do? You post a zillion times TA can't work but you won't post charts of your failed TA or if you do an explanation as to why you read it wrong shoots at spaceship level over your head.

    Examine the evidence: when traders look at the spinning ballerina, many see her spin clockwise while other see her spin anticlockwise

    Right and left brain viewers don't see the movement or the same connections and outcomes just as musicians can feel the movement of the melody and understand and predict a complex chord progression while to non musician predicting the next movement is a mystery. Try to get the left brain working in a trader with right brain perception and you get the same results as the reviews for this book.For some it is brilliant to some yet worthless to others, just like the conclusions on TA in ET.

    Everyone is totally convinced they are correct and build their analysis and conclusion from what they see. Try explaining the obvious TA reaction and relationships on a chart to someone who is visually hardwired not to be able to make those connections and it becomes a shouting match - it really is not happening as far as they are concerned.

    When they spend months investigating indicators they conclude they are nothing but squiggly lines so they do a 80/20 trigger back test and arrive at the profound conclusion they were right. You could train a monkey to do such a back test.

    Visually they are challenged beyond their ability to ever understand TA.
  2. Consider gender: Women tend to be better traders than men yet there are very few female traders. Why are females better traders? One of the main reasons is their brains are better than most men at multitasking. So if gender gives an advantage, why are there not more females than males in trading? Well it is happening in the air force where more women are becoming top guns but there is another factor. Like a fighter pilot fast traders need to be risk takers and need the balls for the job and the politically incorrect truth is some guys are low in testosterone while some females are high in the stuff. Look at the relationship between your index and first finger and you'll see genetics has predetermined how you are going to respond.

    The ratio between index and ring finger is believed to be linked to exposure to testosterone in the womb. On average, men tend to have longer ring fingers and women longer index fingers. The higher the testosterone, the greater the length of the ring finger and the more "masculine" the resulting child – whether male or female. The longest ring finger is known as the "Casanova pattern".[6]
    In a study of stock traders, Cambridge University researchers found that the most successful had a relatively long ring finger. According to this study, the finger-length ratio was boosted by higher levels of testosterone in the womb during a crucial phase of gestation. Traders with long ring fingers made up to 11 times the earnings of their counterparts, the study found.[7]

    There is a reason why gamers and day traders have been found to be the nearest fit to top gunners in military war games. The very GCG factors that attracted the participants to day trading or gaming are the same that make a perfect candidate for top gun school and if you don't have the favorable CGC factors you won't see what other see and you won't make the connections fast enough to make any sense of it. Try teaching multiple time frame analysis to someone who doesn't have fast eyes and it is like hitting your head against a brick wall. They may have passed the visuals to see the connections but just not be able to multitask. Swing traders often get fried brains looking at fast charts. It's all noise they say, but no one will step up to the plate and declare they can tell the difference between a weekly chart and a 1 min chart if I take the time frame off. When you slow it down it is obvious but if a traders brain is fast enough the movement is clear. IF GCG factors mean your design is not fitted to day trading you will scream your head off that it can't work and it is indeed your own truth.

    Genetically you may be too far behind the curve ball to ever make high level TA reading work. Multiple Time Frame reading will leave you unable to tell what is past and present.
  3. Then there are the cultural issues. There is a reason why white male Jews have always tended to have a disproportionate influence on the worlds wealth. Look at the top brokers, banks, fund managers, the Fed and you'll see a disproportionate influence per capita. Why is this? Because when Jews get together in the synagog it's not just for religion, it's as much for business and networking support. There are other factors that are Torah based and difficult to explain in a few lines but let's call it commitment to each others success.

    Retail trading tends to be isolating so traders venture into an arena like ET for information and support but they are more likely to encounter a dog-eat-dog war zone where those who are most visually, genetically and mentally impaired shout loudest and those who can help sit back because the real politically incorrect truth is, you can't make the blind see, the fearful brave, the slow fast or the one track mind do multitasking. ET is the perfect antithesis of the Synaagog where constant sniping results in an constant averaging down in the thread quality. It takes a blind self destructive leader to allow bigmike to compete against a free ET model by charging for content, yet he is winning by leaps and bounds.

    If you are CGC challanged TA can never work for you. Let me correct that statement to this degree. I showed what to me is a simple and glaringly obvious structural connection in PA to a pit veteran but it made no sense to him. I traded every day with him for two years and suddenly one day he started to trade these connections. It just started to make sense. We both have no explanation why it just clicked when it did. For two years the visual connections were hidden and then the brain suddenly, not progressively, made the connections.
  4. Then here is the structured hard work factor or organized diligence. I referred to BabyPips to offer some simple assistance and also to use an outside reference but this was quickly hammered as a joke site. I doubt you'll ever make money from BabyPips TA but if you don't understand there is a foundation that is textbook perfection that allows the eye to pick up a basic framework upon which real world variation is built upon and that real world is where the 10 - 20,000 hrs structured investigation is built, then forget about making TA work.

    The highest level of TA trading is from the gut - you develop the "feel" ( . To understand how you develop that level of intuition read "Blink".

    Before I mentor someone I give them The Tough Titty Test to see how their eyes work because there may be serious problems that mean I can't help and I have refused to train traders in the past. So here is the politically incorrect truth: you may never make advanced TA work, or even basic TA work because you are behind the curve ball genetically as you can't see the connections or understand the outcomes, culturally you may have no support and after all that you simply lack the balls to get the job done as the psychology screws your head up. By birth CGC put you on the wrong side of the S&R - tough titty!

    For example, I mention the effect of the moon on trading and post a thread to give very basic examples and this stirs up immediate mockery instead of investigating scientifically like this link. ET shows the loudest voices often have the least substance and soon a thread is split between those who are grateful for what they discover and those who are already determined to stay on the " know it all" ignorant fringe.

    Do I think anyone needs to use the moon in trading? Nope :) But I do think you need to investigate, study hard and draw your own conclusions based on what works for you and the politically incorrect truth is you may not have what it takes to ever make good TA work.
  5. Then there is psychology and I'd better let CornixForex cover that that is his profession. It is said many people trade because they are self destructive and want to lose.

    However for me psychology and the level of TA you employ are directly related. If you have tight stops and a high hit rate then emotions are not a big factor. If however you are playing with wide stops and rely on a lower hit rate you can be certain you will enter a long draw down at some point and hitting the mouse will become a huge discipline issue.

    Psychologically you may not have the ability to make your version of TA work. Too much testosterone and you adopt a reckless gun-ho approach. Too little and you are governed by fear.

    I am not considering the effects of under capitalization because any business that is under capitalized suffers the same mind bending issues.

    The politically incorrect bottom line truth is you may not have the CGC gifting necessary to allow you understand TA let alone make it work. You can prove it or disprove it by posting a non working TA chart set up.
  6. TheBlackHand

    TheBlackHand Guest

    Sorry pal, none of this explains the phenomena of a false break out.

    If TA worked, there would never be such a thing as a false break out.

    If TA worked, trading would be easy, and everyone would be rich. The market would not be able to function. Remember TA is easy to learn - which is why so many are drawn to it. It's seen as a short cut.

    We all know why false break outs occur. This means that price isnt driven by the structure of price formations or price action, but that price is driven by money and clever traders (who have more money) fooling TA traders (who have little money - because they use TA).

    It has nothing to do with left/right brained stuff.

    Nice ballerina link though! I can see it spinning both ways at different times - but not by will.
  7. Ah so TA represents an easy way to riches? No 10 - 20,000 hrs study. No difference between high level and idiot level TA. Everyone sees the same thing? We all have the same ability to develop an edge? It's a level playing field - sure!

    Perhaps you're right and the studies are wrong, but a current chart would prove the point. The last and only chart posted did indeed prove the point. A perfect working breakout that exceed its projected target was called a failure by the poster.

    But I understand your misconceptions :)
  8. TheBlackHand

    TheBlackHand Guest

    TA does not provide an edge. If you think it does, then you dont know what an edge really is.
  9. I have not heard anyone saying TA provides and edge. TA provides entries and exits. The edge comes in the middle. Position sizing, primarily is the great edge, IMO.
  10. If this is how you approach discovering what an edge is, you'll never find it.
    #10     Aug 19, 2012