The false breakout is the exclusive province of how, and where, one draws their trendlines. Now, in this area, surf is correct, drawing trendlines is a skill that is quite subjective in nature. So an FBO to you is just retrace to someone else depending on how they drew their lines.
xspurt, I liked the genetic analogy. Usain Bolt is the fastest man alive because he is 6'5. One reason why I love sports. Lots of things in sports to make you think. So I could train like Bolt, and he would still beat me, like he did his padawan, simply because he is taller. That is genes. The ability to trade at a high level may well be genetic at the end of the day.
You can have rules to drawing trend lines that are not subjective. Or you can use fly by the seat of your pants trend lines. Let Surf demonstrate his TA and we'll see if he knows what he is talking about. Regarding failed break outs? Perhaps - a definite maybe unless you qualify it. If the trend is down in a larger time frame, you not only expect the breakout to fail in the smaller time frame, but the failure is the confirmation that this bigger trend is in control. How can a lesser and greater trend co-exist? How can a correction not fail to continue in a trend? Moreover if your TA has a single keyhole time frame view of the market and you expect to understand everything from that view, then a failed breakout indeed proves to your entire satisfaction that (your) TA doesn't work. However it proves the complete opposite to someone who has a more complete TA. And if you expect every set up to work, then TA, like every other method, is a failure. I suggest you try something else like flipping burgers. That's why I say let the chart do the talking and then we can stop running in circles. A clear example should have 50% getting the Ah-Ha why it works and 50% saying it is clear this is contrived crap. Then we have the proof that it is not a level playing field, and that many are unable to ever figure out how TA works regardless of what is shown.
Did anyone claim TA "works" in a sense of guaranteed profit in every TA based trade? I see absolutely no problem with false breakouts or any other failure of TA setup. Trading is the game of odds, not certain outcomes and that's why it's so simple, but so difficult, because humans have generally poor natural abilities to deal with situations of uncertainty. Trading, except 100% objective algo-like trading is probably much more mental/emotional challenge than technical problem. P. S. Volume in top markets is like 90%+ generated by institutions. Do you really believe their main purpose is to take the money out of retail traders' pockets? P. P. S. Of course patterns themselves are not the cause of actions of top players. Patterns are signs of certain kind of activity by those top players.
Dear TA bashers, what do you think of Victor Sperandeo, the man who showed proved average return annual of 70.71% for 10 years in a row without a losing year (compared to 11.5% annual return of S&P 500 during the same period) and clearly stated that he uses TA to enter/exit trades, evaluate risk etc... ?
+1 Your position size is betting on unknown outcome ,where 80 % of trends fail and historical t/a analysis have little bearing on where the next price driver is going to come from i.e supply/demand/news/announcement . Why should a bank look at t/a ,if it has a must fill order of x billion?It has to fill and it does not care about t/a , but the price of order fill and the bank commission.
How many different threads on the same subject must be debated? TA is a tool, [I personally use it] along with proper risk and money management. If it works for you, great, use it. If it doesn't work for you, great, don't use it. This argument is the equivalent of the glass is half full or half empty. A waste of energy and bandwidth, of course ET may disagree, as it appears to generate a lot of traffic... And this in no means to disparage Xspurt, as his post's are well reasoned, non aggressive and respectful. It's just you can lead a horse to water, but you can't make it drink. So why go through the effort...
It is you. You are the guy who boldly started a thread claiming that DAY TRADING IS A LOSERS GAME and now you are trolling around stating TA is a losers gam! What makes you so sure of yourself when there are clearly many traders proving you wrong every day. That is some big EGO.