I use indicators profitably on the larger timeframes, though not as buy indicators in and of themselves, but as probability indicators of trade outcome. I've generally seen that the larger the timeframe of study, the more accurate the indicators become (I don't trade intraday). With that being said, one need only look at a daily chart of the Dow to see how inaccurate the common indicators (RSI, MACD, Stoch) can be at times. Notice the trifecta of overbought/sell-signals back in October, some 700 Dow points ago (ouch!) Dow daily The weekly chart offers some saving grace: Dow weekly In fact, a simple yet highly reliable strategy is to buy/short the weekly whenever a MACD cross occurs during/after Full Stochs emerges from overbought/oversold. Trading a weekly chart requires a bit more of an attention span than the average ET'er can bear however.. Chart patterns on the daily are of highest profitably for me, specifically ascending/descending triangle breakouts. Here are 3 recent examples, all of which subsequently crossed the 50-day SMA, further confirming the new trend: Euro breakout Yen breakout RACK breakdown
That's not correct. What you've just stated is the Monte Carlo falacy. The odds the next one will be heads is still 50/50.
Reread my post. I said you have a 70% chance of getting heads over tails everytime the coin is flipped. Think of it as a weighted coin or something. Its a bad example but you should be able to get at what I am saying.
Cashmoney, You said: "IronFist, from now on when I reply to a thread I feel like I'm going to have to warn not just you, but everyone I respond to from now on that because I was not able to turn a net gain last year, that me, responding to this thread is going to somehow ruin your trading career forever...at least thats what many traders on ET would like to think. " That suggested to me that you misunderstood Cocaine's advice to you which didn't say the above ... it was more in the line of: 1. Your advice isn't reliable because you don't truly know if it works; and, 2. Giving it may seriously harm your ability to grow as a trader. And you do give it out with both enthusiasm and a no indication of what a small base of valid experience it might be built on. A better disclaimer might be: "Because I, cm69, am yet to turn a consistent profit elements of my advice may be supported by quicksand. They are given enthusiastically and with good intent but may be harmful to yours or my financial health" Great to hear about your development. The only problem regarding your forgetting the advice you give (well, one of them) is that you might forget it but your subconscious might have become a bit more committed to it because you gave it. Lets not forget the person who listened to it and doesn't know you've since forgotten it. God, this is starting to sound like a soap opera.
OK cm, you also asked for "errors." My point in the last post was to try to get across what I felt CC was trying to help you to see but lets try anyway. This is going to be horribly pedantic and I wouldn't bother doing it but you asked so I'll try. No, I deleted my list. The point isn't the actual errors. The point is the same one that generated my response to you in the prior thread and Cocaines much more generous attempt to help you see the risks in the advice you gave. Lescor said in response to a problem with picking tops and bottoms: "You are not trading to make money. You are trading to be right. You are trying to satisfy some urge to be correct." You, with your enormous experience and proven track record, contradicted him. And the problem with your contradictions was: "You keep proving my point CM69, once again quoting the ego part instead of admitting what should be easy. Look, I think that you will be profitable at some point. But until then, the advice you give out may not be sound, considering it hasnt worked for you yet. Wait until you have sustained success and then be a nice guy and offer advice. Think of it this way, the more you repeat things that may not be true (trading advice), the more you may believe something that isnt valid. This leads to bad habits and repeated mistakes and these things get ingrained in your routine. If they are wrong to begin w/, you will have a hardtime breaking them."
I understand his point but it is not valid in this scenario. Every flip is independent, 70% chance of getting heads everytime its flipped. How could it ever be a 50/50 chance of getting tails?
What's happening is that the points are getting mixed up. Because IronFist went back to a 50/50 coin apex thought he missunderstood one element of what he was talking about which was a 70/30 coin. But the real issue as you say is the monte carlo fallacy which applies to truly random events without sequential effects. In this case apex's statement: "After a drawdown is the best time to trade because you have the odds in your favour." is wrong because the odds never change. They are 70/30 before, during and after a drawdown. Thats absolutely true of a coin whether weighted or not. BUT Consider that a trading system operating in the markets is not a series of truly random events. Great and learned debates have been had about this on other boards and I'm going to contribute little to that .... but ... ... most trading systems go into drawdown because the market moves into a phase thats at odds with the system (ie it chops up and ur trading a trend following system) ... ... but the market keeps going from one phase to another and although we can't predict when a choppy phase will end we can predict that the longer it has continued the more likely that it is about to end (note I said more likely, not now or not specifically when, nor absolutely definitely that it will) so starting to enter a system when it is in a drawdown (or not when its at peak equity) can be very wise advice because the interactions of systems and markets are not simple monte-carlo fallacy style random events. One should be sure that the drawdown is caused by changes of a cyclic nature not a change like the decimalization of markets or the finish of a stunning bull market before one applies such a rule though.