Can a single person wins big while those phd in ibanks are using extreme math and stats which that single person has no idea at all?
I would have to strongly disagree, I would say 90% of my trades are psychology based, I am the trader who sells highs/buy lows whether in scalping or long term commodity trading. If you look at volume on Market profile or even the volume on Minute charts, you can tell where the heaviest of traders are either accumulating or distributing time and time again. In Market Profile the least volume is at the extremes. Now I know the ones who are getting in on wrong side of extremes of the bell curve are those who most of the time do not have a clear cut method otherwise. Do you think the Pros one day just said hey lot's start selling less as market goes higher at some point? Or Buying more near the lows? I have journals I have kept for thirty years of many things including my emotions and wanting to put on trades based on these emotions, over 95% of these trades would have lost. Our brain based on books we read are geared to rising market we should buy, falling market we sell, we feel comfortable to get in when price is moving that direction, our brain is not thinking that each tick going up is expanding our protective stops and decreasing possible profits. You are right that "market is not control by random crowd", BUT traders take advantage at any opportunity to take other side of uneducated and emotional traders' position. Almost every time there is a failure of a price pattern it is based on emotions of the uneducated trader, they can't expand their stops or move to breakeven too fast. I believe big brokerage figured out long ago what emotions small traders get when price does some type of move and force the market to constantly do certain moves. And I am waiting all day long for these patterns to make easy profits. Only NOW I understand much better what and why moves happen.
Base on the stats that I know, most of the market volume like at least 80% or more are created by less than 10 main players or less in the market. Those are like goldman sachs and other main financial power in the world. Assume 20% or actually 10% of random people cannot pay the other 90% win, which means the game is actually about main players fight with each other. I don't see how can psychology be used to predicted those main players' action when they have so many ways to hide their actions. These days they mainly use computers to do all the actions, so there isn't even a human mind there to apply the psychology part.
It sounds like you use price and volume to make prediction, these are stats analysis but not psychology.
âPsychologyâ being a factor in price movement is a rubbish notion that is carried over from the times when classical technical analysis was introduced and was seen as a justification for the patterns. Nowdays that relation has somewhat been reversed with price being moved against common expectations. The only other relevance of âpsychologyâ is in connection to traders crapping in their pants when overextended but it is doubtful this has much impact on price dynamics normally. At the same time price movement is arguably not the consequence of some super advanced mathematics. The math in trading decisions algos is arguably not that complex and it is not the reason why science overachievers are employed. ras72