Seems like we are making progress here. The book isn't necessarily a price driver. But, it can be. Nothing is happening in the book until an execution. And, the book is full of liars. You don't know who is real until an execution occurs. Try to bear in mind this key item: The only truth in the market is price.
Questions: 1) What exactly is a price driver? A buyer bidding price higher? A seller offering price lower? 2) Is HFT the only way to profit in today`s market? HFT sure have changed the micro structure of today`s electronic markets and squeezed out human scalpers, but the market still offers profitable daily swings on a higher time frame? And what about higher time frames than the intraday time frame? Surely, the impact of HFT diminishes the further you zoom out, save a flash crash once in a blue moon. I don`t understand your argument and my question is really a rhetorical one, but feel free to answer. 3) HFT is only a subset of algorithmic trading. Far from all algorithms trade on an ultra-short time frame and yes, they use price history as input. What else would they use? Your argument against how every pattern would be exploited to extinction is not a new one, but a rather poor one still. You can`t buy a $10 dollar book and find a pattern that works all the time for the rest of history. But yes, there are patterns that can be exploited during certain points of time during certain market conditions. A prior poster mentioned volatility analysis and keeping track of current conditions. Patterns come, patterns disappear and some come back. A good trader adapts. Making a winning system based on technical analysis is not easy, but I certainly believe (know) that it is possible. Money management is obviously key, since it is a matter of gauging probabilities. Sincerely and in anticipation, Laissez Faire
No, the book can be read/manipulated to gain an edge when combined with price drivers. Its how HFT works-- the most succesful trading tactic of all time...
I think I can pretty much agree with this statement. But, it appears that you believe that there is only one way to execute very good trades. This is not correct.
thanks, I knew we were close to agreeing on something. No, there are many ways-- but only a few have a real edge. Just because a trade wins, does not mean it has an edge. Just like a gambler on a winning streak-- he has no edge, but wins and wins again. You can win by looking at charts or price action-- but there is no QUANTIFIABLE edge there. There may even be traders who use TA and intuition to trade that are succesful-- but then again, its not quantifiable therefore not of interest to me. Make sense?
In other words, I like to physically see the "truth" of the market before I place my bet, because I don't know who is telling the "truth" in the book. There's nothing at all wrong with hopping aboard the train for a nice ride, if the conductor (the market) is screaming "all aboard".
If I may brother BSAMâ¦. A succinct definition; It is the tick by tick moves price makes Which Can be read/ deciphered individually, (tick basis)⦠or combined in any combination up through decades â then read/ deciphered In addition, PA also includes; How each tick / tick combination was madeâ¦, and when it was made =============================== T/A = anything found on â and/ or â based off â a chart Just sayin RN
No doubt, but you need to admit that you don;t know when the ride will end, it may end immediately. Whereas, with real edge, you KNOW the odds are in your favor. Now we are back to money management being critical-- random entries with money management even....
This is where experience and understanding probabilities come into play. And once one gets experience and an understanding of probabilities, then he begins to utilize money management and push the odds in his favor.
Ok, but you can't quantify this experience. Its intuitive.... I have nothing against intuitive TA and believe it may work for some traders-- even though I never saw any evidence. What I say does not work is systematic, objective TA without the intuitive addition. The human intuitive brain is truly amazing, I don't doubt its capabilities-- although I know that can't be quantified.