-------------------------------------------------------------------------------- Quote from marketsurfer: I define it earlier in this thread. surf I'll republish just for you: Thanks, sorry for the delay. 1. A price driver is what actually moves price. It has nothing to do with price itself--price is the effect not the cause-- one needs to know the cause to get an edge. the fixation on past price only is what I believe is the fatal flaw of TA--I am not going to talk about specifics, but price drivers can be news, economic reports, insider buying, large players buying or selling, the book, HFT activity---among proprietary items that I am not going to mention. Most use vendor charts based upon time. these re convenient for noting events in the trend's Pattern. 9 volume status's exit in this sequence. By look at what leads price, a person can operate there BUT is bound to the Present for filling orders. By having the End Effect of a trend in hand (knowing the particular one that will apply) on the collection of information that is accumulating as various types of market orders in the book, you are then free to examine the games played on the book. T&S is not the most active data stream in any market. Besides it is history. the most active part of a market is the big traders doing what they do more than anything else. they actively engage in putting orders in the book and moreso "pulling" prior orders that they placed. Some of their orders are left in place to get filled and sometimes they get their orders changed in type because of the rules of the market they trade. There are a specific number of strategies used on adding and deleting just ahead of the Present. Obviously these are what Larry Harris calls "away" type orders (they are not in the category of BBid and BAsk (the two closest orders that make up the spread)). Away play is where you get the advantage over marketsurfer, etc... You know where the price of the End Effect is ahead of time and you know how overloaded the orders are that could be ahead of you IF you used the wrong type order(s). You position has to be "spliced" in between the the extreme orders that make the turns happen. you annotate the type of End Effect to the right of the present on a ordinary vendor chart. this ordinary chart has blank space to the right of the forming bar. that also is the place where the container of the trend resides for as long as the trend will be continuing. charts do not end at forming bars (called the hard right edge. So another type chart that the public has not seen comes to the rescue. The OTR chart is a history chart and it shows the spread as well. This makes it useful.). But you still need a type of chart not yet made public. 2. Obviously, HFT is not the only way to profit-- but it is the most successful trading method ever created. Anyone can profit from the market-- even astrologers-- google my friend Arch Crawford-- an Astrologer with the #1 ranked newsletter for a number of years---profiting does not mean the process isn't random-- everyone has streaks of wins, regardless of the method-- some even will reach a critical mass during a winning streak then be able, via money management, to keep profiting. The method doesn' matter-- survivorship bias comes into play here-- in other words, we only hear from the winners or liars-- the vast majority lose thus are no longer heard from again as they move on to other pursuits where they may find success. No information here. Arch spends time in Tucson. 3. The HFT I am familiar with does not use "past price data". It uses the book and intermarket relationships for decisions making. 4. Sounds to me that your last point is talking about randomness. The pattern works until it doesn't . You call this "certain conditions" and "certain points of time". You say patterns work, then they don't but sometimes they come back--i call this randomness----- You realize you can only see this in the past? Patterns do not matter after the entry. You are using hindsight bias to defend the TA religion. the Pattern always works. The algorithm behind the Pattern was produced about the time the DOW Theory was announced. A Pattern always exists and, most fun, the Patterns overlap. Optimum profit taking is at the instant of time when the End Effect which was viewed in the future comes into the Present. At that time, FIFO orders are spliced with other orders. If what I am saying resonates with anyone, my suggestion is to find a REAL EDGE or EMBRACE THE FACT THAT YOU ARE DEALING WITH RANDOMNESS and deal with it-- Regardless of the absurdity of TA-- you can and will profit from trading if you approach it the right way.... the tumbling of information is what most see. BUT when degrees of freedom are added to filter the games into separate streams, it is like adding additional screen of drop downs to view. What makes this possible is how strategies work and how strategies overlap. It is also important to be able to steer to what is important as the future comes into the Present. It is also important to magnify (zoom into the place of the action). surf -------------------------------------------------------------------------------- So you are a fundamental guy. No, not true for surf That's cool. Whatver works for you. But to continue on here saying that what you do works and what others doesn't (Ta, price action, pattern recognition) is a joke. this is his necessary prospecting speil Sorry. But I have been a trader professionally since 1992. I know guys who traded certain set ups/patterns back then and did great. They are still trading using the same ideas and doing great today. So you are new to trading. so be it It all comes down to risk mgmt/discipline. You could sit a TA guy next to a "price driver" guy on a trading desk. If neither has a good exit strategy they both will never make it. To say that the fundamental guy/price driver guy has an edge over a TA/pattern recognition guy has no merit.
Way back when in the thread, he admitted that my contention that in using "price drivers" vs. "TA", a trader is basically swapping one kind of uncertainty for another is true. One of the great puzzles of research into anomalies or market inefficiencies is the question "Why aren't they immediately exploited?". No one seems to know the answer.
this may sound too simple BUT why not do a reversal when trends begin to overlap. The answer to not doing this is that the person doesn't know how trends work nor does he know when they begin to overlap.
hello jack, would you mind pointing out an example on the 5 min chart today where trends overlapped? TIA
They are for the most part. The market is constantly changing, making meals of yesterday's killer systems. The anomalies and inefficiencies are constantly evolving and changing. I worked for n option arbitrage firm that had a great edge for awhile. Then it ended. Happens all the time. N
The more satisfactory answer is that the people who do not exploit are simply using the wrong maths and NOT using the correct maths.
Be very glad to. Put up your chart (5 min please) for your instrument(s) I will put up seven circled areas for you on the 8AUG12 chart. If you include a leading indicator of price (volume it will make it more interesting.
Ohh, the plot thickens, will ND confirm or deny, its anybody's guess and is that her real name? And who is this Redneck fellow she keeps mentioning, Momma says never trust a man with one name. Meanwhile, Aunt Martha is lying in a ditch at the edge of town with a broken leg, will they find her in time? Stay tuned for next weeks's exciting episode.