Hmmm.. you are aware that many of the old pic-links have been broken..? Please PM me; I just want to check if my "Obvious" is in the right direction. That's all; I won't bother you further if it isn't.
I saved some of the old pics, years ago. They weren't helpful, and some even had crazy lines drawn all over them to mock TA gurus. Here is one of my favorites. *edit - this entire thread is an intelligence test, and so is life in general. Yes, "the obvious" exists and it is pretty well implied in the first 30 pages of this thread, but no I'm not going to tell you what it is. You need to pay the price of entry. Think about it.........
That's a well known pic for the fans... It was orginally posted sideways; several guys I spoke over the years, spent considerable time on this. I guess it really has to do with intelligence, not with perseverance... Back to the microscope and scalpel to dissect this again with your cryptic post...
So, you did not yet make any money from what you call The Obvious? The FED officials do own stocks, though. So they have for sure been making money and lining their own pockets.
Two questions for fellow plebs or anyone who wants to answer. 1) Have you thought about WHAT or IF there is anything that separates a High-risk entry from a Low-Risk entry? Whatever that means to you. Is this simply a matter of RR or does it mean something else? 2) Do different markets serve different purposes, and therefore OPERATE or FUNCTION differently than other markets?
Well, I do think win rate should be considered, too. If you arbitrarily decide to use a 5 point stop - it should be evident that where you enter matters, too. If you do not enter at the right place at the right time - you'll constantly get stopped out. It's no use with tight stops (low perceived risk) if you're constantly stopped out. So, to me, a low risk entry is an entry at a time and place which lets me enter with a fairly low risk (not much if any counter-movement on entry) and have a fairly high probability of exiting with a profit without getting stopped out, i.e., buy when price is going higher and sell when price is going lower. Hershey may best have described it when he talked about being on the right side of the market. Conversely, a high risk entry is one which have a high probability of getting stopped out, i.e., random entry or buying when price is going lower and selling when price goes higher. Arguably, though, if your bet size is really small and you have deep pockets, you can use wider stops and still do pretty well assuming some knowledge. You may end up taking a really big loss one day, though, and it doesn't scale well. Not something I'd be interested in. I'd rather just park my money in an index fund, then. You can do well with a lower win rate, too, assuming you're trading in a market which have really strong trends. But it can be psychologically hard to endure multiple small losses waiting for the 'big one' to make you whole. Of course. They do serve different purposes and facilitate different types of players. The purpose of futures markets are hedging. You can sell (go short) as easily as going long. The purpose of the stock market is to raise capital for firms. The secondary market ensures that the primary market works by allowing people to trade stocks. And so on with other markets... (currencies, bonds, etc.) The common denominator with all financial markets is that they seem to attract a lot of speculators who trade simply for the purpose of making a profit. As most speculators seems to lose they kindly assist the markets by providing liquidity. Technicalities from different markets aside - I basically consider all markets as order-matching engines. Basically, what's happening all day long are orders matching with each other for various reasons and motivations and across different time horizons. Lack of liquidity and/or urgency moves the market higher or lower, i.e., market orders "eating up" limit orders. Since futures markets are subject to hedging activity I suppose one could theorize or argue that this puts pressure on these markets from both sides. This may be different with single stocks as it's generally harder to short and players may have less interest in doing so for various reasons. The ES which seems to be the market most discussed here is a very thick market which attracts a lot of different players and is arbitraged against multiple markets. There's also the obvious impact of the options market which is huge for the S&P 500. At least this is how I understand it. All this blabber seems to relate to the why, though. And while interesting, I'm not sure if it's in any way helpful. What seems evident to me is that markets generally trade and move technically. So, in order to profit, learn how markets generally move and trade accordingly. Just as important is knowing when not to trade. But what do I know...
As per the last question... lemme put it this way. Do you think the different types of traders manifest differently on the chart? I.e., one example might be how currencies may be a bit more oscillatory, with MAJOR changes in price only occurring on EXTREME economic changes(GBP in 2008).... vs an index, that is more of a store of value, with retirement funds, company values, and generally trends up, unless of EXTREME economic changes. This example I think as the EZ to pick out example of how different trading activity may manifest. But I wonder if there are others?
I haven't seen you in ES thread @Laissez Faire. Happy you're still here and you're ok! Happy New Year to you!
Stats. Stats on a well-defined setup taken across a sufficient number of occurances can provide a reasonable probability of success when traded with discipline. For an intraday trader a tested setup and trigger is generally a lower-risk trade than a trade taken at a random time.
Now that you bring it up, there was about a six month period where I did use "the obvious", in a primitive way, because the stock behavior of the ones I was trading made it "obvious" what to do. That was one of the most profitable periods I've ever had. What happened? Went back to work, gave up full time trading and abandoned the idea. I truly have a problem with all this. It's like I don't want vast piles and piles of money in exchange for working the buttons on my trade console. I may believe, deep inside, that it is immoral.