Exactly. There is trend. At each end of a trend is a bend. The bend at the end of the trend could be consolidation or more immediate reversal, after the consolidation it could continue or it could reverse... Working in that framework, the HG would be knowing when the trend was very near the end and there are some mathy / volume and price thingies that can do that but they are only necessary to reduce uncertainty... they won't increase profits by a huge amount over what can be seen on a chart at a glance by any fancy pants...
"Further, Price and Volume are simply end products of the trading process and are not required (actually get in the road) to understand market behavior." What I'm talking about is cause and effect! Price change is the effect not the cause of market movement! TA assumes that one effect can predict a similar effect. Sometimes it does and other times it doesn't which equals an extremely unreliable method!
If "mathy / volume and price thingies" can actually reduce uncertainty, then how would this not translate into substantially higher profits over time? If you could genuinely and meaningfully reduce uncertainty, would that not enable you to better call the turns and therefore, all else being equal, trade larger size? Not that I personally believe in "mathy / volume thingies."
Mandelbrotset Exposed http://www.elitetrader.com/vb/showthread.php?s=&threadid=169607&perpage=6&pagenumber=7
This, here below, is a good, thought-provoking post, and thread. But - I've been thinking about your post for a few days - and I sense there is a problem. It does convey a meaningful message (and I learned something from it, so I thank you), "don't trade all the time, but wait for big opportunities", but it does not say exactly what "high-probability trades" look like. So, your advice is good but incomplete. In a sense, "look for high-probability trades" could be as meaningful as saying "do the right thing, and you will make money", which is as good as saying "pick profitable trades and you will make money". Don't get me wrong - I did get your main point, and that is "you don't have to trade every day" (but you do have to look for opportunities).
You knew no such thing. "going up that fast". How precise! Clearly we've been looking at the wrong things all these years, fellow traders. All we need to do is find a market that's going up "that fast", which of course would mean that there is a "high probability" we can make money, and voila - instant riches! Woohoo! Holy Grail found! Mine - all mine! Gee...why didn't anyone think of this before??? Yeesh. Had your trade turned out the other way, we would have (thankfully) been spared your "wisdom". Ah, if only I had that proverbial dime for every (obnoxious) market participant who thinks he has some keen insight into the markets/trading merely because the coin landed on the correct side for him/her that time or times... well, you know the rest. 1) Not overtrading is sound advice. 2) Most (if not all) common indicators are worthless. If only you had stuck with those two...
"it does not say exactly what "high-probability trades" look like. " If the spread is a nickel with a volume of 22,000 on the ask and the volume of shares available at that price dries up to zero the ask is going up a nickel. If I see that happen twice within a few minutes and all the indexes are going from red to blue at a fast rate, IMO it is highly probable the next time the volume of shares available at the ask drops by 20,000 it is going up again. I think following the price and volume makes more sense than indicators and oscillators in that situation. Fading the gap is a strategy that has historical statistical evidence showing it is a valid strategy. If a company like AAPL has a big gap down at the open on bad news, then starts going up in price even with the bad news out, IMO that is a long trade that has a high probability of going up. IMO when it is announced that a stock is being added to the Nasdaq, there is a high probability the market will view that as favorable and the stock will receive a pop if we are in a rising market. That's as clear as I can make it.
I don't read every word on each post or every post in each thread so maybe I had missed something. From your very first post which started this thread, you said that you had made only 3 trades in the past 6 years. So you trade fewer than once in a full moon, if not once in a blue moon. So I am very puzzled that WHY would you care to read on level 2 AT ALL????? And WHY would you read price action everyday for that matter? Or you watch the market everyday, every minute to size for opportunities but only pull a trade once every two years on average for the "right" trade? I am very puzzled.