If you want to fail as a trader, study TA

Recently, I have been discussing with other traders what the basis of a solid trading plan should contain, and, I am amazed at how few are grasping what I am talking about. Then, to make it even worse, they accuse me of being cryptic and not coming straight out and saying exactly what I am trying to convey.

I now ask you, here in the relevant section, do you think that the outcome for most traders is a result of the TA that is shoved down every aspiring trader's throat, from the very day he/she starts to investigate the big bad workings of the financial world?

The Expert said:

Recently, I have been discussing with other traders what the basis of a solid trading plan should contain, and, I am amazed at how few are grasping what I am talking about. Then, to make it even worse, they accuse me of being cryptic and not coming straight out and saying exactly what I am trying to convey.

I now ask you, here in the relevant section, do you think that the outcome for most traders is a result of the TA that is shoved down every aspiring trader's throat, from the very day he/she starts to investigate the big bad workings of the financial world?

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The biggest obstacle to success, which is what i assume you are talking about?? is expecting to find all the answers here or even on a plate. Trading is difficult and requires determination, a total belief in future success and much self analysis. A plan can be simple as 123, once the other elements are mastered.

TA/fundamentals/flipping coins. It makes no difference. None of it's going to give a significant enough edge. There's something far more important than all of that in order to be successful. The rest of it is just things people make up to glorify what they do.

TE

mmm, well there are several ways to skin a cat. You have your way which seems to exclude TA (although one might argue that a study of various price ranges - on which your trading seems to be based if I've read you right - is a form of TA) and I have mine which is based on TA.

TA, though, is not the be-all and end-all and not some magic trick guaranteed to bring success. If it is, then that magic has escaped me for 30 odd years. All it does for me is flag up which shares I should consider and at what point I might trade them - my main bag is UK equities and I have fared quite nicely, thank you, even if my good lady with her gut-feel buy and hold (almost) strategy has often out-performed me :whistling.

So, each to their own I say.

good trading

jon

Successful trading, like any other successful endeavor, is based on acquiring the necessary experience that will allow you to operate effectively, and efficiently. If, a trader is blinded by such things as TA and Systems, then they should realize that they may never get anywhere near the required experiences. To make it even worse, we have self proclaimed "professional traders" offering to show newbie traders how it all works, for a fee of course. I can relate to what aspiring traders feel, as I was once that solider, and had to go thru the usual rubbish that is made available to all.

So, why am I bothering to share my thoughts. Well, to me it is simple, if I know something to be true, then i feel compelled to state my views so that others might benefit from my experiences. However, if they decide to laugh and joke at what I say, then all they do is validate my thoughts on trading, and this allows me to keep on track and not let any doubts enter my head, which can happen to anyone at any time.

barjon said:

TE

mmm, well there are several ways to skin a cat. You have your way which seems to exclude TA (although one might argue that a study of various price ranges - on which your trading seems to be based if I've read you right - is a form of TA) and I have mine which is based on TA.

TA, though, is not the be-all and end-all and not some magic trick guaranteed to bring success. If it is, then that magic has escaped me for 30 odd years. All it does for me is flag up which shares I should consider and at what point I might trade them - my main bag is UK equities and I have fared quite nicely, thank you, even if my good lady with her gut-feel buy and hold (almost) strategy has often out-performed me :whistling.

So, each to their own I say.

good trading

jon

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Yes jon, you might well be correct in saying that some of my initial screening is TA, but it is not mainstream TA, which my argument is based on. I prefer to call my work Trading Attitude, or the real TA, and it is my attitude towards the different prices that allow me to form an opinion as to what the next best potential trades might be.

So, to clarify, regular TA, the stuff that is shoved down every new trader's throat, is what I am arguing against, and I will challenge any person who would like to validate the regular TA that they use.

The Expert said:

Recently, I have been discussing with other traders what the basis of a solid trading plan should contain, and, I am amazed at how few are grasping what I am talking about. Then, to make it even worse, they accuse me of being cryptic and not coming straight out and saying exactly what I am trying to convey.

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Well, you haven't 'talked about' anything in fairness!
you've managed to spin theother thread 30 pages long or something and you've basically said 'trade US stocks with a big daily range'.
You Initially posted charts without any lables whatsover. They could have literally been representing anything, lol. You eventually gave some hints as to what whey were of and DT stopped your thread from sinking into the depths of T2W by playing the game and discovering they were the ranges of stocks. Hardly nothing we've never seen, lol.
Why on earth didn't you just come out with what they were of straight away? wouldn't have been difficult. You obviously want people hanging on your every word.
You need to start getting to the POINT or calling some live trades or something, because at the moment most people think you are just having a laugh, and I am now starting to lean that way.

Let me expand and see if we can make any sense of RTA. To avoid confusion, I will refer to regular TA as RTA, or the stuff that is pushed down everyone's throats.

The SMA, or simple moving average. Many "experts" say when the price crosses the SMA, it signals a buy/sell signal, within a certain time period. I say this is nothing but hogwash, and the reality is that it means absolutely nothing about price direction. To think that the price will move in a certain way after passing a line, or a few lines drawn on a chart, is nothing short of superstition, much like how people in the dark ages lived and operated.

Price action is determined by a lot more than the price crossing a stupid line on the chart.

temporarilylight said:

Well, you haven't 'talked about' anything in fairness!
you've managed to spin theother thread 30 pages long or something and you've basically said 'trade US stocks with a big daily range'.
You Initially posted charts without any lables whatsover. They could have literally been representing anything, lol. You eventually gave some hints as to what whey were of and DT stopped your thread from sinking into the depths of T2W by playing the game and discovering they were the ranges of stocks. Hardly nothing we've never seen, lol.
Why on earth didn't you just come out with what they were of straight away? wouldn't have been difficult. You obviously want people hanging on your every word.
You need to start getting to the POINT or calling some live trades or something, because at the moment most people think you are just having a laugh, and I am now starting to lean that way.

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Read my first post in this thread, for you are obviously one of them.

For the record, and I am now making it very clear, I do not want a big crowd hanging off my every post. I would very much like to see 1 or 2 aspiring traders ask some serious questions that show they are now on their way to discovering that most of it it just pure rubbish, and that they are willing to work hard to get to where they want to be.

The rest, well they can do what they want, as I am in the business of making money, not friends.

TA is ****, its only use is having a chart as an easy refrence to what the prices have been. i.e where was yesterdays low etc

Of course RTA is nonsense. All markets are made of two components, whether it's the ES or the livestocks industry: a handful of professionals who know what they are doing and a huge number of amateurs (of whom the market needs a fresh supply all the time) who are simply being fleeced. These amateus will use RTA, RFA or whatever other spin they can come up with to justify their sorry existence.

tss42 said:

Of course RTA is nonsense. All markets are made of two components, whether it's the ES or the livestocks industry: a handful of professionals who know what they are doing and a huge number of amateurs (of whom the market needs a fresh supply all the time) who are simply being fleeced. These amateus will use RTA, RFA or whatever other spin they can come up with to justify their sorry existence.

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There is rather more than a 'handful' of professionals in the financial markets. And they are not kept afloat by "fleecing amateurs" - though no doubt some amateurs certainly loose their shirts.

The reality is that the liquidity provided by retail traders is way too small to consistently take the other side of "professional" or institutional trades. "Professional" traders trade a lot more volume with "professional" traders taking the other side of the trade, than with retail traders on the other side.

You only need to look at the volume in program trading, block trades, dark pools etc etc to realize this.

The pro-am paradigm is not really very useful.

By 'professional' I didn't mean institutional. The vast majority of institutional traders/investors are completely cluless.

I meant those people who really know what they are doing, and there are only a vew few in any market.

The Expert said:

Let me expand and see if we can make any sense of RTA. To avoid confusion, I will refer to regular TA as RTA, or the stuff that is pushed down everyone's throats.

The SMA, or simple moving average. Many "experts" say when the price crosses the SMA, it signals a buy/sell signal, within a certain time period. I say this is nothing but hogwash, and the reality is that it means absolutely nothing about price direction. To think that the price will move in a certain way after passing a line, or a few lines drawn on a chart, is nothing short of superstition, much like how people in the dark ages lived and operated.

Price action is determined by a lot more than the price crossing a stupid line on the chart.

Click to expand...

The SMA idea is as you say. So is every other formation or indicator, including the famous resistance, support and Fib lines that people say are wonderful when they turn within 30-40 points away. In fact, every part of the surface of a chart is so covered by by one line, average, or whatever, that someone is always happy about their particular favourite, while the rest of us investigate what the lucky poster is doing right. The problem is that that lucky poster is only right once out of ten times. If he becomes right three times out of ten he becomes a guru and writes a book.

I have my favourite patterns but have no illusions. To me, they are a line, not quite random to me, but they might just as well be for everyone else, which is why there is so much discussion. The art is not to get frozen in the trade, like a rabbit in headlights. Admit that it isn't working, as early as possible, and close it.

tss42 said:

By 'professional' I didn't mean institutional. The vast majority of institutional traders/investors are completely cluless.

I meant those people who really know what they are doing, and there are only a vew few in any market.

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News flash - there are some winners and some losers.

dcraig1 said:

News flash - there are some winners and some losers.

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There are some winners and many more losers. The proportion of losers to winners is phenomenal.

Most consistent losers gamble. All consistent winners do not. Neither do consistent winners continually make hundreds of points profit on each trade, as many seem to do on here. They go for the bread and butter moves.

Ok, we will stop beating about the bush and get straight to some info that traders should know, but, most will never know as they do not have the mental structure to comprehend.

The question that one should ask, is, why is the mental structure not suited to trading?

Mark Douglas has written a lot of rubbish about trading, and, he has also written some very factual info about trading as well, but, the important info is suppressed by the overriding rubbish info.

Writing a book is an art in itself, and in order to sell books you must know what the target audience is looking for. We will jump straight to the point, and ignore all the common things like childhood activities, cultural tendencies, etc, and mention "the need to be right".

Deep down, we all strive to be right, but one man's right is another man's wrong, so the natural outcome if conflict. Trading is conflict personified, and it has the result of bringing out the fundamental differences in human beings.

So, if one want's to sell something to traders, then they must overcome the inherent conflict that exists, enter TA.

TA, with its vast amount of indicators and approaches, is to every trader what candy is to every child, and, we all know how bad candy is for children, especially if they use it every day.

Splitlink said:

There are some winners and many more losers. The proportion of losers to winners is phenomenal.

Most consistent losers gamble. All consistent winners do not. Neither do consistent winners continually make hundreds of points profit on each trade, as many seem to do on here. They go for the bread and butter moves.

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Which of the following is best?

1) Do 4 to 6 trades in 1 day and make $2,000

2) Do 1 trade in 30 to 60 min and make $2,000

tss42 said:

By 'professional' I didn't mean institutional. The vast majority of institutional traders/investors are completely cluless.

I meant those people who really know what they are doing, and there are only a vew few in any market.

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What do they know that makes them different from the rest?