Candlesticks not profitable Massey University Research

[SOCRATES]

Hmmmm, personally I'm surprised at your ability to miss the point of my post.

. . .
. . .
. . .

Actually, that's not true.

I have not missed the point of your post.

But additionally I am making an observation.

I will tell you, if it is any consolation, that you are not alone.

It is the general rule that traders do not understand time and what is more, they are apt not to understand the use of time, which is more grevious.

Now, I will explain to you further, that this is the reason why I am not annoyed at people who have attacked me in the past because I recognise this huge gap (among many others) exists in mainstream awareness akin to colour blindness among the sighted.

 

[A Dashing Blade]

I have not missed the point of your post.

Which you think was? (serious question, just to save confusion going forward as this has the potential to turn into a very interesting digression)

 

[SOCRATES]

Yup . . . time is not a dimension that the markets recognise.

I've never understood why the opening (say) hour when there's often quite a bit happening (and represented by 20x5 minute bars) should be considered equivilant to the lunchtime lull when there's b*gg*r all going on, maybe 1/10th the volume is traded but is also represented by 20x5 minute bars.

But hey . . . . you decide!

Let's go over this again...

You say "time is not a dimension that the markets recognise"

What does this mean, does it mean time and the use of time is meaningless ?

The rest of your post hinges on the use of time that you do not understand otherwise you would not make the statement you did.

At the opening of the market, there is a rush to get everything done.

At lunchtime things habitually quieten down.

The change in the levels of activity are recorded by the chart, bar by bar.

Each bar represents a given period of time.

Therefore the activity is represented vertically in linear time.

The use of time is not obvious unless you properly put your attention on it.

 

[Profitaker]

It's called intra-day volatility Socrates. Nothing new or mystical about that.

 

[A Dashing Blade]

Let's go over this again...

You say "time is not a dimension that the markets recognise"

What does this mean, does it mean time and the use of time is meaningless ?

The rest of your post hinges on the use of time that you do not understand otherwise you would not make the statement you did.

At the opening of the market, there is a rush to get everything done.

At lunchtime things habitually quieten down.

The change in the levels of activity are recorded by the chart, bar by bar.

Each bar represents a given period of time.

Therefore the activity is represented vertically in linear time.

The use of time is not obvious unless you properly put your attention on it.

Excellent post Socrates, thanks for engaging!

I see where you're coming from wrt "activity" demonstrated by volume and consider it a totally valid point. Furthermore, your point regarding differerent timeframes etc leading to different interpretations is one that everyone should go away and confirm for themselves.

Not saying I'm right, not saying I'm wrong but to me, markets are something "natural" (like the sea, like seasons, iyswim) and "nature" does not get up at 07.00 and trade till 18.00.

So . . . to get to specifics, it would seem to me equally valid to construct price/candlestick bars from units of time (say 5 mins) , from units of price movement (say 5 ticks), from units of "number of trades" (say 100) or, and one that (to me anyway) solves the conundrum, of units of volume (say 10000)

Genuinely interested in your thoughts . . .

 

[SOCRATES]

It's called intra-day volatility Socrates. Nothing new or mystical about that.

Now you have decided to talk to me have you ?

That is what you call it, because to you everything is random.

 

[SOCRATES]

Excellent post Socrates, thanks for engaging!

I see where you're coming from wrt "activity" demonstrated by volume and consider it a totally valid point. Furthermore, your point regarding differerent timeframes etc leading to different interpretations is one that everyone should go away and confirm for themselves.

Not saying I'm right, not saying I'm wrong but to me, markets are something "natural" (like the sea, like seasons, iyswim) and "nature" does not get up at 07.00 and trade till 18.00.

So . . . to get to specifics, it would seem to me equally valid to construct price/candlestick bars from units of time (say 5 mins) , from units of price movement (say 5 ticks), from units of "number of trades" (say 100) or, and one that (to me anyway) solves the conundrum, of units of volume (say 10000)

Genuinely interested in your thoughts . . .

Yes, of course, by all means.

Nothing is random.

Everything is planned in advance.

For example, why is it not quiet at the opening of the market and hectic at lunchtime ?

That is one example of activity planned in advance.

And the same way that there is activity in price, there is activity in volume, there is activity in the use of time and ultimately....there is activity in intent.

 

[Crap Buddist]

I notice that time will often set the price(or seems to based on human functioning),but also times when the price sets the time. As in time to act.

If there are less participants at this time which has effected the price valuation then its fair to query its valuation. ? I mean is it a manipulation of price outside of its timeline, is timeline correct term? dont know.

Especially in Forex moving around the Zones.

 

[alexander]

It is the general rule that traders do not understand time and what is more, they are apt not to understand the use of time, which is more grevious.

Well, I don't know if I agree. If time had to do anything with price then when you compress a chart you should get different prices not only in between but also at the end points. But as you compress a chart from let us say daily to weekly data, although the intermediate points change price range, the end points remain the same.

In other words, for any price change P1 to P2 in any interval of time dT you cannot find a time based transformation T(dT) to affect P2-P1. All else is just illusion. Charts are illusions and the view that time plays a role is purely an emotive one.

Alex

 

[SOCRATES]

Well, I don't know if I agree. If time had to do anything with price then when you compress a chart you should get different prices not only in between but also at the end points. But as you compress a chart from let us say daily to weekly data, although the intermediate points change price range, the end points remain the same.

In other words, for any price change P1 to P2 in any interval of time dT you cannot find a time based transformation T(dT) to affect P2-P1. All else is just illusion. Charts are illusions and the view that time plays a role is purely an emotive one.

Alex

OK then.

If that is the case, how would you go about plotting the progression of a price on a chart without including a time element ?

If time is an illusion as you say then the price would be whatever you chose it to be at whatever time you also chose would it not ?

And that...is impossible.

 

[zupcon]

OK then.

If that is the case, how would you go about plotting the progression of a price on a chart without including a time element ?

If time is an illusion as you say then the price would be whatever you chose it to be at whatever time you also chose would it not ?

And that...is impossible.

You could arguably plot price, against anything that makes sense !, such as the price of another instrument, or an interest rate, or the height of the tide in hong kong harbour, or the position of uranus.

The only reason that you plot price against time, either on a linear or non linear scale, is because in this particular instance it makes some sort of sense to do so, it helps to make things a little clearer, and is simpler than retaining information inside your head

My take on this is that he's simply saying that price is not a function of time, in other words, price dosnt go up and down because of some function thats related to time (a simple example of such a function would be a sin wave, where as time elapses it goes up then down then up then down etc)

Im not sure I agree with the comment that charts are an illusion. Theyre simply a representation. Applying some sort of meaning to a candle pattern derived from an arbitarily selected time interval, is perhaps an illusion, simply because you get to select the sampling frequency, and sometimes by random chance, you'll select a frequency that produces patterns that are in phase with market behaviour (just like any other indicator), and in that particular case, you'd be observing nothing other than an illusion

 

[A Dashing Blade]

My take on this is that he's simply saying that price is not a function of time, in other words, price dosnt go up and down because of some function thats related to time

. . . and therefore it's somewhat simplistic to map (ie graph) price against time as this implys (as one deduces future price movements) some form of causal relationship. a relationship which, I submit to the jury, is tenuous at best.

 

[A Dashing Blade]

If that is the case, how would you go about plotting the progression of a price on a chart without including a time element ?

Huh?? This has already been postulated

So . . . to get to specifics, it would seem to me equally valid to construct price/candlestick bars from units of time (say 5 mins) , from units of price movement (say 5 ticks), from units of "number of trades" (say 100) or, and one that (to me anyway) solves the conundrum, of units of volume (say 10000)

If time is an illusion as you say then the price would be whatever you chose it to be at whatever time you also chose would it not ?

Not an illusion, more like "something that humans artificially impose on its (ie a market) movement"

Please keep up at the back there Socrates! (not having a go, not detracting, not attacking, this is simply a concept that I assumed you'd considered)

 

[SOCRATES]

Ah ! ..I see what you are all getting at...like the principle of levers or gearing in engineering... ...but it happens not to be the case of linkage as you percieve it...but because time is abstract but it is also real, and plays a part in price development, and is fluid and not rigid.

 

[alexander]

My take on this is that he's simply saying that price is not a function of time, in other words, price dosnt go up and down because of some function thats related to time (a simple example of such a function would be a sin wave, where as time elapses it goes up then down then up then down etc)

Exactly!

Alex

 

[alexander]

OK then.

If that is the case, how would you go about plotting the progression of a price on a chart without including a time element ?

If time is an illusion as you say then the price would be whatever you chose it to be at whatever time you also chose would it not ?

And that...is impossible.

I do not think I said time is an illusion. I said that charts are illusions and time is an emotive concept. To better qualify that I will say that charts impose illusions due to the wrong and forced association of time and price.

Furthermore, I said that price change P2-P1, is the same regardless how time is conceived and used.

For example, everyone knows that when waiting in a line time seems to pass slowly. When watching an action movie, time seems to pass fast. This is the emotive character of time. Since nobody has found a clock somewhere in space that keeps the time of events on earth, time is subjective, a variable humans use emotively to categorize change.

Question for Socrates and anyone else who likes to answer:

Two stocks to trade: stock XYZ1 will move up 5 points after an hour and stock XYZ2 will move up 10 points after 5 hours. You are allowed to buy only one of those. Which one you choose and why?

Alex

 

[Profitaker]

Clearly I have decided to talk to you Socrates. Perhaps this is one of your better observations ?

For your information I do not believe that everything is random. On the contrary, very few things are random, but much is unpredictable. Since you seem to thrive on “brain teasers” then here’s one for you…..The toss and subsequent landing of a coin is not random, but it is unpredictable. Do you understand the difference ?

I agree that candlesticks do not work, but not for the same reason as you allude to. It is my belief that any system / method / procedure that is in the public domain will not work for the simple reason that it is in the public domain, and therefore known to every participant. It’s akin to placing bets on what time the sun will rise tomorrow – there is no market for this bet because the system / method / procedure for predicting sunrise is well known and publicised. In other words, if the market were predictable, by whatever means, then there wouldn’t be a market. Do you understand thus far Socrates ?

There may well be an accurate method of predicting stock / index / commodity price movements but I doubt it will be found on a chart and I’m certain any such prediction methodology isn’t in the public domain (see above). Judging by your venture into options trading I’m also certain that you personally have no such method – no swipe intended, just pointing out your record on forecasting the markets.

You have introduced the concept of time mid-way during your waffle on this thread, but I cannot fathom how you include it as part of a method of predicting stock prices. You seem to have taken great delight by saying that most traders don’t understand the concept of time, yet failed to articulate the use of time in predicting stock prices.

Can we assume therefore, that this is nothing more than the usual Socrates attempt at convincing everyone of your superior trading ability by way of stale smoke and broken mirrors ?

Rgds,

Wizzard of Odds.

 

[Crap Buddist]

Since nobody has found a clock somewhere in space that keeps the time of events on earth, time is subjective, a variable humans use emotively to categorize change.

I thought that clock in space is the Sun ? I mean thats the measure of earths time events? Thus when the sun rises its Sun At east o'clock . We might have a sun dial and call it 6 Am or whatever.. Also handy for navigation, so the sun provides, well apart from enabling all lifes existence and power etc, not only that, as if that wasn't enough, and I am indeed grateful,etc. but its given us time or a means of measuring lifes events, well 365 sunrises a year etc daily and intra and interday measuring capabilities, and its a handy navigational aid too ?

Has to be one of the best space clocks going and its free.

No wonder the sun god was popular.

 

[zambuck]

Now I am very confused......

Does Sun rise or does earth sink...??...If we speak in Galactical terms.....

What time is it in parallel universe where we have a mirror image of us....

Where is Captain Jean Luc Pickard when we need his input on this matter.......??

Could all knowledgeable please throw light on the matter....No candles please...!!

I thought that clock in space is the Sun ? I mean thats the measure of earths time events? Thus when the sun rises its Sun At east o'clock . We might have a sun dial and call it 6 Am or whatever.. Also handy for navigation, so the sun provides, well apart from enabling all lifes existence and power etc, not only that, as if that wasn't enough, and I am indeed grateful,etc. but its given us time or a means of measuring lifes events, well 365 sunrises a year etc daily and intra and interday measuring capabilities, and its a handy navigational aid too ?

Has to be one of the best space clocks going and its free.

No wonder the sun god was popular.

 

[Crap Buddist]

Edit. "I can predict accurately the movements of the stars and planets, but i can't predict the madness of people."

Issac Newton, said that about the markets. (think it was him) Sore losers statement.
Not the Sun, CP, in your example it's the Earths rotation and orbit around the Sun that gives us that particular type of time.

Yes, agree just me rambling on, and i remember it was not so long ago that the roman catholics declared o.k. the earth goes around the sun.

Maybe newton just ran out of time planetary movements must have an effect on life on earth. What about the term " Lunar Tic " still early days with the research maybe but if humans are mainly h20 then we know gravitational movements of the planets effect water on the earth, humans are water.

Some guys trade via planetary alignments and cycles, maybe they are pioneers or witches of modern existence. Think you burn a green candle for money anyway.

I dunno... Times fictional then? another thread maybe....

Cheers