Does TA work ?

[SOCRATES]

what a load of rubbish.

cant believe you guys actually believe this crap. Tangible, abstract - only to those who don't know what heir looking for.
Soc, didn't you say trading was simple, only we make it difficult.

Riding a motorcycle in traffic is not difficult, is it ?

But first you have to know what a motorcycle is, and what to do with it so as not to kill everybody with it and yourself too.

Trading is very similar.

 

[tommog]

Socrates,

Thanks for the reply, however i dont know if i have understood properly.
The way i understood what you said a chart is a road map, if you didnt know how to read one it looks like a piece of paper with squiggles on and be pretty meaningless and not relate to your journey at all. But if you know what you're looking for it will show you a clear route of where you want to go. Is that what you meant?
If so surely this supports the idea of TA? Because you are building a picture of what is likely to happen from taking these "abstract" shapes and lines on a screen (as the painting was on the wall) to life by emersing yourself in it (going into the painting) and living in it, therefore getting an idea of what will happen next?
So in summary, TA works if you know how to use it properly?

 

[fxmarkets]

excellent post soc re curry house painting, being a curry nut and half joking that I would shamelessly marry an Indian lady for her knowledge of food (maybe next lifetime) the secrets surrounding the preperation of which are almost as guarded as trading know how.

I use charts in trading but they are a fluid historical whats happend, now I notice that i'm drawn to price quotes churning, pulsing, you can chart in your head just with being the numbers, I notice when sitting watching quotes 4/5 pairs that you "feel, sense,know" how the other pairs will respond next, just watching the quotes and having a print of how they have traded at these levels, that and using the chart, being aware of subtle potential trend shifts which I find charts of use but also price and "wheres the pain at"

So I use both, but charts can be potentiallty distracting in a way ,numbing/seperating yourself to living price if you are sucked in and cut yourself off from your own senses of price

Technical analysis, hmmm all thats written promoted on it , using charts can may assist but they can distort maybe or just give a person a portion of the life of a fluid market, certainly less than the whole picture anyway, but I suppose it depends on how each of us develop with charts with price, how can a person be told, be the price ,now whats it/you going to do.

I mean ive not seen any books titled You are the price,where are you going? does this make sense to anyone?

 

[bluetipex]

This is a very good thread, but I'd like to introduce a slightly different direction if I may.

I think we would all agree that the markets are governed by human behaviour, as in essence they consist of people buying and selling. Now human beings are creatures of habit, and therefore to some degree are predictable. I believe that after studying charts of a particular instrument for many months or years you get a "feel" for how it behaves, and you will notice regular patterns that repeat themselves consistently. (I believe that the characteristics of a particular chart differ between instruments, almost like each instrument having a personality).

Now, if you can learn to recognise these patterns, and get a "feel" for the "personality" of that chart, it is reasonable to have the odds in your favour based on the fact that you've seen those pattern hundreds of times before, and with careful money management, you can enter your trade with a stop of course.

Do you think my above assessment reasonable?

Is someone who trades on this basis using TA?

In fact I did read of a legendary trader that studied stock charts for many, many years, and became very successful as a result. If this is the case then it therefore IS possible to LEARN how to trade successfully, which is at odds to those on this thread who suggest that successful traders are BORN but not MADE. You simply have to put in the effort to learn.

(Please give the 95% some hope!!!!!)

 

[TWI]

There seems to be so much discussion of what should be very simple. The chart provides you with an edge on what is otherwise a 50/50 decision to buy or sell. IMHO the important thing to look for is an entry point that allows a relatively low risk stop and an indicated direction which has already demonstrated its validity by taking out historically important sup/res. Now you have an edge on entry, the rest is risk management. All trades are just probabilities which is why it is important to find your edge somewhere. Entry to winning and losing trades is identical, money management is what makes the winners larger than the losers.
Trading is a mechanical process. I do believe, as I have seen evidence with my own eyes that some intraday scalpers are born rather than made but for position traders, I think anybody can learn the rules it just takes discipline, plainly more discipline than most people are capable of.

 

[SOCRATES]

Socrates,

Thanks for the reply, however i dont know if i have understood properly.
The way i understood what you said a chart is a road map, if you didnt know how to read one it looks like a piece of paper with squiggles on and be pretty meaningless and not relate to your journey at all. But if you know what you're looking for it will show you a clear route of where you want to go. Is that what you meant?
If so surely this supports the idea of TA? Because you are building a picture of what is likely to happen from taking these "abstract" shapes and lines on a screen (as the painting was on the wall) to life by emersing yourself in it (going into the painting) and living in it, therefore getting an idea of what will happen next?
So in summary, TA works if you know how to use it properly?

Yes.

 

[SOCRATES]

excellent post soc re curry house painting, being a curry nut and half joking that I would shamelessly marry an Indian lady for her knowledge of food (maybe next lifetime) the secrets surrounding the preperation of which are almost as guarded as trading know how.

I use charts in trading but they are a fluid historical whats happend, now I notice that i'm drawn to price quotes churning, pulsing, you can chart in your head just with being the numbers, I notice when sitting watching quotes 4/5 pairs that you "feel, sense,know" how the other pairs will respond next, just watching the quotes and having a print of how they have traded at these levels, that and using the chart, being aware of subtle potential trend shifts which I find charts of use but also price and "wheres the pain at"

So I use both, but charts can be potentiallty distracting in a way ,numbing/seperating yourself to living price if you are sucked in and cut yourself off from your own senses of price

Technical analysis, hmmm all thats written promoted on it , using charts can may assist but they can distort maybe or just give a person a portion of the life of a fluid market, certainly less than the whole picture anyway, but I suppose it depends on how each of us develop with charts with price, how can a person be told, be the price ,now whats it/you going to do.

I mean ive not seen any books titled You are the price,where are you going? does this make sense to anyone?

Yes, you see the problem for most traders is that when they look at a chart, they are apt to form an opinion. When they form an opinion, for whatever reason, they find it very difficult to separate themselves from the opinion they have formed whether it is the correct one or not, it does not matter. The opinion itself is the poison. This opinion can be very detrimental if it happens to be the wrong one, or, if, unfortuanately the opinion happens to be right, but conditions change that instant, making the opinion suddenly wrong, you understand ? Now the difficulty is that the opinion is pointing in one direction in which the wholehearted commitment is pointed but unfolding developments are pointing in exactly the opposite direction. Now the difficulty is to undo the opinion and deal with the situation as it is, and not as the opinion would wish it to be. This is as a consequence of becoming involved with what is presented in such a way that emotions kick in, messing up everything. For this reason the route I have described contains many dangers. A better route is to immerse oneself inside the decision making cycle of what is developing and why by internalising the thought process in harmony with what is developing instead of externalising the thought process (as a biased observer) with the risks it carries as I describe above. No books will be written about this, ever, as it cannot be described because it is so abstract and personal it can only be arrived at by experience.

 

[SOCRATES]

Yes, but in this there is a similar analogy to music, and the performance of it.

A Stradivarius violin does not make a virtuoso.

A gifted violinist will make a cheap instrument produce marvellous sounds.

Someone who is lazy, tone deaf, clumsy, arthritic, and is not prepared to work at it will never succeed. We all have to start somewhere.

But there are some people who have a natural aptitud

This is a very good thread, but I'd like to introduce a slightly different direction if I may.

I think we would all agree that the markets are governed by human behaviour, as in essence they consist of people buying and selling. Now human beings are creatures of habit, and therefore to some degree are predictable. I believe that after studying charts of a particular instrument for many months or years you get a "feel" for how it behaves, and you will notice regular patterns that repeat themselves consistently. (I believe that the characteristics of a particular chart differ between instruments, almost like each instrument having a personality).

Now, if you can learn to recognise these patterns, and get a "feel" for the "personality" of that chart, it is reasonable to have the odds in your favour based on the fact that you've seen those pattern hundreds of times before, and with careful money management, you can enter your trade with a stop of course.

Do you think my above assessment reasonable?

Is someone who trades on this basis using TA?

In fact I did read of a legendary trader that studied stock charts for many, many years, and became very successful as a result. If this is the case then it therefore IS possible to LEARN how to trade successfully, which is at odds to those on this thread who suggest that successful traders are BORN but not MADE. You simply have to put in the effort to learn.

(Please give the 95% some hope!!!!!)

e and others who do not.

This natural aptitude is the key, that is why I say that traders are born and not made.

This is because anyone can pick up a violin and close his eyes and scrape the bow up and down and make the cat's fur stand on end, but the few who go on to the highest standard are the few, what separates them is not the effort, but the gift of having a natural propensity from the word go.

And that, is the difference.

Now, notwithstanding the previous, yes, by all means, it is possible for someone to make screeching horrible sounds with the bow for years on end and by sheer determination end up by playing, not exactly to concert standard but to an acceptable standard such that the cat's fur will not stand on end any more, even if the playing is mechanical and not creative.

Apologies for messing up the highlighting, I do not know how to rectify it.

 

[SOCRATES]

There seems to be so much discussion of what should be very simple. The chart provides you with an edge on what is otherwise a 50/50 decision to buy or sell. IMHO the important thing to look for is an entry point that allows a relatively low risk stop and an indicated direction which has already demonstrated its validity by taking out historically important sup/res. Now you have an edge on entry, the rest is risk management. All trades are just probabilities which is why it is important to find your edge somewhere. Entry to winning and losing trades is identical, money management is what makes the winners larger than the losers.
Trading is a mechanical process. I do believe, as I have seen evidence with my own eyes that some intraday scalpers are born rather than made but for position traders, I think anybody can learn the rules it just takes discipline, plainly more discipline than most people are capable of.

In the end analysis none of it is madly difficult. But the aspirant has to possess certain qualities. These are natural faculties not everybody has. They are not crucial at a mechanical level, which is what you are discussing, but, beyond what is mechanical, it becomes a very different story altogether, as you intelligently percieve.

 

[bundbaby]

Does TA work : NO
Do I use it: ABSOLUTELY
Does it Help: IT SURE DOES

Contrtadictory answers - at face value possibly, but my point here is this:

TA is a good tool (amongst others) to help formulate ideas and give me some precision to entry points on some of my trrades. However it isnt possible to just say that "TA Works" because that would assume that if you follow its rules, you will have success. It implies there is a magic formula and there is not.

 

[SOCRATES]

Does TA work : NO
Do I use it: ABSOLUTELY
Does it Help: IT SURE DOES

Contrtadictory answers - at face value possibly, but my point here is this:

TA is a good tool (amongst others) to help formulate ideas and give me some precision to entry points on some of my trrades. However it isnt possible to just say that "TA Works" because that would assume that if you follow its rules, you will have success. It implies there is a magic formula and there is not.

Yes, precisely, quite correct. Very good post.