If you'd read my post in it's entirety you'd see that is not what I said... Anyway, why not add some value to the thread instead of the old cynical one liner that's been done to death?
Tell me then, what "edge" can be derived from looking at a chart? I posited that when looking at trading outright on a single instrument in isolation, given access to no information other than price, any "edge" can only arise from statistical or mathematical analysis. If you consider anything else in formulating your trading ideas, then I believe that you are trading your information and not the instrument itself. Challenge me, engage me - we all know Scose has an open mind and loves to learn. Don't just troll teh Scose :cheesy:
I thought you'd appreciate a good trolling Scose. Ok then, I'll give my opinion for what little it's worth. In order to find an edge that is going to last you first need to understand the tendencies of price movement of a particular instrument (or group of). Obvious and agreed? I don't care whether you're capitalising on statistical properties, fundamentals, technicals, the DOM, the trait that the instument has doesn't matter, but in each case you need a good understanding of the instrument you're dealing with.
So how do you get this understanding? You could do some stats on raw data, which I like, but you really want a hypothesis to test, and where do we get that from? You'd also have to be aware of the many problems with statistical methods for analysing something like a trading instrument. It's very easy to assume various tools in stats might work when they don't really apply. You could design a neural net, and let that try to do the work for you, but again there are many problems with neural nets, and they are still not going to be as good as your brain at doing the job.
So now we're left with studying the instrument with your brain for a long enough period that something emerges...a possible edge. Your brain is going to be the tool. But it's hard to gain an understanding by simply looking at numbers changing incredibly fast. Some might be able to, but I don't think most can, surely not me. You can help your brain by giving some structure, like a chart. A way to understand what is important. From there it can learn. In this there is also a danger. If you start putting too many things on the chart, 17 indicators, market profile overlays etc. then you also start framing your learning experience, your brain will now be finding a solution that works for the indicators, rather than what's most important. So while learning you really want as little, other than price, on the chart as possible. Not because everything else is useless, just because you are placing less constraints on your learning.
Why only price? Well what is the single mos timportant thing that anyone both in a position already or waiting to trade cares about (I think daytrading mentality always underestimates how many people are already in, and what will keep them in or not)? If I got long the Dow and am in profit and still holding, and there is a negative news report but price surges up. Do I care? Do I exit because the news is bad? Do I care about what's going on in the price ladder or that we're 3 standard deviations above the moving average? Now in contrast if price moves below my entry,a nd is moving rapidly, do I care? Now that's just basics. Next you'd be trying a trading strategy from what emerges from your mind. That in itself will give even more education,a nd will frame your learning in a slightly different way and so on.
In my view the only edge that is going to last, is the one that's placed directly in your head, that is continually evolving. In order to develop it, a chart is magnificent. If you dismiss it, I think you're mistaken. And the post I made, saying that when you look at it then no. Well that's correct based on what you said. When you do look at it, you see nothing. You don't see what I see.
As for the topic, the gut feeling interests me a lot. I am many times in a position, and price moves a little against me, not much. And I have no idea what it is, nor can I systemise it, but I just know that price will hit my stop. And that feeling is right every time. But I can't trade on gut, because I can't control or understand it.
I guess supreme confidence might be an edge - mind you Leeson had it
