If you want to fail as a trader, study TA

[DionysusToast]

That coupled with the fact that DT was maybe a bit too keen to post his earnings and he made reference to learning a "paid-for" system in 6 hours from someone on T2W. So why would this system work when no one else's would?

It is interesting here that no-one ever posts actual results, everyone claims to be profitable and when someone does post results, they MUST have a motive.

6 hours of training was all it took, the information is not in any trading book that I have seen. The thing is - it's not mechanical, which is something most people look for in TA.

You know how it goes. One of the other things mainstream TA literature/websites offers is a 'mechanical' probablistic approach that ABSOLVES the trader of making any decisions. People want a ruleset so when A, B and C line up, they make a trade and let probability do the rest.

The turning point for my swing trading (in fact, all of my trading) was when I let this go. I decided that there was not going to be a mechanical ruleset I could use, that my own disctretion had to play a part and that ultimately I had to take full responsibility for my winners and losers and not mark it down to probability. Of course, we all have losing trades, it is the nature of the game.

TA for newbies is all about taking an easy route to success. It is about bypassing discretion and handing all responsibility to probability. This clearly does not work.

Now - when I had this 6 hours of training, I still had to put in a LOT of time because it's not a ruleset or system. There's a lot of discretion involved. It was not a cookie cutter formula.

It's like driving a car, someone can give you the theory but when you get in the car the first time, it seesms like there's so many things you have to pay attention to. So - after the training came a few months of getting it wrong on a daily basis until I got in the groove and all of the information started to click. It is not a particularly pleasant process but worthwhile if you stick to it.

Now - I am not advising anyone to take the course, I am normally very anti-vendor, I hate scammers in this industry that suck the money from newbies. Most vendors cannot trade. I lost $3000 to a dodgy vendor who couldn't trade. I wasted a lot of time/money on books written by people that couldn't trade. I also wasted a lot of time on these sites not understanding that there was a large community of people talking a good game but not actually trading.

I have one goal here. That is to help people learn from my mistakes.

Take responsibility, understand the market you are trading, understand what forces exist that move the market (and that isn't the MACD), use TA sparingly, and concentrate on developing your discretionary skills.

 

[jon1971]

Because I'd be the only bugger trading them !!!

DT mate, I can tell you're full of it by your confrontational and condescending "know it all" attitude.

So far we've had all RTA is hogwash, anyone who's put in any chart time knows that this isn't the case. eg. are you saying that price never reverses at a fib level? Sorry but what am I going to believe? Some fella on a t'interweb forum or my own eyes?

You've also said, Psychology isn't important, R:R isn't important and risk management isn't important. WTF?

Any more pearls of "non-wisdom"?

PS. I'm still sore that you have quoted me out of context.

 

[jon1971]

It is interesting here that no-one ever posts actual results

It's called not bragging.

No matter what analysis you're using, there is still a margin for error, you cannot "beat the market" on every trade. The whole point of reverting to a mechanical technical approach is to train yourself to think in probabilities, to recognize when your analysis is incorrect and to get out when that's the case. Once you have reached a point of being able to do this efficiently with no emotion. Then you can start making your analysis more subjective (discretionary as you put it).

Where most people slip up is by jumping straight to the subjective stage of analysis without first developing the psychological skills required to trade in that manner.

If you have evolved as a trader to a point where you can exit a losing position, with no internal, emotional conflict, then great I'm happy for you and wish you every success. But realise that not everyone has reached that nirvana of being able to trade efficiently.

Both mechanical and discretionary approaches are perfectly valid, but an approach should be tailored to fit the requirements of the end user, their knowledge & experience level and personality.

Actually what you are preaching could be considered as dangerous concepts for newbies.

 

[new_trader]

It is interesting here that no-one ever posts actual results, everyone claims to be profitable and when someone does post results, they MUST have a motive.

6 hours of training was all it took, the information is not in any trading book that I have seen. The thing is - it's not mechanical, which is something most people look for in TA.

You know how it goes. One of the other things mainstream TA literature/websites offers is a 'mechanical' probablistic approach that ABSOLVES the trader of making any decisions. People want a ruleset so when A, B and C line up, they make a trade and let probability do the rest.

The turning point for my swing trading (in fact, all of my trading) was when I let this go. I decided that there was not going to be a mechanical ruleset I could use, that my own disctretion had to play a part and that ultimately I had to take full responsibility for my winners and losers and not mark it down to probability. Of course, we all have losing trades, it is the nature of the game.
TA for newbies is all about taking an easy route to success. It is about bypassing discretion and handing all responsibility to probability. This clearly does not work.

Now - when I had this 6 hours of training, I still had to put in a LOT of time because it's not a ruleset or system. There's a lot of discretion involved. It was not a cookie cutter formula.

It's like driving a car, someone can give you the theory but when you get in the car the first time, it seesms like there's so many things you have to pay attention to. So - after the training came a few months of getting it wrong on a daily basis until I got in the groove and all of the information started to click. It is not a particularly pleasant process but worthwhile if you stick to it.

Now - I am not advising anyone to take the course, I am normally very anti-vendor, I hate scammers in this industry that suck the money from newbies. Most vendors cannot trade. I lost $3000 to a dodgy vendor who couldn't trade. I wasted a lot of time/money on books written by people that couldn't trade. I also wasted a lot of time on these sites not understanding that there was a large community of people talking a good game but not actually trading.

I have one goal here. That is to help people learn from my mistakes.

Take responsibility, understand the market you are trading, understand what forces exist that move the market (and that isn't the MACD), use TA sparingly, and concentrate on developing your discretionary skills.

Brilliant post. Excellent!

You won't last long here DionysusToast with this attitude, but good luck anyway and good trading to you.

 

[DionysusToast]

R:R isn't important because the market will go wherever it wants to go and once you are in a trade, you need to adjust your expectations as events unfold. The only thing you need to worry about is your downside risk, the upside will take care of itself. Risk:Reward ratio is more forum nonsense spouted by newbies. It does not consider the probability of reaching the reward target or if the reward target is valid, only the Risk part is known.

Psychology isn't important. You don't need a book to tell you not to let your losers run, you just need to experience it a few times. Psychology books are were people look when TA fails them.

Perhaps this will help:

Now, of course RTA is right sometimes, just like a stopped clock. If I were to say that price NEVER reversed at a Fib levels, I would effectively be saying that Fibs had predictive power. If I could guarantee that price never reversed at a fib level, I'd be an RTA trader through and through. Fib levels are amusing - there are so many of them, price is bound to do something near one of them. This doesn't make it useful. Just draw your S&R levels, pivots and fibs on the chart - it's bound to do something around one of them.

OK - let's stick with probably the most widely used and accepted area of RTA - support and resistance. TA isn't black box magic, right ? There must be a reason for it to work.

Can someone explain why Support and Resistance works ? Can someone explain why it would work the same for forex, index futures, commodity futures and stocks ?

Perhaps we can discuss this aspect to blow away a few of the myths about using TA in abscence of other easy to understand and widely available information.

 

[jon1971]

R:R isn't important because the market will go wherever it wants to go and once you are in a trade, you need to adjust your expectations as events unfold. The only thing you need to worry about is your downside risk, the upside will take care of itself. Risk:Reward ratio is more forum nonsense spouted by newbies. It does not consider the probability of reaching the reward target or if the reward target is valid, only the Risk part is known.

Psychology isn't important. You don't need a book to tell you not to let your losers run, you just need to experience it a few times. Psychology books are were people look when TA fails them.

Perhaps this will help:

Now, of course RTA is right sometimes, just like a stopped clock. If I were to say that price NEVER reversed at a Fib levels, I would effectively be saying that Fibs had predictive power. If I could guarantee that price never reversed at a fib level, I'd be an RTA trader through and through. Fib levels are amusing - there are so many of them, price is bound to do something near one of them. This doesn't make it useful. Just draw your S&R levels, pivots and fibs on the chart - it's bound to do something around one of them.

OK - let's stick with probably the most widely used and accepted area of RTA - support and resistance. TA isn't black box magic, right ? There must be a reason for it to work.

Can someone explain why Support and Resistance works ? Can someone explain why it would work the same for forex, index futures, commodity futures and stocks ?

Perhaps we can discuss this aspect to blow away a few of the myths about using TA in abscence of other easy to understand and widely available information.

Actually your prior post was good, My first response this morning was without having seen it.

Look I'm not getting into this argumentative BS with you, I've got a lot on at the moment, like I said I'm live again as of next week, and the whole point of coming on here was an info mission, but what's happened? You've got me bogged down in a whole load of crap about F-ING SEMANTICS.

My approach isn't pure TA, nothing I use you will find in a text-book (but then you never thought to ask, you just ASS-umed).

If you've got something to say, I'm open minded enough to listen (and by the way, you do make a few good points, but it requires a lot of between the lines reading). My main problem is with your attitude, "if you want to catch flies you'd do a lot better using honey than vinegar."

L8RZ

 

[dcraig1]

OK - let's stick with probably the most widely used and accepted area of RTA - support and resistance. TA isn't black box magic, right ? There must be a reason for it to work.

It "works" because traders need a price to hang their hats on. Blind freddie can see major S/R levels (and I'm not talking about fib flim-flam). Which in no way implies that S/R always holds or that knowledge of what the S/R levels are is some guarantee of making money.

If you you cannot see this, you have not looked at enough futures charts (I'm referring to SIFs here). Period.

Some futures markets "love" S/R levels. The DAX comes to mind. On DAX one should always be aware of pivots and market profile levels and VWAP. To not do so is STUPID.

To ignore something that a large number of traders are aware of is pure folly.

 

[jon1971]

Actually as an after thought:

I've allowed myself to get bogged down in semantics, which is perhaps why I'm so annoyed, not at you, at myself...

 

[dcraig1]

Further to my last post is a 10 tick chart (IB "ticks") from the current DAX session. As market falls through several support levels, you can observe some traders buying (they were wrong).

White: VWAP
Green wiggly: developing market profile lower value area
Green horizontal: S1

You can see price hesitate and also the market delta (2nd and third plots from to of chart) momentarily indicate buying at the ask.

You need to be aware of what others traders see.

 

[jon1971]

Further to my last post is a 10 tick chart (IB "ticks") from the current DAX session. As market falls through several support levels, you can observe some traders buying (they were wrong).

White: VWAP
Green wiggly: developing market profile lower value area
Green horizontal: S1

You can see price hesitate and also the market delta (2nd and third plots from to of chart) momentarily indicate buying at the ask.

You need to be aware of what others traders see.

All I can see on that chart is a strong trend that you'd have to be a mug to try and fight. I don't know how many times I can repeat myself, don't take signals in isolation of other evidence!!!

My two cents and I really am out of here now.

 

[dcraig1]

All I can see on that chart is a strong trend that you'd have to be a mug to try and fight. I don't know how many times I can repeat myself, don't take signals in isolation of other evidence!!!

My two cents and I really am out of here now.

Absolutely - but there were some mugs. It's all a matter of the "weight of evidence".

Trends are easy to see after the event, but there are aspects of order flow that would have told you at the time to stay clear of any long position.

 

[jon1971]

Absolutely - but there were some mugs. It's all a matter of the "weight of evidence".

Trends are easy to see after the event, but there aspects of order flow that would have told you at the time to stay clear of any long position.

Oh god, how do you turn off email notifications?

dcraig1, that's why I use TMAP (triple moving average pathway) a technical analysis tool, to identify the existence and strength of a trend and before you all pile in, no I don't use standard MA settings.

Have a great day, cheers,

Jon

 

[dcraig1]

Just to reinforce what I previously posted, look at the subsequent DAX behavior - it snakes along unable to get above resistance at the developing LVA and there is an indication of possible bounce of S2. Are traders watching S2? - you can bet they are.

 

[jon1971]

So there is some potential buying pressure at S2, I wouldn't take a long because I'd be breaking my number one rule of trading against the intermediate trend.

In my humble opinion trying to pick reversals or trading consolidation is amateur-ville. Where do people lose money? at the beginning and at the end of a trend. Where do people make money? In the momentum sweet-spot of a trend (ie. in the middle), from that where would you say is the best place to trade? Of course if you've seen every single pattern a million times and it is all burned deep into your subconscious (like DT) then you can trade every little cycle no problem. But for now I'll stick to what I know has a high probability of success.

 

[DionysusToast]

OK - so far, our first reason that S&R works is because it is a self fulfilling prophecy - have I interpreted this correctly dcraig ?

Do we have any other reasons that S&R may work ?

 

[dcraig1]

So there is some potential buying pressure at S2, I wouldn't take a long because I'd be breaking my number one rule of trading against the intermediate trend.

In my humble opinion trying to pick reversals or trading consolidation is amateur-ville. Where do people lose money? at the beginning and at the end of a trend. Where do people make money? In the momentum sweet-spot of a trend (ie. in the middle), from that where would you say is the best place to trade? Of course if you've seen every single pattern a million times and it is all burned deep into your subconscious (like DT) then you can trade every little cycle no problem. But for now I'll stick to what I know has a high probability of success.

I'm not disagreeing with you or even advocating any particular trading style. Rather just trying to illustrate that DT is talking a whole load of nonsense.

 

[dcraig1]

OK - so far, our first reason that S&R works is because it is a self fulfilling prophecy - have I interpreted this correctly dcraig ?

No - because many traders are observing S/R. It's neither a prophecy nor self fulfilling. It is a factor that influences price behavior.

 

[jon1971]

I'm not disagreeing with you or even advocating any particular trading style. Rather just trying to illustrate that DT is talking a whole load of nonsense.

Hmm, I don't know, he's talked me round somewhat and there is some validity in what he's saying, I just think that some of the things he is saying are inappropriate for newbs to hear, if they view the market from a dysfunctional perspective, ie. if they think that they can predict price movement with any certainty, this is the reason people cut winners and let losers run, because they view their analysis as absolute and not as probabilistic. This has been my only agenda all along.

 

[Splitlink]

The reason for SR working is that there are so many lines drawn, based by so many different opinions that some must be right.

My most successful points so far have been purely numerical distances from some high, or average. But it doesn't matter, really, as long as you have the trend going in the correct direction.

I'm not a great believer, any more, of anything based on horizontal lines because they are often traps for the unwary.

 

[DionysusToast]

No - because many traders are observing S/R. It's neither a prophecy nor self fulfilling. It is a factor that influences price behavior.

So, in effect, you are using something yet have no idea why it works ?

Do you know what percentage of S/R play out the way you expected them to ?