Is it true, you can trade without indicators and candlesticks?

[Goldmansucks]

For short term trading, the easiest way to explain it is this:

If you wanted to go long 20,000 ES contracts would you:
a) Just stick in a market buy order and watch the prices slip 10 levels ?
b) stick in a limit buy order for 20,000 and watch everyone else jump in front of you ?
c) Make the market look weak so that people start sending in market sell orders that you take the other side of ?

If you answered "C", you would be correct.

Now - who are the people that would easily be convinced to sell when you are buying
a) Other professional traders
b) Amateur traders trading on TA
c) People that read DOM/T&S incorrectly

If you answered "B" and "C" you would be correct. The big guys know how the little guys trade & they exploit that. Fortunately, there is a steady flow of new little guys coming into the markets (because of the aforementioned indudtry selling crap trading methods) so there are always suckers around.

The DOM and Level 2 are basically books of unfilled limit orders. The tape is the list of actual trades. The tape will show printing off at the "Bid" (best buy limit) when someone enters a market sell order. A limit order is a fairly passive order, you wait for price to come to you. A market order is more aggressive - you want to jump in front of the passive orders and make a trade.

This DOM/T&S helps you discern actual buying and selling pressure at any particular time. You may not want to watch it all of the time, rather you will watch how a market behaces and then be ready to watch it at key areas/times.

In my humble :whistling opinion, the equivalent of this in longer term trading is news, derivative trades and the overall 'story' of your stock/future.

You have to avoid any simplistic interpretations of the pictures painted though. Remember - if someone is short a few hundred million, they'll be on CNBC telling you how **** things are at the point in time they want to get out. The news comes out, suckers go short as the pro's unwind their shorts.

There's a lot of short positions on education stocks right now and they have had a bloody good run dow. Go look at APOL/COCO or one of their peers - look at what Eismann is doing in the news. Look at the amount of law companies claiming they will sue on behalf of shareholders. Look how little impact any of this is now having on the prices. Watch this for the next few months and draw your own conclusions about how much charts would have helped you.

Of course, you could also believe "It's all in the chart"

Could you give an example of one of your trades or a time just for analysing purposes ?

I am sure I will prove you are right and also that the other side is right

 

[DionysusToast]

Yes a very valid point. Just a question based upon the above. What kind of trade do you think that would be ? A quick scalp or a slightly bigger move? What time frame are you applying that to?

If you traded purely of DOM & T&S, then it would indeed only be a scalp because the kinds of traders that do the spoofing appear to be aiming for 6-8 ticks most of the time. If it's going into an area where there are a lot of stops, there could be an extended move. So - you have a scalpers entry but not necessarily a scalpers exit.

I ask these question because they would be relevant to the way one trades. This action will either create a quick upmove that one can profir from quickly or it will create some noise , and clarifying the signal after the market has settled down.?

Agreed. However, if you know your market, you can use similar analysis in conjunction with how that instruments behaves in order to nail larger trades, including major reversals but not all of them, of course.

I am assuming that once the professional has made the market look weak, there will be a reaction from all traders that will not be clear immediatley.

Normally, sellers jump in. If they don't then the guy will move out of the way. If they do, he'll mop up all the selling which will also be observable.

 

[DionysusToast]

Could you give an example of one of your trades or a time just for analysing purposes ?

I am sure I will prove you are right and also that the other side is right

I think the only type of calls that would be acceptable would be those made at the time. The only 'live' stuff I have is here.

In which case - there's a short term stock trade and a long term stock trade here : http://www.trade2win.com/boards/general-trading-chat/101876-anyone-coco.html

I'll try to put up some live Futures trades later on. I don't think rear view announcements are worth much.

Current state of COCO trade at the bottom:

Looking forward to your response...

 

[barjon]

For short term trading, the easiest way to explain it is this:

If you wanted to go long 20,000 ES contracts would you:
a) Just stick in a market buy order and watch the prices slip 10 levels ?
b) stick in a limit buy order for 20,000 and watch everyone else jump in front of you ?
c) Make the market look weak so that people start sending in market sell orders that you take the other side of ?

If you answered "C", you would be correct.

toastie

and what do you reckon the candles would look like while C is going on?

Let me guess - the manipulated weakness would have to result in a break of some sort of support for these mechanical TA duffers to sell but, with your pros mopping up all they offered, there would be little or no follow through and/or price would recover quickly (bejesus, it might even show up as a hammer ). In any event, the more astute TA adherent would likely conclude it was a false break and join the long party. Maybe, maybe not.

cheers

jon

 

[DionysusToast]

You are verging on delusional - I have said before that I am lucky enough to be a consistently profitable trader, using TA. Others have said the same.

Now I (we) are not going to present you with statements, teach you how to trade or engage in some blind, biased and meaningless backtest....

Plenty of people on here claim to be profitable. Your own claim of being able to easily show how TA can be used seems to be shifing a lot.

BSD has covered this ground in considerable detail on previous "Does TA work" type threads, and provided you with copious evidence of TA working exceptionally well - anyone can do a search .....

BSD provided lots of pictures of people standing by Ferarris, lots of excerpts of people claiming they made money from TA. If I put up a picture of a guy standing next to a boat and a Ferrari saying that TA is nonsense, it would no more prove my point than it did BSDs.

No-one yet has come up with any single element of TA that can be shown to be reliable. No-one on the TA side has any understanding of survivorship bias.

It's a technical method of analysis. Proving it is valid should be a walk in the park.

 

[Goldmansucks]

Thanks for post.

I assume you traded that based on the tape, I cannot read the tape, but looking at the chart and candlesticks, I would say thats a readable trade one could take.

So in effect your method worked, but so would a candlestick approach, it just depends on the kind of trade, and that was a valid one for candlesticks. I agree totally that some scalp moves would not be picked up using candlestick analysis and onlyu the tape would reveal that information.

But there will be trades that can be analysed using candlestick analysis. Your method may provide an earlier entry, but nonetheless I could also trade it without the tape.


So you are right....and so am I .

Would you not agree ?
Your method gives you a winning trade, so would mine.

 

[DionysusToast]

toastie

and what do you reckon the candles would look like while C is going on?

Let me guess - the manipulated weakness would have to result in a break of some sort of support for these mechanical TA duffers to sell but, with your pros mopping up all they offered, there would be little or no follow through and/or price would recover quickly (bejesus, it might even show up as a hammer ). In any event, the more astute TA adherent would likely conclude it was a false break and join the long party. Maybe, maybe not.

cheers

jon

The above example would occur at high of the day or where you may reasonably expect a swing high or a bounce off resistance.

Obviously on a 60 min timeframe, you wouldn't see anything.

On a lower timeframe, you'll see topping tails/hammer/doji as price ticked back down when the size came in on the ask. You may have been moving up strongly up to that point and then there will be signs of decelleration.

Note that this is but one of the things you can look for using DOM/T&S.

 

[DionysusToast]

So you are right....and so am I .

Would you not agree ?
Your method gives you a winning trade, so would mine.

One swallow does not a summer make

But I agree in this instance that you could have a TA entry on APOL. What about the exit though ?

More is needed - real time of course.

 

[Splitlink]

Plenty of people on here claim to be profitable. Your own claim of being able to easily show how TA can be used seems to be shifing a lot.



BSD provided lots of pictures of people standing by Ferarris, lots of excerpts of people claiming they made money from TA. If I put up a picture of a guy standing next to a boat and a Ferrari saying that TA is nonsense, it would no more prove my point than it did BSDs.

No-one yet has come up with any single element of TA that can be shown to be reliable. No-one on the TA side has any understanding of survivorship bias.

It's a technical method of analysis. Proving it is valid should be a walk in the park.

"Prove it" is an old trick to challenge another to prove what is impossible to prove. No-one is going to be able to prove anything except, perhaps, in hindsight. He can only satisfy himself that he is doing the right thing. If he predicts anything and is wrong then it his reputation on the line----not yours. A very satisfactory and triumphant situation for you, not for him.

I suggest that you make some predictions, yourself. That will make us feel better.

 

[barjon]

.......Note that this is but one of the things you can look for using DOM/T&S.........

toastie,

Obviously I don't dispute that. I was just saying that it would be possible to use TA in your example to arrive at the same conclusion, albeit a little behind the pace.

jon

 

[DionysusToast]

toastie,

Obviously I don't dispute that. I was just saying that it would be possible to use TA in your example to arrive at the same conclusion, albeit a little behind the pace.

jon

Well - in this case, TA would tell you to go short as it looks like price rejection at the high. In fact, the market is about to take a pop back up.

 

[DionysusToast]

"Prove it" is an old trick to challenge another to prove what is impossible to prove. No-one is going to be able to prove anything except, perhaps, in hindsight. He can only satisfy himself that he is doing the right thing. If he predicts anything and is wrong then it his reputation on the line----not yours. A very satisfactory and triumphant situation for you, not for him.

I suggest that you make some predictions, yourself. That will make us feel better.

I agree - which is why I didn't bring the subject up.

By the way I'd post you a simple chart showing you how to daytrade, but I'd prefer to leave you wallow in your own self-agrandised ignorance....

:whistling

 

[Goldmansucks]

toastie,

Obviously I don't dispute that. I was just saying that it would be possible to use TA in your example to arrive at the same conclusion, albeit a little behind the pace.

jon

My point also.

Everything works providing you know and use it within its limitations.

 

[forker]

Well - in this case, TA would tell you to go short as it looks like price rejection at the high. In fact, the market is about to take a pop back up.

prove it!!!! show us how TA would tell you to go short. i am starting to think your knowledge of TA is limited to books and lacks experience.

 

[forker]

Furthermore, that all indicators, as well as candle patterns and combinations thereof are total nonsense that to this day remain unproven.

well you have yet to prove otherwise. What are you basing your claim off?

they are gifted in that they have a particularly strong response to these drugs.Even if you took the drugs, you'd still end up a pencil neck.

you clearly know nothing of steroids and by using it as a reference based of your assumptions of the subject is evidence of your lack of tangibles:clap:

 

[forker]

I would like to ask all your L2 traders one question

do you base any of your analysis off charts? even if it is nothing more than looking at levels

 

[barjon]

Well - in this case, TA would tell you to go short as it looks like price rejection at the high. In fact, the market is about to take a pop back up.

toastie

Intially, maybe. But wouldn't you concede that the same TA would tell you quite quickly that you were wrong to be short (if you had taken the bait) and should be long.

'course you might get chopped about unmercifully if you didn't know what you were doing

jon

 

[forker]

toastie

Intially, maybe. But wouldn't you concede that the same TA would tell you quite quickly that you were wrong to be short (if you had taken the bait) and should be long.

'course you might get chopped about unmercifully if you didn't know what you were doing

jon

i think only a muppet would step infront of the market like that and buy at resistance. L2 isnt a magical "oh look here i can see orders pointing to a breakout". what is stopping a bigger fish from stepping into the market using the tactic of luring L2 traders into that trap only to flood the market with massive sell orders.

L2 is just another tool, nothing more nothing less. its how you use the tools amongst other things that makes or breaks a trader and not the tools on their own

 

[DionysusToast]

prove it!!!! show us how TA would tell you to go short. i am starting to think your knowledge of TA is limited to books and lacks experience.

The situation I am discussing (which can be observed on the ES most days) is a double top where you see a fair amount of participation from new shorts. As the the 5 min bar turns red and a nice tail appears on the top of it, more people jump in.

Of course, you could argue that double tops in conjunction with red bars with long tails on top is not a place that TA traders will join the market short. It just so happens though that they do jump in and it is a common place where price will be pushed back up to clear out their stops.

 

[forker]

The situation I am discussing (which can be observed on the ES most days) is a double top where you see a fair amount of participation from new shorts. As the the 5 min bar turns red and a nice tail appears on the top of it, more people jump in.

Of course, you could argue that double tops in conjunction with red bars with long tails on top is not a place that TA traders will join the market short. It just so happens though that they do jump in and it is a common place where price will be pushed back up to clear out their stops.

glad to see your finally coming out with detail on your thoughts on TA. firstly i would like to point out that a double top + a bearish pin bar alone isnt enough to enter a trade. i agree that the majority of TA traders that are unskilled are playing that sort of game. the truth is there is a lot more to TA than what is written in books or discussed on the average forum thread. your thoughts on how TA traders approach this is ultimately based on bad trades by unskilled traders. would you agree at least that your opinion on L2 is biased and that your understanding of TA isnt entirely complete