Is technical analysis the easy option?

[Bloodhound]

I disagree about order flow - to me it seems incredibly simple. The hard part is having the patience to wait for it.

Psmith

FWIW I think the hard part about order flow is the dawning realisation that technical analysis doesn't work and that weeks, months and years of research and learning may have been wasted.....

 

[weakpunter]

WP - There are many different TA theories, indicators and methods - to say that ",they all work at times" is something you could not possibly know because it would fill a couple of lifetimes trying them 'all' out. If you did try them all out, it would only be because you hadn't found anything that had worked yet.

Like I say - read W D Gann and come back to us.

Dionysus,

I think you´ve misunderstood me going back to my first post when I said they all work at times ,what I meant was both TA , FA and Price action ,as the posts before me where debating wether TA was best or FA etc, I merely said that they all work at times in reference to all forms of analysis and it was our job as traders to work out which one was working right now and take advantage of what we have recognized. I´ll skip Gann mate already read him, again regarding TA I dont use more than 3 methods Trendlines,supp/res , and Mrkt profile thats it ,I combine that with price action when thats the right course, and market news i.e data and focussing on what the most influential instrument on the todays market is wether its the s&p 500/currency/oil etc , between these 5 or 6 tools I use to help me trade I look for the one that I can see is working , shimples!! sorry for the long winded explanation but you clearly misunderstood what I was getting at.

 

[DionysusToast]

seems reasonable WP

Mind you - I don't personally use any textbook TA.

I think it's 100% nonsense, although threads tend to derail quickly when I mention that...

 

[weakpunter]

seems reasonable WP

Mind you - I don't personally use any textbook TA.

I think it's 100% nonsense, although threads tend to derail quickly when I mention that...

No probz,

Iam with you on not using textbook TA , if anything Iam pretty contrarian and will take the opposite position of most TA users once Ive recognized that they have got enoguh confirmation to use theyre TA signals as thats usually the time that TA dosent work lol! if you get my drift. But I suppose in a round about way Iam still using TA but just on a pychological basis rather than of beleif in the science of it.

 

[DionysusToast]

Funnily enough....

I set alerts at high of day, low of day, prior high/low, sometimes pivot points, obvious support & resistance points.

Although not because I think they are magical.

These are levels where people with deep pockets tend to spoof and sucker people into positions that they get to regret very quickly.

 

[weakpunter]

Very Funny indeed it appears we have more in common than initailly thought, it takes me back to when I was training some trainees up 8/9 years ago, and the market had been doing nothing all day ,4 tick range in the short end fixed income, so I asked the guys what do you think you should do ......so most responded that they have just recognized the daily range and that it was now on the support level for the 5th time so they should buy it, I said I agree with their analysis and then proceeded to sell the support bid, as soon as I did it smashed through the bid and support level and made new lows, when they asked me whay I did that I said because unfortunatley most traders using TA only pluck up the courage to use it when they have had 4or 5 points of confirmation so my logic told me as most of them are usually wrong the level wont hold and even if it does my downside will be tiny compared to the upside if it busts the support. but going back to our intial point of discussion we can still use TA but just unconventionally i.e its good to know what the herd or rather sheep are thinking and when the sheep are looking to enter.

 

[redart]

Beachtrader, are you still using your previous method from your journal?
You seemed to do brilliantly. Although im confused, because you mentioned about the 'realisation that TA doesn't work', although id definitely call your method (assuming it hasn't changed) TA...?...

I guess there's always confusion about what TA actually is. I tihnk anything where you look at a stock chart to make your trading decisions is TA.

Has anyone started a thread on the propper way to trade before? (I guess that's Fundamental analysis from what people here say?)

 

[Bloodhound]

Beachtrader, are you still using your previous method from your journal?
You seemed to do brilliantly. Although im confused, because you mentioned about the 'realisation that TA doesn't work', although id definitely call your method (assuming it hasn't changed) TA...?...

I guess there's always confusion about what TA actually is. I tihnk anything where you look at a stock chart to make your trading decisions is TA.

Has anyone started a thread on the propper way to trade before? (I guess that's Fundamental analysis from what people here say?)

Hi Redart,

I think it would be fair to say that in the past few months my trading has changed almost completely. Dionysus Toast has very succinctly outlined what I do in his post above. I guess you could say I employ a degree of TA (well I draw a horizontal line or 2) but, as WP mentioned above, I am using TA to trade in the opposite direction to most TA traders. I certainly don't have entry set-ups in the traditional TA sense.

With regards to the proper way to trade (I am talking as a complete novice BTW) I'm not sure there really is one. Everything works some of the time but nothing works all of the time. The thing that forced me to shift to what I do now was asking myself why did I keep getting stopped out / faked etc. by using TA set-ups which were meant to work. Once I had got a vague handle on that then a lot of lightbulb moments started happening.

All the best

BT

 

[iota]

Has anyone started a thread on the propper way to trade before? (I guess that's Fundamental analysis from what people here say?)

After extensive searching I personally keep hitting brick walls. I find snippets here and there (important annual economic announcements/seasonal trends), but that's all.
I think it'd be good to have something covering FA to counter the TA mega threads on various boards.

Thanks to everyone that's contributed so far to the discussion, it's been good to read something that didn't descend in to bickering.

 

[bedsit]

So is there bias to TA because it's easier to watch and read the indicator on the screen where someone else has done the hard work (the math, the concept) than it is to do research that FA seems to require?

It wouldn't be fair for me to say anything bad about TA. I use it all the time for my trading decisions. Most of the time my failed trades are because of poor discipline and bad money management rather than TA. If I stick to good set ups based on TA together with nice risk/reward success rate is much higher than 50%.

Anyway I wouldn't say it's an easy option. It somehow implies that it's easy to apply it - not the case. One need lot of experience as TA is not exact - it's quite an art.

 

[Jaydee]

Most analysis at best is flawed, at worst is total tripe. Doesn't matter what you use: TA, FA or order flow. TA is based on knowledge after the fact, FA is based on that overused word 'value' (which is an illusion) and order flow is based on trying to guage momentum or S/R points just by using numbers on a screen which is prone to inherent randomness (due to a lack of liquidity in the extreme short term).

While the above is delibrately cynical, you are actually better off using something than nothing at all. I'm just trying to get across that analysis should be taken with a pinch of salt - the end user should aim to disprove it works and falsify it to get the best result.

At the end of the day, a traders post-trade analysis will be far more important than pre-trade analysis.

Back on topic with TA being easy; I think TA is actually harder than FA! It may look easy but it is open to far more red herrings, superstition and nonsense than analysising a company's balance sheet, for example.

 

[iota]

At the end of the day, a traders post-trade analysis will be far more important than pre-trade analysis.

How so?

Back on topic with TA being easy; I think TA is actually harder than FA! It may look easy but it is open to far more red herrings, superstition and nonsense than analysising a company's balance sheet, for example.

I was thinking specifically for non-equity instruments when I posted.

 

[oildaytrader]

How many p/a set ups fail in this chart?.Could anybody please draw circles on failed set ups and post the images.

 

[oildaytrader]

You haven't got a scooby.

Answer my previous post numptious.

Psmith

I have to give in and agree , it is so frecking simple.

If it is simple , it can not be easy.

 

[Jaydee]

How so?

I was thinking specifically for non-equity instruments when I posted.

In the first case, becasue you will be analysing your actual performance rather than what you may/may not have done in hindsight.

It doesn't matter what instrument you use, I just gave a balancesheet as an example. If you want to calculate the fair value of a future you can and it's a heck of a lot easier than trying to find some order amongst a seductive TA chart.

TA is tough becasue it looks so easy but you have to understand the flaws for it to be used effectively. It can make you believe something is there when it isn't thus luring you in on a fools errand. Most people use it to try and find some sort of certainty, when it is all about uncertainty, odds, expected value and chance.

 

[redart]

So using Fundamental Analysis, should one be long or short on cable at the moment? What's our target and our stop?

 

[Bloodhound]

Iota,

To try and answer your original question. (Please bear in mind I have only been in this game for a couple of years so I'm not talking with much authority on the subject).

In my own experience what will seem easiest is what seems easiest to you. I personally only trade forex for the simple reason that I can not fathom out the fundamentals so never have any bias. Then again I am very much a day trader and am rarely in a position for more than an hour or so. When I trade I am primarily concerned in what other traders might be doing and where their orders might be - that works for me but maybe not for others. I would guess position traders need to have a much better view of the relative strengths and weaknesses of the various currencies they are trading which may be determined by trend (TA) and macro-economic considerations (FA)? The conclusion I think I am coming to is that day traders probably place less reliance on FA and more on price based analysis - be that orderflow, TA or anything else like that. Longer term traders are probably more influenced by FA.

Not sure if this will be of any use.

All the best

BT

 

[redart]

Depends on your timescale. Should have been short cable since 1914, and that hasn't changed.

Psmith

a 100 year long trade. I like it.

I remember Genics/Roth's said he trades using FA, but he seemed to trade relatively short term. Maybe a week or so hold for a trade...?>...
He never gave anything away about his method. I wonder what sort of 'fundamentals' one uses for realatively short term positions.

 

[wackypete2]

I think you have thoroughly exposed yourself in one idiotic post and I cannot take your opinions seriously following this.

Only 1 idiotic post???? LOL
As of this posting he has 2384 of them.

Peter

 

[oildaytrader]

Only 1 idiotic post???? LOL
As of this posting he has 2384 of them.

Peter

If anyone had bothered to draw circles on the chart I posted, all the price action gurus would look like snake oil merchants.So nobody bothered.

Why were you trying to ramp up Shakespeare?