Predicting The Market

[new_trader]

Thankyou!

Why have you reported my post?

Are you for real?

You are going on about using information, about the global financial markets....and you report my post!

Let me guess, you are currently dressed as Mickey Mouse, and using a Euro Disney internet connection...

Go to bed, NT.

You still, haven't grasped what I have said. I didn't say it was about using information, YOU said that. If an institutional investor is buying shares in a company whilst the public is selling, who out of the two would you say is better informed?

Does that make it simpler for you?

 

[Trader333]

Information, or lack of it leads to motive and that creates the real market...Recognising who has the right (as opposed to false or misleading) information is the key to success.

NT,

Are you saying that it is not possible to be a successful trader based on technical analysis ? Your comment implies that being "in the know" is the key to success. If that is true then would you like to comment on how this may be achieved ?


Paul

 

[Crap Buddist]

A prediction is a statement or claim that a particular event will occur in the future in more certain terms than a forecast.

From wikipedia, their spin on it.


OK, so its more certain than a forecast, better get that defined hang on.

Forecasting is the process of estimation in unknown situations. Prediction is a similar, but more general term, and usually refers to estimation of time series,


well based on that I'd say prediction is more of a correct term to use, so yes. Because of the known situations that the trader observes. I mean he can know Trend, the market cant hide that , fake price ,deviation from, sure and I like to see that happen to support the position taken, if you think about it.

mmm but hang on the last bit estimation of time series Bloody hell is it forecasting then. ?

OK I forecast that prices will go higher in the next 3 hours, get long. hmm but hang on i think like that and do think of a time element so it is a prediction or is it?

I think well the force of the market is likely to be pushing to the upside over the next x hours.....

LOL..... the solution

I'm calling it a Fordiction, Until ive upped? me gameplay. hello oxford dictionary stick this one in....

 

[new_trader]

NT,

Are you saying that it is not possible to be a successful trader based on technical analysis ? Your comment implies that being "in the know" is the key to success. If that is true then would you like to comment on how this may be achieved ?


Paul

Paul,

Naturally if you are "in the know" then you have a distinct advantage, but that would be regarded as insider trading. This does go on but people like you and me are unlikely to ever have access to that sort of information. The next best thing is trying to determine who is in the know, agreed?

I would never say it is not possible to be a successful trader based on technical analysis. What I will say is that if Warren Buffet was interested in buying shares in a company I doubt he would look at his chart to check moving average crossover or wait for a long legged doji.

 

[Crap Buddist]

Paul,

Naturally if you are "in the know" then you have a distinct advantage, but that would be regarded as insider trading. This does go on but people like you and me are unlikely to ever have access to that sort of information. The next best thing is trying to determine who is in the know, agreed?

I would never say it is not possible to be a successful trader based on technical analysis. What I will say is that if Warren Buffet was interested in buying shares in a company I doubt he would look at his chart to check moving average crossover or wait for a long legged doji.

mmm, isnt Buffet classed as an investor, ie he invests in the business, buys the value of the business as opposed to exploiting micro valuations that a trader might do without any regard for fundamentals of the assests and their earning capacity/potential involved. ?

 

[dcraig1]

You still, haven't grasped what I have said. I didn't say it was about using information, YOU said that. If an institutional investor is buying shares in a company whilst the public is selling, who out of the two would you say is better informed?

Does that make it simpler for you?

Far too generalised. Some mutual and hedge funds manage to turn in shockingly bad performances. If it is true that managed funds underperform trackers - and it seems that it is - then at least some institutional investors are not all that they are cracked up to be. The obvious conclusion is that on more than a few occasions the public might be just as right (or wrong) as some institutional players.

 

[new_trader]

mmm, isnt Buffet classed as an investor, ie he invests in the business, buys the value of the business as opposed to exploiting micro valuations that a trader might do without any regard for fundamentals of the assests and their earning capacity/potential involved. ?

Yes, but why would it matter whether you were a short term trader or a long term trader? One thing I am almost certain of and that is Warren Buffett would not trade in lots of 500 shares would he? (Depending on the value of the shares of course)

 

[new_trader]

Far too generalised. Some mutual and hedge funds manage to turn in shockingly bad performances. If it is true that managed funds underperform trackers - and it seems that it is - then at least some institutional investors are not all that they are cracked up to be. The obvious conclusion is that on more than a few occasions the public might be just as right (or wrong) as some institutional players.

True, but whose side would you prefer to be on?

 

[Crap Buddist]

Yes, but why would it matter whether you were a short term trader or a long term trader? One thing I am almost certain of and that is Warren Buffett would not trade in lots of 500 shares would he?

well no but Buffet is an investor, not a trader. And short term traders can completely ignore fundamentals , because whatever the news to hit the market you can trade it without knowing what the news content was ,the news might actually distract a trader.

But I think theres no better or best way, maybe either or. Again choice for the individual trader.

Its like that story about the trader and the silver analyst the analyst says sir heres a big list of reasons to sell silver etc.. the trader says ok buy silver now, the analyst says but ive told you based on all these fundamentals that we should sell silver, so why are you buying?

The trader says... Because its going UP NOW.

thats roughly how the story goes....

 

[new_trader]

well no but Buffet is an investor, not a trader. And short term traders can completely ignore fundamentals , because whatever the news to hit the market you can trade it without knowing what the news content was ,the news might actually distract a trader.

But I think theres no better or best way, maybe either or. Again choice for the individual trader.

Its like that story about the trader and the silver analyst the analyst says sir heres a big list of reasons to sell silver etc.. the trader says ok buy silver now, the analyst says but ive told you based on all these fundamentals that we should sell silver, so why are you buying?

The trader says... Because its going UP NOW.

thats roughly how the story goes....

But there is a clue in your anecdote, isn't there? The price is going up when the public is being told to sell....Hmmmmm

 

[Crap Buddist]

But there is a clue in your anecdote, isn't there? The price is going up when the public is being told to sell....Hmmmmm

Maybe they are maybe they aint. Does it matter ? Look at the charts whats happening now? In the course of a day/week/month/year etc. say the market can change direction say 3 times

Now would it matter who has been told what ? who is in the know & who isnt etc. If the price is printing on your screen/chart what else do you need to see whats happening?

I mean if that analyst with the silver came in and said sir all the fundamentals for silver look bullish buy silver, and the trader could see silver was about to make a move up im sure he'd still make trade long because again the price is going up now.


So a trader who may trade this way will be free from polltuion of news "stories" etc If he doesnt even know it , it allows him/her to focus on the price . If a trader thinks what the actual price is doing is important to his trade outcome then I suggest this option should be considered, because I do not think a trader trading with all news known is at an advantage over a trader who ignores it. Providing they can both trade to a reasonable standard.

I think it comes down to a matter of personal preferance to the individuals concerned.



This popped in my head.

"When I look outside and see it raining I do not need a weatherman informing me that is the case" CB

 

[new_trader]

Maybe they are maybe they aint. Does it matter ? Look at the charts whats happening now? In the course of a day/week/month/year etc. say the market can change direction say 3 times

Now would it matter who has been told what ? who is in the know & who isnt etc. If the price is printing on your screen/chart what else do you need to see whats happening?

I mean if that analyst with the silver came in and said sir all the fundamentals for silver look bullish buy silver, and the trader could see silver was about to make a move up im sure he'd still make trade long because again the price is going up now.

Yes, it does matter. How can a trader "see" that silver is about to make a move up? What gives a trader such astonishing foresight?

So a trader who may trade this way will be free from polltuion of news "stories" etc If he doesnt even know it , it allows him/her to focus on the price

Yes, the price. Just like the public.

 

[alexander]

What happens in the event that the market starts to go up to your expected s/r level but only moves about 20% towards it and then suddenly reverses ? and goes back through your entry and you are now in loss ?

Do you wait and think to yourself that your prediction still stands ?
Do you close the trade and accept a loss ?
If you think your prediction is still valid how long do you wait ?
If the market moves against you, then how far against you before you close your trade ?

Markets rarely go straight up (or down) to s/r levels and there is a great deal of in between scenarios that need to be determined in advance as to how you will act if you encounter them.


Paul

Paul summarized the questions/problems traders/systems face after entering a trade.

Coming up with a methodology to deal with the issues raised by these four questions is the key to profitable trading whether that is done in a mechanized or discretionary fashion.

Never came across before anyone who provided such a concise summary of the questions that must be answered after a trade is opened and there is a loss. These questions are so important because they deal with the credence in the original probability value/decision involved in opening a trade.

I am convinced that these four questions hold the secret to profitable trading.

Alex

 

[Crap Buddist]

Yes, it does matter. How can a trader "see" that silver is about to make a move up? What gives a trader such astonishing foresight?

Its gestalt, a collective perfecting of numerous skills which ultimately postions the trader in perfect union with the market.

Socrates can probably give a far better expansion on this vast topic.

Im still ignorant or still working away to improve, so not qualified lead or head this area, participate and stretch my own thinking yes, interactive student yes, teacher no.

 

[alexander]

Its gestalt, a collective perfecting or numerous skills whcih ultimately postions the trader in perfect union with the market.

It was ge-stalt that drove Hitler to his worse disaster fighting Russians during a winter in opposition to all advice from his generals.

Gestalt can bring a genius to his knees begging for mercy.

Alex

 

[Trader333]

The next best thing is trying to determine who is in the know, agreed?

NT,

Yes I agree with you if it is possible but I am not sure that it is on a consistent basis. I have done a lot of work with Level II and Price - Volume analysis as well as other methods to try (from a retail traders standpoint) determine who was in the know but it never really worked out.

I would never say it is not possible to be a successful trader based on technical analysis. What I will say is that if Warren Buffet was interested in buying shares in a company I doubt he would look at his chart to check moving average crossover or wait for a long legged doji.

There is only one Warren Buffet and no one else has been quite as able to emulate his success which is curious to me.

From a purely technical trading and mechanical approach I think that Grey1 has consistently demonstrated that you can make large profits every day using just that approach. He uses MTF cycle analysis and cycle divergence as a means to trade stocks and the results speak for themselves but no-one quite knows exactly how he does it. The main point being that consistent technical analysis as a means to trading can be very profitable.


Paul

 

[Crap Buddist]

It was ge-stalt that drove Hitler to his worse disaster fighting Russians during a winter in opposition to all advice from his generals.

Gestalt can bring a genius to his knees begging for mercy.

Alex

Hence the need for a disaster stop . ? Futher could we say that Hitler was exposed to what Douglas suggests "A point of Forced Awareness" ?

 

[alexander]

Hence the need for a disaster stop . ? Futher could we say that Hitler was exposed to what Douglas suggests "A point of Forced Awareness" ?

Remember LTCM fund? Those people were supposed to be genius. Yet, they knew little it seems about stop-losses, only when to enter a high probability trade.

It appears that markets reward methodology rather than intelligence.

Alex

 

[Profitaker]

Remember LTCM fund? Those people were supposed to be genius. Yet, they knew little it seems about stop-losses, only when to enter a high probability trade.

There's an awful alot more to the LTCM debacle than that.

 

[toro168]

I keep reading on these boards and some websites that no one can predict the market. I would like to open this up for discussion if i may.

When you say you cannot predict the market, what EXACTLY do you mean?

Are you saying that it is impossible to know which direction the market will go to?
Or what price the market will go to?
How do you differentiate between forecasting and predicting ?
How and why do you enter a trade if you have not made some sort of prediction about price?

Is the word predict in need of a clerer definition when referring to the markets.


I raise this question because i was reading a post on this board about a ftse strategy. It began with the line that no one can predict which way the FTSE will go. That being the case, you would trade the FTSE with a PROBABILITY based system, maybe looking for indicators to give bias to your decision .

Isn't that a bit like tossing a coin ?

Comments appreciated.

A little system I have been messing with seems to predict the Dow very well. It is purely mechanical and uses price info only ( no indicators ). It has given ten signals since August 06 and only keeps you in the market for one week at a time. It gives a date and time to enter the market and it gives a date and time to exit the market so there is no confusion and no need to sit in front of your computer. Using this mechanical approach can reduce the profit - this system is averaging 100 points per month. I have no idea if this will work in different market phases but it does look promising and seems to be able to predict small market moves. So to answer your question yes I think the markets can be predicted but maybe not all the time.