My current interperatation of markets is this, it somewhat agrees/disagrees with alot of posts so I'm just going to lay it out.
Fundamentals shape large movements. They define weekly/monthly/yearly trends. A pure fundamental trader would have a tough time day-trading(outside of news) because they are forcasting what impact global events might have in the long run. I don't believe a fundamental trader can trade news well without a solid understanding of technical analysis. The news will immediately shape the price however it's so short term that technical anlaysis has alot of influence on the price.
I think that because I see that although TA is relevant on long term charts, it's Technical Analysis making up "the waves" as people like to call them. The short term inbetween the fundamental movements. Technical analysis is watching the fundamental events being priced into the market, and playing with the gauranteed retracements and continuation of the fundamental move, which can be influenced by TA. It's a lagging strategy, it's possible to define future turning points, or area's of interest where some action might occur, but it's strengths lie in interperating the fundamental changes as they are priced into the market. I try my best to determine what is happening, is it actually a point in the price action that can be determined by TA, or do I need to wait for confirmation of the fundamental move, and then play the TA after as soon as possible.
The range and intensity of the waves can definitely be affected by technical analysis. However I find over-all trends cannot. Trendlines and support and resistance are really the only things I consider. I use 1 12LMA to filter some of the actual noise in the past bar or 2, but past that I get nearly no information anymore from indicators. I just got used to them...then I stopped looking at them...what are they actually telling you that the price and support/resistance/trendlines aren't?
Since I consider TA to already be a lagging form of trading, I can't justify using indicators that tells me what to do based on what happened 2-10+ bars ago. It needs to be a fundamental move for that signal to be accurate. Does the indicator let you know it was a fundamental move? I think that's the important filter alot of people don't want to bother with...what made your indicator signal enter?
There is a huge grey area that I think people have to consider and decide whats best for themselves.
-Using lagging indicators in short term charts(60min and less) seems a bit rough to me. I've been there and done that, but trading short term on old data just chews you up and spits you out. Trading current price action, at the current bar, hitting the current trendline/support/resistance seems to make much more sense short term. Letting old data a few bars back make your decision for you isn't effective because in the short-term realm of TA, things change to fast...moves are often more or less over in a few bars. At least the area where you can enter with a short S/L and solid T/P is gone.
-However using lagging indicators on large time frames (daily/weekly/monthly) can be much more forgiving as your in the trade for the long haul anyhow.
Anyway I might need to sum that up a bit. I think Technical Analysis is the most useful when trading the short-term effects of large fundamental movements. You need movement to chart it, therefore it's already a lagging indicator on it's own. The realm of short-term trading changes much to fast to lag behind anymore than you currently are just by using TA. Waiting for indicatars that rely on several+ bars of information closes your window of opportunity in most cases and often means you are actually chasing trades. Your late. Your s/l has to be bigger than it needs to be, and your T/P is smaller than it needs to be.
Of course there are exceptions, everybody's different but for myself using TA is only consistantly useful when I'm trading trendline/support/resistance breaks/continuations. Determining what trades to take is the "skill" part, but I can actually feel myself getting consistantly better the more I trade with just price action, support, resistance, trends, and a single 12LWMA on the median price of bars to use with discretion.
It's been a few years of 6-10hr+ days, just watching 12 pairs and charting what I felt was relevant at the time. Basically just soaking up as much as I could across most of the major pairs, only now it really feels like it's sinking in. Only since I've focused on trading the price and what it's doing right now, does it feel like I'm making huge progress. I'm not so sure there are any shortcuts, or complicated calculations that make you money. If there is I think you will need to develop them yourselves, whats readily available on the internet just does hold very much value in my opinion.
Fundamentals shape large movements. They define weekly/monthly/yearly trends. A pure fundamental trader would have a tough time day-trading(outside of news) because they are forcasting what impact global events might have in the long run. I don't believe a fundamental trader can trade news well without a solid understanding of technical analysis. The news will immediately shape the price however it's so short term that technical anlaysis has alot of influence on the price.
I think that because I see that although TA is relevant on long term charts, it's Technical Analysis making up "the waves" as people like to call them. The short term inbetween the fundamental movements. Technical analysis is watching the fundamental events being priced into the market, and playing with the gauranteed retracements and continuation of the fundamental move, which can be influenced by TA. It's a lagging strategy, it's possible to define future turning points, or area's of interest where some action might occur, but it's strengths lie in interperating the fundamental changes as they are priced into the market. I try my best to determine what is happening, is it actually a point in the price action that can be determined by TA, or do I need to wait for confirmation of the fundamental move, and then play the TA after as soon as possible.
The range and intensity of the waves can definitely be affected by technical analysis. However I find over-all trends cannot. Trendlines and support and resistance are really the only things I consider. I use 1 12LMA to filter some of the actual noise in the past bar or 2, but past that I get nearly no information anymore from indicators. I just got used to them...then I stopped looking at them...what are they actually telling you that the price and support/resistance/trendlines aren't?
Since I consider TA to already be a lagging form of trading, I can't justify using indicators that tells me what to do based on what happened 2-10+ bars ago. It needs to be a fundamental move for that signal to be accurate. Does the indicator let you know it was a fundamental move? I think that's the important filter alot of people don't want to bother with...what made your indicator signal enter?
There is a huge grey area that I think people have to consider and decide whats best for themselves.
-Using lagging indicators in short term charts(60min and less) seems a bit rough to me. I've been there and done that, but trading short term on old data just chews you up and spits you out. Trading current price action, at the current bar, hitting the current trendline/support/resistance seems to make much more sense short term. Letting old data a few bars back make your decision for you isn't effective because in the short-term realm of TA, things change to fast...moves are often more or less over in a few bars. At least the area where you can enter with a short S/L and solid T/P is gone.
-However using lagging indicators on large time frames (daily/weekly/monthly) can be much more forgiving as your in the trade for the long haul anyhow.
Anyway I might need to sum that up a bit. I think Technical Analysis is the most useful when trading the short-term effects of large fundamental movements. You need movement to chart it, therefore it's already a lagging indicator on it's own. The realm of short-term trading changes much to fast to lag behind anymore than you currently are just by using TA. Waiting for indicatars that rely on several+ bars of information closes your window of opportunity in most cases and often means you are actually chasing trades. Your late. Your s/l has to be bigger than it needs to be, and your T/P is smaller than it needs to be.
Of course there are exceptions, everybody's different but for myself using TA is only consistantly useful when I'm trading trendline/support/resistance breaks/continuations. Determining what trades to take is the "skill" part, but I can actually feel myself getting consistantly better the more I trade with just price action, support, resistance, trends, and a single 12LWMA on the median price of bars to use with discretion.
It's been a few years of 6-10hr+ days, just watching 12 pairs and charting what I felt was relevant at the time. Basically just soaking up as much as I could across most of the major pairs, only now it really feels like it's sinking in. Only since I've focused on trading the price and what it's doing right now, does it feel like I'm making huge progress. I'm not so sure there are any shortcuts, or complicated calculations that make you money. If there is I think you will need to develop them yourselves, whats readily available on the internet just does hold very much value in my opinion.