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Charts, time frames and indicators! Oh My!

  • #21
  • Feb 8, 2010 9:18am Feb 8, 2010 9:18am
Quoting tormo
My belief is that price is not random from what ever view you look at it, technical or as a market as a whole. It might be hard to see why its moving but I think its possible to catch glimpses with TA alone and profit with it over the long run.

For every movement in price there has to be a reason and like Gaston said in this post

So for example if someone were to have a basic concept about why and when price might move and be able to see this technically, then...
I never said price was random, I said by using TA it impossible to predict where price is going, therefore random to the participant using that method. Gastons post are excellent, and he says the same things I do, orders move price, not the history of price, or any thing derived from it.
Economists have forecast 9 out of the last 5 recessions
  • #22
  • Feb 8, 2010 9:24am Feb 8, 2010 9:24am
And know one said it was always possible that TA can predict moves...but the fact remains that TA predicts more probable moves
  • #23
  • Feb 8, 2010 9:31am Feb 8, 2010 9:31am
Quoting markmm
I never said price was random, I said by using TA it impossible to predict where price is going, therefore random to the participant using that method. Gastons post are excellent, and he says the same things I do, orders move price, not the history of price, or any thing derived from it.
Good point.
There's no transparency to the forex market, no level II such as for US stocks, and only the broke rs and rich traders can see order flow. Thus, we have to settle for reading their typical buy and sell patterns around known events, over an average of time, etc., and find an edge from there.

It seems obvious that the history of price is derived from orders; maybe I'm missing something. I know that the relative speed of how orders (for a given broke r) arrive on the chart is when and how much the bar graph moves, and that the volume of orders is less relevant than in futures and thus takes more skill or simplicity to use as a technical method.
So indirect use of some features of orders can be implied with some chart technical approaches.
  • #24
  • Feb 8, 2010 9:49am Feb 8, 2010 9:49am
Quoting ha-pattern
Good point.
There's no transparency to the forex market, no level II such as for US stocks, and only the broke rs and rich traders can see order flow. Thus, we have to settle for reading their typical buy and sell patterns around known events, over an average of time, etc., and find an edge from there.

It seems obvious that the history of price is derived from orders; maybe I'm missing something. I know that the relative speed of how orders (for a given broke r) arrive on the chart is when and how much the bar graph moves, and that the volume...
So something like a Fib which people may use to predict where price will reverse, how can that help? it has nothing to do with orders, this goes for many other indicators and TA, I agree that you can see footprints of orders that have triggered but to me that is too late. I use other information which helps me predict where orders will be. I am in the process of measuring my system but I am much more confident that the whole foundation of this edge is not related to previous price.
Economists have forecast 9 out of the last 5 recessions
  • #25
  • Feb 8, 2010 10:03am Feb 8, 2010 10:03am
Quoting markmm
I never said price was random, I said by using TA it impossible to predict where price is going, therefore random to the participant using that method. Gastons post are excellent.
It is very hard to prove that it is impossible to design a working strategy solely based on TA. Even if the God of forex would tell me this, without a clear mathematical proof, I wouldn't believe him.

Your mistake, maybe, is that you use the word "predict". I fully agree that the old prices don't predict anything. But I am 100% sure that using the behaviour of the old prices and some trivial indicator one can bring the odds in his favour. There's no prediction here, just the odds which on the long run will bring consistent profit. The mindset of a trader must be exactly that of a casino owner, which knows that regardless of how the players are betting, in the long run he will make profit. The players who left the casino don't predict anything.

There is a strategy called DIBS. If a trader can live with maybe 30% drawdown and is satisfied with 10% yearly profit than this strategy is perfect for him. It is based only on TA, nothing else. It is simple, boring and profitable.

I don't use it and I suggested on its dedicated topic that it doesn't work because from my point of view the drawdown is too big and it takes too long compared to the short periods of profit. But it is perfect as an example of a TA-based strategy which stood the test of time.

To make a long story short, in forex you can't really prove a negative, mostly when the negative is "you can't be profitable based on this or that."
  • #26
  • Feb 8, 2010 10:08am Feb 8, 2010 10:08am
Quoting Sauron
It is very hard to prove that it is impossible to design a working strategy solely based on TA. Even if the God of forex would tell me this, without a clear mathematical proof, I wouldn't believe him.

Your mistake, maybe, is that you use the word "predict". I fully agree that the old prices don't predict anything. But I am 100% sure that using the behaviour of the old prices and some trivial indicator one can bring the odds in his favour. There's no prediction here, just the odds which on the long run will bring consistent profit. The mindset...
Its based on common sense, just like saying the configurations of the stars dont move price, so it is impossible to build a system based on it that will be profitable in the long run.
Economists have forecast 9 out of the last 5 recessions
  • #27
  • Feb 8, 2010 10:13am Feb 8, 2010 10:13am
I have shown a you a strategy which works, solely based on TA. If you don't believe that it works, please study it. But if you dismiss it as trash, then well, you're entitled to an opinion.
  • #28
  • Feb 8, 2010 10:27am Feb 8, 2010 10:27am
Quoting Sauron
I have shown a you a strategy which works, solely based on TA. If you don't believe that it works, please study it. But if you dismiss it as trash, then well, you're entitled to an opinion.
I have read dibs, and the thread seemed to die when people realised it didnt work on the long term. Plus 10% a year, its hardly worth it, even if it did work for a few years.
Economists have forecast 9 out of the last 5 recessions
  • #29
  • Feb 8, 2010 11:41am Feb 8, 2010 11:41am
Wait I still don't understand, are we waiting for an alternative to TA in this thread or merely discussing it's pros and cons?

Either way it's good discussion IMO...what can you say about BSV's no brainer trades? The dudes there kill the market with just support and resistance alone.
  • #30
  • Feb 8, 2010 12:10pm Feb 8, 2010 12:10pm
FTC!!!

Inserted Video
  • #31
  • Feb 8, 2010 12:52pm Feb 8, 2010 12:52pm
Quoting Sim
Wait I still don't understand, are we waiting for an alternative to TA in this thread or merely discussing it's pros and cons?

Either way it's good discussion IMO...what can you say about BSV's no brainer trades? The dudes there kill the market with just support and resistance alone.

I'm not sure but I think he uses external information. I am not saying that TA isn't useful, but it has to be used with another system that provides an edge.
Economists have forecast 9 out of the last 5 recessions
  • #32
  • Feb 8, 2010 1:03pm Feb 8, 2010 1:03pm
Yeah I've studied his work, he really doesn't. Everything for him is on the charts
  • #33
  • Feb 8, 2010 1:29pm Feb 8, 2010 1:29pm
Quoting Sim
Yeah I've studied his work, he really doesn't. Everything for him is on the charts
I pretty sure he uses a news service like IFR, something I also make use of.
Economists have forecast 9 out of the last 5 recessions
  • #34
  • Feb 8, 2010 1:45pm Feb 8, 2010 1:45pm
I want to reiterate that when I talk about TA I am speaking about indicators and such like, S/R and price action used with things like round numbers or known rumoured stops/orders etc to me is not included in my definition of TA. Things like Clockworks method for example I think has an edge, as he uses round numbers as well as S/R.

Anyway I created this thread as a discussion, I see value in S/R, PA and they are very helpful tools in trading, but the trader that has 5 indicators based on historic price for me is never going to find an edge.
Economists have forecast 9 out of the last 5 recessions
  • #35
  • Feb 9, 2010 4:52pm Feb 9, 2010 4:52pm
Quoting markmm
I want to reiterate that when I talk about TA I am speaking about indicators and such like, S/R and price action used with things like round numbers or known rumoured stops/orders etc to me is not included in my definition of TA. Things like Clockworks method for example I think has an edge, as he uses round numbers as well as S/R.

Anyway I created this thread as a discussion, I see value in S/R, PA and they are very helpful tools in trading, but the trader that has 5 indicators based on historic price for me is never going to find an edge.
FWIW, my definition of TA is more along the lines of your description in post #4: price, anything derived from price, anything that can be deduced by studying a price chart. Hence that would include 'price action'; indicators; chart patterns; candle patterns; line studies like trendlines, S/R levels, Fibos, pivots, pitchforks, regression channels; Elliott waves; Gann time/price studies; etc and also abstracts like trend, momentum, congestion, ranges, volatility, breakouts, etc. All of this information is derived from a study of price.

I know traders who've been profitable for many years using TA. But like I said before, I don't think anybody can say with 100% certainty that an edge that's worked in the past will be equally profitable X years from now. That is part of the risk involved in trading; one either chooses to embrace it or not.
  • #36
  • Feb 14, 2010 9:46am Feb 14, 2010 9:46am
Quoting markmm
I have read dibs, and the thread seemed to die when people realised it didnt work on the long term. Plus 10% a year, its hardly worth it, even if it did work for a few years.
The person who first added some real inspiration to the thread Peter Crowns has traded it (Inside Bars) for over a decade. Joel Rensink also uses the methodology and has traded them for many years. People failed to read and acknowledge that what was given by PC and some others was a taste, a beginning, something to look for and to trade. Most people did this but they failed to learn and understand. They failed to look for instances, setups when Inside Bars had a higher probability to work. Peter mentioned that there was times when IBs would work in comparison but very few people took those points into consideration.

Instead what happened was a small group started reading the thread, got bored like most and skipped to the end and made judgements. They created EAs and other automated gadgets to do the homework for them and found there was a little edge (or no edge at all). In fact there were some whose results seemed to differ. Creating an EA to take care of something that needs to be traded mechically because there is discretion required is impossible. Therefore when the results came in they didnt appeal and subsequently this group just hung around, bashed there point until those who traded the method successfully just did what was best, walk away and keep doing what they were doing. It can be a real problem in the forum world. People who are unable to read but feel they know everything come to make a point, which is fine, however once a point has been made then it is just best to move on. This didnt happen and that is IMHO why the thread moved away from its core success.

On the note of 10% per year. Of course that is hardly worth it when you are trading a penny account with 1k. WHO wants to tell there friends 'oh I made $100 this year out of trading FOREX'. No they want to tell there friends 'GUESS WHAT? I turned 1k into 100k this year trading FOREX'.

If you had 10 million dollars would you still claim that 10% wasnt enough, think about that one for a little while. Chances are if you think 10% isnt that great then there is a very good chance that you will never get past the penny stage because risky trading doesnt disapate as your account grows it is more like the ego grows which in the end usually end ups with a bang.

Razor
  • #37
  • Feb 14, 2010 10:13am Feb 14, 2010 10:13am
Quoting Razor_trader
On the note of 10% per year. Of course that is hardly worth it when you are trading a penny account with 1k. WHO wants to tell there friends 'oh I made $100 this year out of trading FOREX'. No they want to tell there friends 'GUESS WHAT? I turned 1k into 100k this year trading FOREX'.
Isn't it better to keep it to yourself? People get jealous.
  • #38
  • Feb 15, 2010 3:28am Feb 15, 2010 3:28am
Quoting tjfxtrader
Isn't it better to keep it to yourself? People get jealous.
hahahaha
''That's all it takes really - pressure and time''
  • #39
  • Feb 15, 2010 4:31am Feb 15, 2010 4:31am
Quoting tjfxtrader
Isn't it better to keep it to yourself? People get jealous.
Of course but some feel the need to express there aclaim in an effort to seem part of the elite trading fraternity, even to those who have no idea what it entails
  • #40
  • Feb 15, 2010 6:13am Feb 15, 2010 6:13am
What's the point of this thread
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