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Charts, time frames and indicators! Oh My!

  • #41
  • Feb 20, 2010 6:20pm Feb 20, 2010 6:20pm
Quoting Sim
What's the point of this thread
Quote
I want to try and start a thread based on my thoughts around the common assumptions around charts, time frames and indicators being useful for predicting price movement.


IMHO, the thread starter wanted to look at how charts, time frames and indicators are commonly used and determine if they are useful for future prediction. Will this be objective or subjective? That's up to the thread starter.
  • #42
  • Feb 20, 2010 6:55pm Feb 20, 2010 6:55pm
If anybody here would like to jump in with their definition of the term "edge", then be my guest. While we're at it, lets also define "trend".

A lot of semantics going around... and little in the way of any real resolution. I like a good philosophical debate from time to time, but ultimately they're not as effective as we'd like them to be. On the other hand, here is something that is very relevant ...

Are you making money? If you are, then terms like "edge" have no value at all. As a matter of fact, the only value is your ability to turn water into wine. Period. How you go about doing it is entirely up to you. You can use TA , FA, pundit advice, the GBP/USD thread on this forum, moon cycles (or even your girlfriend's cycles).

I get upset from time to time with people preaching "naked style" trading. If someone is bankrolling with an MACD, MMAs, and 4 MTF RSI's on their screen, then what's the problem? Ultimately, trading is a one man show, what happens along the way is entirely up to you. How you get there is entirely irrelevant (at least to me, and the guys who are on the other side of your losing trades).

Peace,
MM
  • #43
  • Feb 20, 2010 9:10pm Feb 20, 2010 9:10pm
Quoting mr.marketz
If anybody here would like to jump in with their definition of the term "edge", then be my guest. While we're at it, lets also define "trend".

A lot of semantics going around... and little in the way of any real resolution. I like a good philosophical debate from time to time, but ultimately they're not as effective as we'd like them to be. On the other hand, here is something that is very relevant ...

Are you making money? If you are, then terms like "edge" have no value at all. As a matter of fact, the only value is your ability to turn...
Edge is having a positive expectancy based on statistics.

Trend is a concept that refers to the direction price has moved over a period of time with the expectation that price will continue in that same direction.

The naked traders are trying to show that (most) indicators are unnecessary and misleading. Some naked traders take it to extremes and include all indicators. A chart with manually plotted trendlines is OK but one with computer generated trendlines is not even if the trendlines are exactly the same. Part of the problem is with the name "indicators". Most code goes in the indicator folder and is called an indicator. An indicator that plots the open, high, low and close lines is not really the same as an indicator that plots a moving average or stochastic but they are both called indicators.

If you are making money you are lucky whether or not you have an edge.

Debating on forums is dicey at best. A lot of ego involved. Debates usually result in a rift complete with name calling, insults, character assassination, etc...
  • #44
  • Feb 20, 2010 11:18pm Feb 20, 2010 11:18pm
TJ,

I like "your" definitions (very concise). Here are mine...

edge - experience.
trend - I'll go with your definition on this one.

Tootles,
MM
  • #45
  • Feb 21, 2010 5:42am Feb 21, 2010 5:42am
Yeah I thought the OP had more to say? I assumed he was gonna go into something quite detailed
  • #46
  • Mar 15, 2010 11:38am Mar 15, 2010 11:38am
Quoting Sim
What's the point of this thread
Sorry, I have been away for a while due to work. Anyway the point of this thread was to make people think about the tools they are using to trade with and what they are derived from.
Economists have forecast 9 out of the last 5 recessions
  • #47
  • Mar 15, 2010 11:42am Mar 15, 2010 11:42am
Quoting markmm
Sorry, I have been away for a while due to work. Anyway the point of this thread was to make people think about the tools they are using to trade with and what they are derived from.
It was a good try Markmm, perhaps you can share some of your own thoughts now you're back.

Was it your post earlier in the thread that compared trading off charts as akin to driving forward by looking in the rear view mirror?

Dan
  • #48
  • Mar 15, 2010 12:07pm Mar 15, 2010 12:07pm
Quoting AstonDan
It was a good try Markmm, perhaps you can share some of your own thoughts now you're back.

Was it your post earlier in the thread that compared trading off charts as akin to driving forward by looking in the rear view mirror?

Dan
Hey Dan,

Yeah what I meant is looking at a chart only shows how price moved previously. I don't think this can tell you where price is going next based on that. To know where price is going next or at least have an educated guess you need to know where orders are sitting that have not been triggered yet.

I am by no means an expert on order flow and I think price movement can give clues on orders.
Economists have forecast 9 out of the last 5 recessions
  • #49
  • Mar 15, 2010 12:22pm Mar 15, 2010 12:22pm
As I have always said....the folks that trade using TA are simply treating the market like a mathematical formula. You give a tech savvy guy a chart and he immediately tries to derive a "formula" for the price action. If you forget about TA and study pure price action....I think most would be better off. The patterns in the FOREX market are repeatable, but there are 1 million variations that no computer program can ever pick up. Trading is more of an art than a science.
  • #50
  • Mar 15, 2010 1:32pm Mar 15, 2010 1:32pm
Quoting markmm
Hey Dan,

Yeah what I meant is looking at a chart only shows how price moved previously.
Hey Markmm, no i liked the analogy, i just couldn't remember if it was yours.

I hope you continue with the thread but it would be a shame for it to take the traditional 'orderflow' route. I think it's a cul de sac.

Good trading to you,
Dan
  • #51
  • Mar 15, 2010 1:33pm Mar 15, 2010 1:33pm
Quoting AstonDan
Hey Markmm, no i liked the analogy, i just couldn't remember if it was yours.

I hope you continue with the thread but it would be a shame for it to take the traditional 'orderflow' route. I think it's a cul de sac.

Good trading to you,
Dan
Thanks Dan, but what else moves price?
Economists have forecast 9 out of the last 5 recessions
  • #52
  • Edited 1:36pm Mar 15, 2010 1:34pm | Edited 1:36pm
Quoting markmm
Thanks Dan, but what else moves price?
Nothing but orders, but that's not really my point.

Actually, to correct myself a little, of course orders move price, but orders are placed for a reason other than 'of themselves' (more often than not at least).
  • #53
  • Mar 15, 2010 1:36pm Mar 15, 2010 1:36pm
Quoting AstonDan
Nothing but orders, but that's not really my point.
Ok, I can keep repeating how I don't think past price and derivatives of it are a enough to trade from.
Economists have forecast 9 out of the last 5 recessions
  • #54
  • Mar 15, 2010 1:39pm Mar 15, 2010 1:39pm
Quoting markmm
Ok, I can keep repeating how I don't think past price and derivatives of it are a enough to trade from.
No need to repeat yourself. I'll leave you to it.

All the best,
Dan
  • #55
  • Mar 15, 2010 1:42pm Mar 15, 2010 1:42pm
Quoting AstonDan
Nothing but orders, but that's not really my point.

Actually, to correct myself a little, of course orders move price, but orders are placed for a reason other than 'of themselves' (more often than not at least).
True, but I think that falls under order flow. Anyway I think I have made my points I shall let this thread perish there are better ones out there.
Economists have forecast 9 out of the last 5 recessions
  • #56
  • Mar 15, 2010 2:12pm Mar 15, 2010 2:12pm
Mark I thought you were gonna go into detail of what you do/how you perceive things?
  • #57
  • Mar 15, 2010 2:18pm Mar 15, 2010 2:18pm
Quoting Sim
Mark I thought you were gonna go into detail of what you do/how you perceive things?
There are a lot of other threads like Scottys or Behind Order flow that cover my thinking.
Economists have forecast 9 out of the last 5 recessions
  • #58
  • Mar 15, 2010 2:21pm Mar 15, 2010 2:21pm
Quoting markmm
Hi traders,

I want to try and start a thread based on my thoughts around the common assumptions around charts, time frames and indicators being useful for predicting price movement.

I am sympathetic with any new trader who gets caught up in this way of thinking as I went through the same as a newbie trader.

I will post more soon,

Mark
I just see the thread as completely one way at the moment?
  • #59
  • Mar 15, 2010 2:56pm Mar 15, 2010 2:56pm
Quoting Sim
I just see the thread as completely one way at the moment?
What do you mean?
Economists have forecast 9 out of the last 5 recessions
  • #60
  • Mar 15, 2010 3:02pm Mar 15, 2010 3:02pm
You gave your thoughts about half of the matter, which is fine, so do you not want to present any form of alternative, from your opinion not someone else's? Sorta seems logical? If not don't worry
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