There are those who would argue that successful trading is best done while responding to changing market conditions. Neither anticipating or "predicting". On the other hand there are those that argue the market DOES indeed follow definable patterns and those patterns can be plotted and anticipated with an accuracy sometimes as low as 10 pips.
Personally I believe the market falls somewhere in between these two extremes. Patterns do exist in the market and can be exploited. Unfortunately while the patterns may be generally similar they are not exactly the same, and canNOT be predicted to any degree of accuracy. For this reason I do not like to anticipate, as am invariably wrong.
However, when I see a pattern I believe is generally exploitable I will watch that pattern and respond when I see price begin to move to follow the pattern.
This is a pattern- The EURUSD typically moves down 66% of the time at the Australian open.
Here's an article describing how to take advantage of this pattern
The author uses price action and time to show where the best opportunities are. I've used this strategy day after day and it has been terrific for me to gather a few pips as I'm wrapping up my trading day.
If past market behavior does not equates future market behavior, of what approach should one adopt in trading the market?
Ignored
the funny thing about this statement is that you look at market as a thing. It's actually living, breathing human beings trading that market. Even if the bots that execute the trades, they were programmed by human beings with inherent biases.
People are very predictable...not individuals though. so sometimes you see a market behavior that breaks the market structure norm. But most of the times they are predictable.
If past market behavior does not equates future market behavior, of what approach should one adopt in trading the market?
Ignored
Past market behavior does not necessarily dictate future market behavior, but it does provide insight into where, when, and how market activity/transactions took place, which in turn certainly can and does impact future market behavior.
Hi gaspajon,
I believe the former is the key to long term success, while the latter is a temporary exploit that may not last forever. Take for example the gartley pattern, it used to work 70% of the time, not anymore. The latter is simply a result of discovering some current repeatable behavior,. It may lack adaptability depending on how it is constructed.
