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Price action is dumb, and you're lazy for thinking otherwise

  • #61
  • Jul 25, 2011 6:54pm Jul 25, 2011 6:54pm
Quoting newyear498
wait what!?! DS, I am kinda in shock you attribute pin bars specifically to stop hunting..

I would imagine there are several different situations that result in a pin bar and not simply stop hunting
Of course they can occur for other reasons. They also frequently fail.

My point was that they work >50% of the time because there are inherent reasons for them to do so. The OP was saying that pin bars only work if/when pin bar traders see and trade them. I disagree with him and presented my logic as to why.

As a side note, I don't trade pin bars myself and could care less why/how other people think they work. My sole purpose here was to poke holes in the OPs blatently confrontational and ill informed assertions...
  • #62
  • Jul 25, 2011 6:54pm Jul 25, 2011 6:54pm
Quoting supremeChaos
why? & why not?

maybe u meant "it means nothing for ME"....
"arbitrary for ME"

based on your provocative thread title, & (some of) your posts, u seem to have categorized trading in to 2 things: what works for you, & those that dont work for you (which u describe as 'ridiculous', 'means nothing', 'arbitrary' ,etc)


not about ego? are u sure? ok.
just curious, or wanna discuss? which really is it?
So, why not have a thread title like "Do u really know how your method/system works? just yes or no"?

Are u 100% sure? why are...
I have been asking why... Why does TA work? And all I get back are

1.) You dont need to know everything to trade
2.) It works because it works, so who cares

So no, this is not about my ego, I really am not too worried about being validated here. I was just hoping someone could tell me if there is any logic behind TA or "it just works because it works"

Because I have done my fair share of research on the topic, designed TA systems, tried to break them down, went behind the coding and figured out what they did...

And I did not like what I saw at all.

And no its not "what works for ME", its about what works. Anything that works for one person should work for another. As long as the idea behind it all is rooted in logic.

And you sound a little offended... don't be... I am just here to get a nice intelligent conversation going with some people

Sorry you don't want to stay for a little ping pong, fun game

Thanks for checking it out though

oh yeah! the title... Just me kidding around, dont take it too seriously
  • #63
  • Jul 25, 2011 6:57pm Jul 25, 2011 6:57pm
Quoting newyear498
I have no idea how momentum & logarithms are connected.. google is dry any references? I'd PM you but your line is busy :/
The curves look similar, is how I take it. It's not a math thing.
Just substitute the word momentum, if I ever post 'logarithm'.

Also, I usually draw momentum with Gann Fans, at least when I suspect the momentum will dry up. They're notorious for moving on the screen, as well as other reasons perhaps.
When their lines both align with trendlines really well and all of a Gann Fan's lines are used extensively, though, momentum is fairly clear.
  • #64
  • Jul 25, 2011 6:59pm Jul 25, 2011 6:59pm
Quoting Darkstar
Of course they can occur for other reasons. They also frequently fail.

My point was that they work >50% of the time because there are inherent reasons for them to do so. The OP was saying that pin bars only work if/when pin bar traders see and trade them. I disagree with him and presented my logic as to why.

As a side note, I don't trade pin bars myself and could care less why/how other people think they work. My sole purpose here was to poke holes in the OPs blatently confrontational and ill informed assertions...
i think you will find you are actually confirming precisely what the OP is saying with this thread. you mention "inherent reasons", and this is the language that most people don't have when they make a trade decision. pin bars don't work when they happen to be the normal gyrations of the market, but when you include an "inherent reason" then you are starting to answer the WHY.

so... i think you are not opposed to the OP, but instead are perfectly aligned with the OP.
Congratulations ScalaFX for coming out of the closet!
  • #65
  • Jul 25, 2011 7:02pm Jul 25, 2011 7:02pm
Quoting ha-pattern
The curves look similar, is how I take it. It's not a math thing.
Just substitute the word momentum, if I ever post 'logarithm'.

Also, I usually draw momentum with Gann Fans, at least when I suspect the momentum will dry up. They're notorious for moving on the screen, as well as other reasons perhaps.
When their lines both align with trendlines really well and all of a Gann Fan's lines are used extensively, though, momentum is fairly clear.
bloody hell, after all of that couldn't you just eyeball the chart to see instead of using magic crystals mixed with the blood of a cursed monkeys paw?
Congratulations ScalaFX for coming out of the closet!
  • #66
  • Jul 25, 2011 7:05pm Jul 25, 2011 7:05pm
Quoting ha-pattern
Yeah, "unconscious subpatterns of human nature" is a really bloated phrase I couldn't prove in a million years. Perhaps different symbols can offer a little differentiation toward such an effort.
All I meant was, the chart repeats certain subpatterns over and over again, from the certainty of microstructure (Darkstar said that) bars have.

on logic:
Well, each drawing device needs logic to be used, such as price rolls within a channel and often stops at a midpoint between the channel's sides.
I just find it too unreal to not base a study...
Referring to what you said about midpoints/bars:

Yes this can happen quite frequently. However the sad fact of the matter is that something that happens even as little as 45% of the time can look like an exploitable event, when inherently you usually have about a 50% chance your trade will go in your favor (price can either go up or down)

I think most technical analysis falls in around a 60ish% success rate, and depends heavily on trying to pull out a higher R:R ratio.

But with a success rate anywhere around 50% you might as well be throwing darts at a dart board.

I play a lot of poker, love the game... and I see things happen all the time that shouldnt. 1.5% bad beats, 1 out coming down on the river... And as people get felted, lose all their chips, and walk away they mumble things like "This always happens to me"

Well, if people think that 1.5% happens all the time, what do you think 50% or hell 60ish% looks like in our mind??? Remember our mind wants to see patterns, because we are looking for them.

Which is why I stress how important it is to have a method that you can explain, because when it fails, and 6 or 7 trades go against you, I want to be able to confidently say "it is fine, I know that my system works, and here is why"...

So why do bars/channels/other forms of TA give someone an edge?
  • #67
  • Edited 7:18pm Jul 25, 2011 7:07pm | Edited 7:18pm
The reason most don't ask why as you've been putting it..

my theory on this has been, that those not asking why want there system to work.. and to make it big.. and lots of money and success.. to question why posses a possibility of crushing their dream..

I did a similar thing a few weeks ago..

I had a pretty kick ass theory and wrote a bot to test said theory.. but I put off writing this bot for a few weeks and when I did write it and clicked the button I felt like my heart was stopping because I wanted it to work out so bad.. in the end the results were poor.. I was disappointed.. but at least I never traded the theory.. many will find out the hard way tho...
  • #68
  • Jul 25, 2011 7:09pm Jul 25, 2011 7:09pm
Quoting Darkstar
Of course they can occur for other reasons. They also frequently fail.

My point was that they work >50% of the time because there are inherent reasons for them to do so. The OP was saying that pin bars only work if/when pin bar traders see and trade them. I disagree with him and presented my logic as to why.

As a side note, I don't trade pin bars myself and could care less why/how other people think they work. My sole purpose here was to poke holes in the OPs blatently confrontational and ill informed assertions...
Ok I took you too literal my fault
  • #69
  • Jul 25, 2011 7:16pm Jul 25, 2011 7:16pm
Seriously, could you be any funnier if you tried LOL

Quoting nubcake
bloody hell, after all of that couldn't you just eyeball the chart to see instead of using magic crystals mixed with the blood of a cursed monkeys paw?
on an intellectual note I'd say that right there is the definition of what price action traders do compared to the indicator users
  • #70
  • Jul 25, 2011 7:16pm Jul 25, 2011 7:16pm
Quoting Darkstar
Of course they can occur for other reasons. They also frequently fail.

My point was that they work >50% of the time because there are inherent reasons for them to do so. The OP was saying that pin bars only work if/when pin bar traders see and trade them. I disagree with him and presented my logic as to why.

As a side note, I don't trade pin bars myself and could care less why/how other people think they work. My sole purpose here was to poke holes in the OPs blatently confrontational and ill informed assertions...
Not trying to be confrontational, but I feel like I will have to keep reminding people this...

They work maybe a tad bit over 50% of the time just because prices can go either up or down.

And no I wasn't saying they will ONLY work when Pin bar traders see pin bars and act on them. What I said was

"As for the pin bars... They mean literally nothing. They would mean something if every market participant was staring at the same chart at the same time and we made all our decisions on the spot, but that is not how it works. "

And all I was trying to get off there was that a pin bar is just a collection of price data over a given session of time that closed on its open, had a price move in one direction, but the price move retrace completely back to the open.. That does not mean that there are buyers in the market that are going to push price any higher... They just HAVE to occur in one time frame or another at market tops. People assign them the added value that they have received in the trading world..

Trends are fractal, you break the trend down into a couple time frames and you will see tons and tons of pin bars all the way up the trends, ignore them, then see the one at the top and think to yourself

AHA, see! Pin bar, it called the top..

Our mind isnt programmed to see the false signals, because we don't want to see the false signals..

Why I am here is to discuss, and determine if people base their methods in any sort of logic at all...

Calling out price action was just a way to get people's attention...
  • #71
  • Jul 25, 2011 7:17pm Jul 25, 2011 7:17pm
ahhh, these days, i dont get to play sports/music. so i prefer the real ping-pong

it really seems u are a logical guy.
Quoting superdezign
...
And no its not "what works for ME", its about what works. Anything that works for one person should work for another. As long as the idea behind it all is rooted in logic.
...
problem is, most people think using emotions rather than logic. that is human nature.
so, anything that works for one person does not always work for another.
why do u think we are all unique?
  • #72
  • Jul 25, 2011 7:20pm Jul 25, 2011 7:20pm
Quoting superdezign
Referring to what you said about midpoints/bars:

Yes this can happen quite frequently. However the sad fact of the matter is that something that happens even as little as 45% of the time can look like an exploitable event, when inherently you usually have about a 50% chance your trade will go in your favor (price can either go up or down)
...
So why do bars/channels/other forms of TA give someone an edge?
On bars, asked and answered by someone else earlier.
On channels etc.:
Because of the "inherent reason" another'd spoken of a few posts ago; it builds upward into drawing as well as downward to a single bar. TA such as mine has to reflect this or I lose the trade, or at least end up wastefully chasing %s as you noted.



Nubcake,

If each drawing device on the list is applied carefully and logically, and lots of examples reasonably show the subpatterns work (until proven otherwise, hey it could happen), then their being built upon reading bars is a fair thing to do.
I've been through lots of combinations of indicators, traditional patterns and such to figure none of them work with enough certainty to reflect the chart as much as "inherent reason"ing of bars does.

Only, bars can get confusing or tiring when there's too many of them -- and I value having too many of them, for accuracy's sake -- and so building a temporary string of logic with drawing devices (of which, in their setness, the subpatterns could be included in a way) and temporary patterns that work at the time seems to only way to go.

Natural, maybe -- Not magic.
  • #73
  • Jul 25, 2011 7:21pm Jul 25, 2011 7:21pm
Quoting newyear498
The reason most don't ask why as you've been putting it..

my theory on this has been, that those not asking why want there system to work.. and to make it big.. and lots of money and success.. to question why posses a possibility of crushing their dream..

I did a similar thing a few weeks ago..

I had a pretty kick ass theory and wrote a bot to test said theory.. but I put off writing this bot for a few weeks and when I did write it and clicked the button I felt like my heart was stopping because I wanted it to work out so bad.....
Thanks newyear

It's great to see someone understands where I am coming from...

I just want to know how many people negate to look past the lines on their charts and have gone to ask themselves why am I doing this?

Not just "oh it works because it works"

Think outside the box!
  • #74
  • Jul 25, 2011 7:27pm Jul 25, 2011 7:27pm
Quoting supremeChaos
ahhh, these days, i dont get to play sports/music. so i prefer the real ping-pong

it really seems u are a logical guy.

problem is, most people think using emotions rather than logic. that is human nature.
so, anything that works for one person does not always work for another.
why do u think we are all unique?
Because we grew up learning from different stimuli from varying environments...

thats another story though..

Point: 1+1 = 2 no matter who is holding the calculator.

If a trading methodology works for one person and does not work for the other that is just luck

luck: where preparation meets opportunity
  • #75
  • Jul 25, 2011 7:30pm Jul 25, 2011 7:30pm
Quoting ha-pattern
Natural, maybe -- Not magic.
there's nothing natural about plotting gann this or that. does microsoft wait for a bunch of random indicators to align before converting one currency to another? do people defending or attacking options care what fib number the price aligns to if you set the timeframe to 4hrs and draw from the 3rd quarter of the engulfing bars wick?

you give the impression that you are adding layer upon layer of stuff hoping that all of the probabilities of each individual element will combine to form a super-probability that will generate positive expectancy. in reality that's just adding layers of randomness on top of each other and has nothing natural about it. or perhaps you are simply adding layers of complexity to create more and more reasons to simply not be in the market, not to create positive expectancy but to remove the negative expectancy of trading.
Congratulations ScalaFX for coming out of the closet!
  • #76
  • Jul 25, 2011 7:30pm Jul 25, 2011 7:30pm
Quoting supremeChaos
problem is, most people think using emotions rather than logic. that is human nature.
I'd say the market movers as well trade off more emotion than logic themselves.. but that's just my interpretation..

this blends into the ability to trade the markets emotions logically?
  • #77
  • Jul 25, 2011 7:32pm Jul 25, 2011 7:32pm
Quoting superdezign
.

I just want to know how many people negate to look past the lines on their charts
or look past there chart in general, not that I'm not guilty of negating fundamentals myself.. :/
  • #78
  • Jul 25, 2011 7:40pm Jul 25, 2011 7:40pm
Quoting nubcake
there's nothing natural about plotting gann this or that. does microsoft wait for a bunch of random indicators to align before converting one currency to another? do people defending or attacking options care what fib number the price aligns to if you set the timeframe to 4hrs and draw from the 3rd quarter of the engulfing bars wick?

you give the impression that you are adding layer upon layer of stuff hoping that all of the probabilities of each individual element will combine to form a super-probability that will generate positive expectancy....
That's a heck of a lot of mistrust.
If a TL or Gann Fan aligns with most of the chart exactly, there's only, fairly high % that the device used will work.
  • #79
  • Jul 25, 2011 7:42pm Jul 25, 2011 7:42pm
Quoting superdezign
“Why is a theory never right? Because we can never know if all the swans are white” - Nassim Nicholas Taleb Fooled by Randomness
Excellent book, agreed. But it's enough for me to know that majority of swans is white; the rest is risk management.

Quoting superdezign
I can tell you exactly why the way I trade is the way I trade. I can tell you why it works, the principals it is based off of, and why it will remain robust. Every move I make is based in logic.
I don't want you to disclose anything about your system, but just one question: Is your approach systematic? i.e. are all the pieces of your decision framework objective and quantified? If there's ANY discretion involved (including judgement of fundamentals), and if yes, how do you logically (and objectively) reason that subjective part? Upon consistency of own psychological factors? That would still be subjective, or not?

If not, then you have a mechanical system and all you need to know is solid statistical proof and performance monitoring. If yes, then any discussion about it is rather about semantics since no discretionary trader can lay down precisely (transfer 100% of data to anyone else) why he took this trade and not that one.

Many thanks for the answer.

PS. did you read "Evidence Based Technical Analysis" by David Aronson (really not affilated) - its a good book yet easy to understand - about differences between subjective TA and objective TA?
MarginTrader All Time Return: na
  • #80
  • Jul 25, 2011 7:44pm Jul 25, 2011 7:44pm
Quoting nubcake
there's nothing natural about plotting gann this or that. does microsoft wait for a bunch of random indicators to align before converting one currency to another? do people defending or attacking options care what fib number the price aligns to if you set the timeframe to 4hrs and draw from the 3rd quarter of the engulfing bars wick?

you give the impression that you are adding layer upon layer of stuff hoping that all of the probabilities of each individual element will combine to form a super-probability that will generate positive expectancy....
I think nubcake gets it too..

There two driving factors in a market that a trader should be concerned about... The supply and demand of a given (insert whatever you trade here)

That supply and demand is based off of different factors that drive the market to react in certain ways...

If someone held a gun to your head and he said give me $5 or ill shoot, 99.9% of the time (basically as long as you are sane) you would give him the five dollars. We all work off incentives and stimulus..

I am not saying that there is not logic rooted deeply in TA, but I want to know if anyone knows what they are doing on a dissected level...

Anyone?
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