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

  • #381
  • Jul 31, 2011 5:52pm Jul 31, 2011 5:52pm
Quoting superdezign
The flaw seems to sit on the fact that there is no way to identify if that luck attributed to that success, and therefore it is hard to be confident that it will continue to work in the future.

I am not trying to say that some technical systems can not have some sort of logic rooted in them, however, some do not but can work for a given period of time.

Breaking down the systems and assigning some sort of logic to them is a way to differentiate the two.
I think we can probably agree that too many traders just throw indicators at their MT4 terminal, and try to see what sticks. Though that approach might sometimes work, its logic is [at the very least] problematic. But this is certainly not all traders here!
If you recognized a pattern of continuation, for example, in the past, you measure its attributes using technical indicators, and conclude that it has a statistically-significant probability of success, that's enough logic for me. In fact, statistical significance is exactly what allows me to rule out luck. When you say "there is no way to identify", you are ignoring the whole science of statistics.

By the way, did you backtest your own system? Did you forward-test it, either live or in demo/paper mode? Let's assume that you did, and that it was successful. I am now going to turn back your own question back to you:
how can you be confident that it will continue to work in the future?
I appreciate that "logic" may be one part of your answer, but since markets are not logical, is it "logic" that ultimately gives you that confidence - or is it those back-/forward-tests?
  • #382
  • Jul 31, 2011 6:14pm Jul 31, 2011 6:14pm
Quoting 6pack
I think we can probably agree that too many traders just throw indicators at their MT4 terminal, and try to see what sticks. Though that approach might sometimes work, its logic is [at the very least] problematic. But this is certainly not all traders here!
If you recognized a pattern of continuation, for example, in the past, you measure its attributes using technical indicators, and conclude that it has a statistically-significant probability of success, that's enough logic for me. In fact, statistical significance is exactly what allows...
The science of statistics also states certain tests should hold different/lower levels of significance.

I'm sure there are correlations that tie traffic patterns in Austria to stock prices in Brazil's stock exchange. Does that mean they are related, would you trade that correlation?

And yes my method has been tested, and markets (people) are irrational not necessarily illogical. I can be confident that my method will continue to work for as long as markets exist because of that fact that what I have designed is rooted in certain principals that are essentially irrefutable AKA logic.

The focus of this thread was suppose to be to answer:
1.) Are people aware of what sort of logic backs up their trading
2.) Is there any logic/principal that can support PA/TA
3.) Does the answer to number 2 (whatever is may be) really give a trader an edge?
  • #383
  • Jul 31, 2011 7:16pm Jul 31, 2011 7:16pm
@superdezign,

 

  1. "Using price action as a method of entry/exit is ridiculous"
  2. "Technical analysis falls under the same category of invalidated trading"
  3. "Price movements are random" (post #193)

No offense, but you've made at least three statements that are both provocative and false, using a patronizing, know-it-all tone.

Predictably, the indignant responses you've been getting reflect all of this.

It sounds like you want to debunk TA (what the heck is "price action", if not a subset of TA?) by trying to convince everybody that indicators, lines, levels, etc are random and have no basis, but the fact is that traders use these very same tools (among others) to turn a profit.

Even if Darkstar and others disagree with me, it's my experience that price behaves very differently around certain key levels, than it does 'normally'. For a purely technical trader, the WHY is unimportant; it's merely a case of wrapping a suitable entry/exit system around a previously proven pattern, and then milking it repeatedly and consistently, albeit on the basis of probability, for profit. (Having said that, knowing the WHY might understandably add confidence to one's decision-making...... especially if one's trading is more discretionary in its nature).

As an example, I'm currently in two free trades, shorts that I opened earlier this morning (NZ time) based on the proven idea that "weekend gaps" tend to close themselves, more often than not. Not knowing exactly why this phenomenon occurs hasn't stopped me from profiting from it.

Any trader who uses price charts in his analysis clearly subscribes to TA being useful in some way, and also implicitly agrees that recent behavior DOES have some bearing on imminent outcome. All forms of analysis are predicated on the assumption that aspects of past behavior - if correctly interpreted - are more likely, than not, to repeat themselves, in the future. Otherwise analysis would be futile.

  • #384
  • Jul 31, 2011 7:29pm Jul 31, 2011 7:29pm
Quoting superdezign
And yes my method has been tested, and markets (people) are irrational not necessarily illogical. I can be confident that my method will continue to work for as long as markets exist because of that fact that what I have designed is rooted in certain principals that are essentially irrefutable AKA logic.
Well, no wonder you come across as arrogant!!...when it is really just you being proud of designing a system that will never, ever fail. You should be proud!!

As this sytem will certainly put you on the Forbes list of the richest people in the US in short time, I just want to say it has been a priviledge to have disagreed with someone of your caliber on so many points.

I know, I know........
Quoting superdezign
Sarcasm, really classy.
Lighten up, guy. So what if people can't explain to your liking why their system works? Heck, all you've done is say that your method works because it's logical....not a whole lot of specifics there!!

No offense intended, just trying to lighten the mood....I will kill myself if you deem it necessary, though.....
  • #385
  • Jul 31, 2011 7:47pm Jul 31, 2011 7:47pm
Quoting superdezign
The science of statistics also states certain tests should hold different/lower levels of significance.

I'm sure there are correlations that tie traffic patterns in Austria to stock prices in Brazil's stock exchange. Does that mean they are related, would you trade that correlation?
I am not sure I understand what you're talking about: I am suggesting properly using statistics to evaluate trading systems, not coercing or even raping the theory to do some whacky pseudoscience.

Quoting superdezign
And yes my method has been tested, and markets (people) are irrational not necessarily illogical. I can be confident that my method will continue to work for as long as markets exist because of that fact that what I have designed is rooted in certain principals that are essentially irrefutable AKA logic.

The focus of this thread was suppose to be to answer:
1.) Are people aware of what sort of logic backs up their trading
2.) Is there any logic/principal that can support PA/TA
3.) Does the answer to number 2 (whatever is may be) really give...
I have to say now I am intrigued. For me, an irrefutable principle is "buy low, sell high." But just like you insinuate, does that really give trader an edge?

I am not the biggest proponent of Efficient Market Theory, but I still find it somewhat hard to believe that any "irrefutable principle" can give a trader an edge over his or her peers.

By the way, I would be careful with the whole "logic" business. All too often, people who cannot properly explain their reasoning simply use "codename logic." Here are some relevant quotes I've picked up:

Logic: The art of thinking and reasoning in strict accordance with the limitations and incapacities of the human misunderstanding.
Ambrose Bierce

Logic! Good gracious! What rubbish!
E. M. Forster

Cheers,
6p
  • #386
  • Jul 31, 2011 7:52pm Jul 31, 2011 7:52pm
The usdcad is under accumulation since the long 4hr candle on Friday. That up move had too much participation by retail traders and are being shaken out of their longs. The market makers had to take the other side of the retail trades on the up move since, this is the job of a market maker. When there is no other retailer to take the other side of the retail trade, the market maker must take the other side. they cannot continue to let price rise and lose money. Yes, sometimes market forces dictate that they must but not very often enough for one to bet against them.


Market motion has everything to do with the law of forces. Market terminology in just a way to identify the operations of the forces at work.

The 4hr is telling the story. Though this pair looks like it's falling the big fellas are buying up the positions that the retailers are selling.

Retailers jumped the move around 0.9496 and their stops are going to be just below this level. So, 20 pips below where they got in should be about right. 20 pips is a favorite retail stop number. The powers are very familiar with that fact.

Look for the up move to resume around 0.9475. The pair will test 0.9598 before it will test 0.9438

Look to enter long anywhere in the 0.9475- 90 area...
  • #387
  • Jul 31, 2011 8:24pm Jul 31, 2011 8:24pm
No surprise here...ever so often a new "guru" appears on the forum, spouting about their secret method they won't share.

So lets do a quick check of the scam list:-
1.) The misleading Thread Label designed to draw attention (almost as bad as "Holy Grail").
2.) The sly hints that he is a successful trader with high hit rates
3.) Lots of talk, with generally a circular logic, no substance to his "views" and often contradictory to previous position
4.) The website in his profile that turns out to be his generic blog that link to a promotion on another sitehttp://www.forexfactory.com/images/editor/menupop.gif

Was a bit surprised about the persons who vouched him, but I guess it been known to happen before.

If one is successful as he implies why engage in an inane conversation on a forum. It gives me such a warm a fuzzy feeling that he cares so much about us that and wishes to lead us to the path of enlightenment with his though provoking statements ... ....

Threads he has started

1.) Price action is dumb, and you're lazy for thinking otherwise
2.) Averaging Down Is for Losers, but...
3.) This is why Im hot!
4.) The Ultimate Fallacy in Technical Analysis
5.) Question Is tradestation the only one?
6.) Exclamation The Vulnerablility of TS failure
7.) The Road to Riches: Giving Up
8.) The Only Thing You Should Try and Pick is Your Nose


Can you draw on the trendline on those?


Peace
Cyp
  • #388
  • Jul 31, 2011 8:44pm Jul 31, 2011 8:44pm
typical replies are typical...

"oh, you aren't profitable. you have nothing of worth to this forum"

"oh, you claim to be profitable. prove to us and describe your system. what's that? you won't share your hard work with everyone? liar liar scam scam burn him burn him"

you spin me right round baby right round. like a record baby right round round round.
Congratulations ScalaFX for coming out of the closet!
  • #389
  • Aug 1, 2011 6:11am Aug 1, 2011 6:11am
Quoting nubcake
typical replies are typical...

"oh, you aren't profitable. you have nothing of worth to this forum"

"oh, you claim to be profitable. prove to us and describe your system. what's that? you won't share your hard work with everyone? liar liar scam scam burn him burn him"

you spin me right round baby right round. like a record baby right round round round.
  • #390
  • Aug 1, 2011 10:44am Aug 1, 2011 10:44am
Quoting Lucky Duke
Anyone who didn't see the markets force GWB's hand on TARP wasn't paying attention. And now, we sit at the next punishment phase for political folly.

What's your MACD telling you?


Monday August 1st. The market has spoken.

I hope some of you made money off of this.

I rest my case.

Goodbye
  • #391
  • Aug 1, 2011 11:26am Aug 1, 2011 11:26am
Actually, I have something to add.

There was a 19 year old trader here fiercely defending some scammer's method who called me an "unlucky fuck". My suggestion to you is lose the ego and emotional baggage. There is a lot to learn if you want to become a good trader. I know you just opened a micro account and wish you the best of luck going live.

Never judge someone's knowledge by their post count on Forex Factory.

Secondly, price order flow trading wasn't "created" by anyone around here, least of all your guru.

Algorithmic trading exploits the same inefficiencies of market microstructures that tape reading did 100 years ago. The only thing that's changed is the processing speed of the auction.

Lastly, you are trading OTC Derivatives. So plotting the DOM, ICE, CME, IFR, correlating spot, swaps, forwards, with applicable ROM instruments, you are going to have wide blind spots.

If by 14 if you don't learn that running down the street naked with your underwear on your head is a bad idea, then no one's going to waste time telling you later.


Luck is what you do with it.




http://www.forexfactory.com/showthre...50#post4814150
  • #392
  • Aug 1, 2011 11:42am Aug 1, 2011 11:42am
Quoting Lucky Duke
Actually, I have something to add.

There was a 19 year old trader here fiercely defending some scammer's method who called me an "unlucky fuck". My suggestion to you is lose the ego and emotional baggage. There is a lot to learn if you want to become a good trader. I know you just opened a micro account and wish you the best of luck going live.

Never judge someone's knowledge by their post count on Forex Factory.

Secondly, price order flow trading wasn't "created" by anyone around here, least of all your guru.

Algorithmic trading exploits...
Darkstar shouldn't have called his trading style Order Flow since the term was already used by that time and had a different meaning. Hence the confusion and misunderstanding.
  • #393
  • Aug 1, 2011 11:46am Aug 1, 2011 11:46am
Hi Lucky Duke, everything you said is so true. And I'm just glad I learned before I was 14 that running down the street naked with my underwear on my head was not a good idea! I've learned so much from this forum, its amazing. Most of what I've learned is what NOT to do in trading. My favorite trading setup is to look for a candle to "Close" above the last swing high or "Close" lower than the last swing low along with a 50 SMA and a DEMA indicator, and look for divergence before the Closed candle appears. Its the easiest trading setup of all, especially on the H1 chart. It works!
  • #394
  • Aug 1, 2011 11:49am Aug 1, 2011 11:49am
Quoting seagreen
Darkstar shouldn't have called his trading style Order Flow since the term was already used by that time and had a different meaning. Hence the confusion and misunderstanding.
OK, my trades are closed for the day, so I have a bit of time.


I'm not closed minded. I just rely on proof of concept like any reasonable person would.


What is it that he created that's different?
  • #395
  • Aug 1, 2011 12:00pm Aug 1, 2011 12:00pm
Quoting Lucky Duke
ok, my trades are closed for the day, so I have a bit of time.

what is it that he created that's different?

I'm not closed minded. I just rely on proof of concept like any reasonable person would.
As per his own words he simply extrapolated the techniques used by J. Livermore into the FX market. You don't need DOM, ICE and stuff to do that. I dont think he was the first to trade this way in fx but he was the first to explain it in public forum.
  • #396
  • Aug 1, 2011 12:46pm Aug 1, 2011 12:46pm
Quoting seagreen
As per his own words he simply extrapolated the techniques used by J. Livermore into the FX market. You don't need DOM, ICE and stuff to do that. I dont think he was the first to trade this way in fx but he was the first to explain it in public forum.
He was the first to explain what exactly?

J Livermore extrapolated? I don't understand what that means.
  • #397
  • Aug 1, 2011 12:53pm Aug 1, 2011 12:53pm
Quoting Cypr3ss
No surprise here...ever so often a new "guru" appears on the forum, spouting about their secret method they won't share...

If one is successful as he implies why engage in an inane conversation on a forum. It gives me such a warm a fuzzy feeling that he cares so much about us that and wishes to lead us to the path of enlightenment with his though provoking statements ... ....

Threads he has started...

Can you draw on the trendline on those?

Peace
Cyp
Quality
  • #398
  • Aug 1, 2011 12:58pm Aug 1, 2011 12:58pm
Quoting Lucky Duke
He was the first to explain what exactly?

J Livermore extrapolated? I don't understand what that means.
With your attitude you wont, even if old Livermore paid a visit himself.

P.S: Please people stop feeding.
.
  • #399
  • Aug 1, 2011 1:00pm Aug 1, 2011 1:00pm
Quoting Lucky Duke
He was the first to explain what exactly?

J Livermore extrapolated? I don't understand what that means.
http://www.merriam-webster.com/dictionary/extrapolate
  • #400
  • Aug 1, 2011 1:03pm Aug 1, 2011 1:03pm
Quoting bbakker
Quality

Give the OP a chance. so far he hasn't contributed any intelligent commentary, but sometimes people need to cast a long line for a big fish.

If the OP has something of value to add, this is probably the time to show at least that he's operating in good faith. Otherwise I would agree he's taking the piss.

But give him a chance to prove his worth here.
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