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Technical Analysis alone will not give you an edge

  • #201
  • Nov 4, 2015 2:13pm Nov 4, 2015 2:13pm
Quoting the redlion
Technical Analysis alone will not give you an edge.

I agree.

Because no one aspect of trading will, in itself, give you an edge.

Edges come only with patience, discipline, statistics, probability, education, experience and practice (there are no productive short-cuts).

A lot of beginners start off imagining that all they need to do, to gain an edge, is to copy something that "just works", typically without appreciating that doing that successfully necessarily entails first learning to distinguish accurately between what works and what doesn't. And doing that is no trivial matter at all, partly because (for various reasons - some very obvious but others far from it) the internet, in particular, is full of misinformation about trading. In a field of endeavour from which so very few people ever manage to make a living, it stands to reason, in my view, that the overwhelming majority of the "information" with which one's presented is actually quite likely to be seriously misguided. Which is, of course, one of the many reasons why overall success-rates are so very poor.
  • #202
  • Nov 4, 2015 3:10pm Nov 4, 2015 3:10pm
Guess none of you non-random guys are gonna be trading the randoms any time soon

Thats the R_25, R_50, R_75 and R_100

the 25, 50, 75 and 100 just refers to the volatility of the index.

Below is the R_25 Daily Chart, 60Mins and 15 Mins.

All the data used to produce these indices is generated completely at random.

I've managed to snag the raw data that generates the chart.
Attached File(s)
File Type: xlsx random-25-index.xlsx   13 KB | 319 downloads


These are live charts right now.


Daily R_25 notice 'price' hits the 61.8fib to the pip, the ABCD and the ranging market.

Attached Image (click to enlarge)
Click to Enlarge Name: random25.png Size: 84 KB


60 mins double top, supply and demand zone. etc

Attached Image (click to enlarge)
Click to Enlarge Name: rand60mins.png Size: 66 KB


15mins a trend perhaps, above the 200sma all day.
Attached Image (click to enlarge)
Click to Enlarge Name: r2515mins.png Size: 74 KB
  • #203
  • Nov 4, 2015 3:43pm Nov 4, 2015 3:43pm
Quoting goodfella90
Guess none of you non-random guys are gonna be trading the randoms any time soon Thats the R_25, R_50, R_75 and R_100 the 25, 50, 75 and 100 just refers to the volatility of the index. Below is the R_25 Daily Chart, 60Mins and 15 Mins. All the data used to produce these indices is generated completely at random. I've managed to snag the raw data that generates the chart. {file} These are live charts right now. Daily R_25 notice 'price' hits the 61.8fib to the pip, the ABCD and the ranging market. {image} 60 mins double top, supply and demand zone....

hi , interresting

how can you generate a random chart on tradingview ? thnx
  • #204
  • Nov 4, 2015 3:58pm Nov 4, 2015 3:58pm
Shit just got real
  • #205
  • Nov 4, 2015 5:02pm Nov 4, 2015 5:02pm
Quoting Xela
{quote} I agree. Because no one aspect of trading will, in itself, give you an edge. Edges come only with patience, discipline, statistics, probability, education, experience and practice (there are no productive short-cuts). A lot of beginners start off imagining that all they need to do, to gain an edge, is to copy something that "just works", typically without appreciating that doing that successfully necessarily entails first learning to distinguish accurately between what works and what doesn't. And doing that is no trivial matter at all, partly...
I agree with this 100%. To succeed and make a living in this business one must think outside the box and stop following the herd. New and struggling traders should rethink and question everything that is widely taught in courses and forums otherwise they will just keep getting slaughtered.
I used to dream about the life I'm living now
  • #206
  • Nov 4, 2015 5:14pm Nov 4, 2015 5:14pm
Some food for thought that is relevent to the thread subject.

For those interested, the read is very worthwhile. :-)
  • #207
  • Edited 5:33pm Nov 4, 2015 5:15pm | Edited 5:33pm
Let' s use a little bit of logic here:
Thousands of consistently profitable technical traders beat the market on a regular basis, all over the world. That's a fact!
These traders not only beat the market, they beat the trading cost on top of that, so this means their edge is real and solid(no luck here, or magic). We are talking about track records with thousand of trades over periods of years. There is no way for all these to be just statistical outliers (lucky winners). The probability for this goes into billions to one....(if not trillions to one)
If the price action was random, this would mean that all these profitable traders have found ways to beat random walk.....and we all know that no one can beat random walk(that's a fact)!
So the conclusion is - price action is NOT random, the patterns work, and YES, it is possible to beat the market and to be profitable by using only technical analysis.
The best way to prove this would be for all these profitable traders to try to trade and apply their methods using randomly generated charts( random price data). You want to guess what the result will be? They would not be able to make a dime, even with 0 trading cost(no spread, no commissions)!
  • #208
  • Edited 8:47pm Nov 4, 2015 5:30pm | Edited 8:47pm
Quoting PrymeTyme
{quote} hi , interresting how can you generate a random chart on tradingview ? thnx
Hi there, to be honest i don't know how my broker produces these charts technically, but these are real indices that are live and tradeable,
here's my last trade on the 5 min chart, its a binary broker, so all i needed was for the 'price' to be higher when the option expired 1 hour later.

1. 'price' hit the 61.8 fib
2. 'price' hit support and resistance area
3. abcd completion.
4. oversold on the rsi
5. strong bull candle.

Five reasons for entry, i'd take this trade every day of the week, some win, some lose, in short, its just trading.

Just a reminder that this is a completely randomly generated chart.
(nb. you are purchasing a contract which expires at a certain time/date depending on whether the index will rise or fall, therefore buyers or sellers have no direct impact on how the market moves, it is simply generated from random data.)

Attached Image (click to enlarge)
Click to Enlarge Name: 5MINS.png Size: 110 KB



p.s.
even though the above chart is a real tradeable index (just like the dax, dow, or ftse100, you CAN generate your own random candlestick charts in mt4. If you go to tools/history centre and delete say, EUR/USD (disconnect from internet so it doesn't automatically update), then use excel random number generator to produce open / close /high /low, save the data as a csv file, then import into mt4.


on that subject, heres a cheeky little question for the non-random believers.
Is the chart below the EUR/USD, or the first 5,000 numbers of pi, represented as a candlestick chart.

Attached Image (click to enlarge)
Click to Enlarge Name: EURUSD.ecnH1.png Size: 24 KB
  • #209
  • Nov 4, 2015 8:26pm Nov 4, 2015 8:26pm
Quoting mzvega
From an Auction Market perspective, this is just my opinion about Technical Analysis Auction Markets produce hard information of two sorts: price data (technical) and value data (market generated). Again, this just my opinion Price is a linear, one dimensional variable. Value is a non-linear two dimensional variable (price over time). Profiles convert one-dimensional price data to two-dimensional value (price over time). Price Data: 1. Ticks and transactions reported during the day. 2. End of day "daily summary" of open, high, low, close, volume...
Thanks for this post mzvega. Very informative :-)
  • #210
  • Nov 4, 2015 8:52pm Nov 4, 2015 8:52pm
Sanity has return. Excellent stuff !
  • #211
  • Edited 11:09pm Nov 4, 2015 9:40pm | Edited 11:09pm
Red.....I was just assessing the assumptions of using de-trended data in Hurst's analytical techniques and wondering what possible impacts could hide in those assumptions when specifically talking about trends and came across this article that you might find interesting in shaping your philosophy. Here t'is.
  • #212
  • Nov 5, 2015 12:22am Nov 5, 2015 12:22am
"Thousands of consistently profitable technical traders beat the market on a regular basis, all over the world. That's a fact!"


Really? A fact? Prove it! Show us your data. I'm sure these "thousands" of profitable traders are only too happy to show their results on trade explorer.

Don't make ridiculous claims with no evidence.

The reality is technical analysis doesn't work and there aren't "thousands" of profitable technical traders. Study after study shows just the opposite of your

claim.
  • #213
  • Nov 5, 2015 12:23am Nov 5, 2015 12:23am
Quoting goodfella90
{quote} Hi there, to be honest i don't know how my broker produces these charts technically, but these are real indices that are live and tradeable, here's my last trade on the 5 min chart, its a binary broker, so all i needed was for the 'price' to be higher when the option expired 1 hour later. 1. 'price' hit the 61.8 fib 2. 'price' hit support and resistance area 3. abcd completion. 4. oversold on the rsi 5. strong bull candle. Five reasons for entry, i'd take this trade every day of the week, some win, some lose, in short, its just trading....
Well yeah cool, wait...what? Randomly generated tradeable indices? That's news to me.. Strangest thing i've heard all week.
Extremely interesting and quite genius. Binary options brokers will do anything to avoid regulation and get clients gambling..IMO.
  • #214
  • Nov 5, 2015 3:41am Nov 5, 2015 3:41am
Quoting RBlackburn
{quote} Well yeah cool, wait...what? Randomly generated tradeable indices? That's news to me.. Strangest thing i've heard all week. Extremely interesting and quite genius. Binary options brokers will do anything to avoid regulation and get clients gambling..IMO.
Apparently, gambling with binary options is not enough for some people, so they have to trade them on 100% random data to ensure negative expectation in the long run
  • #215
  • Nov 5, 2015 4:00am Nov 5, 2015 4:00am
Quoting alphaomega
{quote} Apparently, gambling with binary options is not enough for some people, so they have to trade them on 100% random data to ensure negative expectation in the long run

yeah right, as if the binary casinos wont use rigid rngs , just to push the "house edge " a lil more.. those greedy basterds
  • #216
  • Nov 5, 2015 8:07am Nov 5, 2015 8:07am
Quoting Copernicus
Red.....I was just assessing the assumptions of using de-trended data in Hurst's analytical techniques and wondering what possible impacts could hide in those assumptions when specifically talking about trends and came across this article that you might find interesting in shaping your philosophy. Here t'is.
thanks, interesting stuff.
AVT INVENIAM VIAM AVT FACIAM
  • #217
  • Edited 9:58am Nov 5, 2015 9:38am | Edited 9:58am
Quoting alphaomega
Let' s use a little bit of logic here: Thousands of consistently profitable technical traders beat the market on a regular basis, all over the world. That's a fact! These traders not only beat the market, they beat the trading cost on top of that, so this means their edge is real and solid(no luck here, or magic). We are talking about track records with thousand of trades over periods of years. There is no way for all these to be just statistical outliers (lucky winners). The probability for this goes into billions to one....(if not trillions to...

What did you imagine a random chart would look like?

You can use indicators/trading styles on a random chart or a 'real' chart to exactly the same effect. you either win or you lose.

The bottom line is the foreign exchange market is 'a random walk with levy flight' .

Trading has always been and will always be a game of probabilities,

however, it seems that there are still those that believe the fx market has special properties that distinguish it somehow, that there is a special code, that if this secret code can be unlocked then it will be possible to predict the future.

If you have a specific trading setup and back test it 50 times on GBP/USD and it produces 37 winners, does this mean that the next 50 will also produce 37 winners, well no, it could produce 12 winners, 42 winners, or any possible number between 1 and 50, the fact is that in a random market the future is unknown.

I understand that money has a very powerful emotional effect and people can hold very strong beliefs, almost similar to religious beliefs, so i understand it would be futile to expect you to change your view, this would be like an atheist trying to convince a creationist to abandon their beliefs, basically its never gonna happen.

So, i wish you good luck in your search to fathom the mysteries of the fx market, but for those who are a little more pragmatic, i humbly offer this advice
1. understand that you are trading a random walk with levy flight
2. except that the game you are playing is based on probabilites and that the future is uncertain.
3. when price goes against you cut your losses immediately (you have no idea what will happen in a random market)
4. when price goes in your favour, try to hold it for as long as possible.

These four simple rules are in practice extremely difficult to implement and will take thousands of hours of practice, with no guarantee of success. no one ever said trading was easy


So, just for fun lets look at todays action on the Random_25

No trading for me today but i've marked a possible entry on the chart where 'price' hit previous support/resistance, bounced off the 200 sma, and we have a MACD cross, not to mention were clearly in an uptrend.
Lets see if 'price' reacts to the higher previous resistance line drawn on the chart which also happens to be a 'round number.'

Attached Image (click to enlarge)
Click to Enlarge Name: rand15mins.png Size: 81 KB
  • #218
  • Nov 5, 2015 10:52am Nov 5, 2015 10:52am
Thought I'd step in here to be a mitigating factor to the BS that is spreading about the forex being a random market. Today, the calendar of FA clearly showed that the BofE was scheduled to make their announcements on interest rates and monetary policy at 6:00 AM CST. The subsequent PA in GBP crosses, and the predictable patterns that developed during as PA moved, were not random. Same can be said for PA that follows important FA, and the follow on PA as the market adjusts to previous PA, and so on. And like I stated in a previous post, we are not trading random generated charts, we are trading forex charts. TA does not "work" on random charts, because there is no underlying structure that the TA is measuring. Good trading everyone (to to those who trade randomness, good luck).
  • #219
  • Nov 5, 2015 11:08am Nov 5, 2015 11:08am
Quoting Xela
{quote} Edges come only with patience, discipline, statistics, probability, education, experience and practice (there are no productive short-cuts).

^^^^
Attached Image
Learn, a forex trader must, unlearn and relearn he will.
  • #220
  • Nov 5, 2015 11:38am Nov 5, 2015 11:38am
Quoting GEfx
Thought I'd step in here to be a mitigating factor to the BS that is spreading about the forex being a random market. Today, the calendar of FA clearly showed that the BofE was scheduled to make their announcements on interest rates and monetary policy at 6:00 AM CST. The subsequent PA in GBP crosses, and the predictable patterns that developed during as PA moved, were not random. Same can be said for PA that follows important FA, and the follow on PA as the market adjusts to previous PA, and so on. And like I stated in a previous post, we are not...
you claim future is predictable and to support this all you can come up with is historic event? Incredible!
As Above, So Below
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