TA-regularly irregular or irregularly regualr

hi everyone,

the question is not who is right! Albert Einstien said that nothing is absolute , everything is relative!
A very important aspect here is that TA if divided into two parts i.e. indicator based trading and structure based trading.And not only my experience , but you all guys would agree that whatever indicator you use , whatever modifications, or combinations, they often get for you a loss! Very simple reason for e.g. weekly MACD and momentum signals a BUY for GOLd ,but after a week we may here that crude oil line is disrupted or likelyhood of war or whatever, the market immediately reverses or takes pause. ?????So, indicators cant tell you right.
Now, the fundamental news is know to few of the Big fishes like Goldman sachs ect, and they start acting according to it to profit huge from guys using TA indicators!!!!!

But, structural patterns in TA tell us a different story that yes! something is going to happen very bad or good Not all the time , but ya many a times.
TA of structural market is really worth and it has it's own set of rules like any game. Study Gleen nely's MEW, elliot wave , pattern analysis. This will rally help you.

Now wht happens is that there are big fishes to very small fishes in very market. These Big fishes are so powerful that they can maipulate the fundamental news, or whtever! Ultimately over a period of time Big fishes eat small ones and they are winners! So the thing is to be with them and not against them! But how???? TA of market structure and not indicators! and self reliance.

Now all together any market in a short term or long term is a GAMBLING cauz Big players will fool you by false news, false market movements!!!
So, if you handle your every trade mathematically only you should profit. Learn the % success of ur method, wht % of ur capital you should risk every trade and i mean statistical approach.

Other thing is that 70% of time markets are in consolidation in any time frame and only abt 30% of times impulsive i.e. either very up or very down.
And wht happens is that all small fishes get in and out during consolidation. They take profits quick or let ride loss during impulsive movement.

So, neither FA or TA can really build ur capital, but it is how you handle this GAMBLING GAME of INVESTING.
Wht i mean to say is that wether a longterm or short term investor, we all are gamblers, so please plz plz give a statistical and mathematical approach to ur money, or else do hard work and earn money!

Thanxs

Hi Nice one. But just noticed something you wrote. That if a war breaks out and crude oil line get disrupted. Yes u are right immediately an indicator wont tell us but thats why we will have S/L in place.

But, structural patterns in TA tell us a different story that yes! something is going to happen very bad or good- Do you mean to suggest that structural patterns were already able to tell us that a war will happen. Wont even an entry based on structual pattern back fire if something as bizzare as a war starts.

Pls do not take it as a criticism, I am just trying to understand. I am new so maybe I am wrong or I have not followed what u are trying to explain here.

rgds

rahul

hi rahul,
Sudden events like natural calamities are not known by big-players and anyone! right! so in that case structural patterns go wrong. But, events like war, crude oil, interest rates are well planned and not visible to small investors like us. But may be to some insiders and Big fishes. So they create waves in market and these waves are many of the times visible as structural patterns.

Also if you go to see historically , great analysts and market men did not used computers! today all of us are using softwares for buy and sell signals. So, it is quite easy for market makers, specialist and institutional traders to manipulate the market!!!

And for your answer structural analysis tell us the foresight of Big players and the fear and gread of small players. Good or Bad movement may be in place.
It is good of you asking whether a St. pattern could tell us a war, but see the probabilities! wars are very rare may be much less then 1% event. So , St. patterns forewarning it is much much much less then 1%!!! However, minor events could be foretold by structural patterns.
Again not only events, but sentiments also cauz structural patterns- so you get to know wht's up in markets with more accuracy then indicators.

Hi winstonn

Structral Analysis... mmm... I like the word. Please do elaborate a bit on this for us novices.

regards

Karthik

Hi wins,
U wrote good and write. there is always a world between "micro" and "macro", every one has choice in btwn, but they have to figure out what is best suited to them. I do not care what major world is doing or what is going inside my body-- just look for the right thing. and in ur post u wrote one line which is basis of one of my trading strategy--the option writting. Because market remains more in consolidation than impulsive. Learn to write out of money option , after 15th or 16th of every settelment months.
thanx and welcome.

hi all u there,
thanxs for your response!!!

Well, structural patterns are like broadly divided into classic patterns and Elliot wave or Gleen Nely's MEW.Classic patterns are based on Dow theory. They include reversal patterns, continuation patterns and upternds / downtrends. Now classic patterns are know to many are their success rate ranges from 60 to 70% . But if properly interpretated Glen neely's MEW is almost right! but it is very difficult to understand and people dont take pain to do it.All they want is simple buy signals from indicators! my dear friends money is LAXMI and it does not come easily!

Now classic patterns like traingles, rectangles, wedges, pennants, flags, cup and saucer, islands are all powerful. But, people get in before the pattern completes. The rule is let the pattern complete, let the breakout happen and a pullback or throwback, then only one must act on the patterns for high probablr trades. Eg, if there is a break upside from rectangle, let the market have pullback till support line and then move again higher. This entry is a high probable trade as it would save us from false breakouts.

But, if you really master MEW, you would really gain monetary benefits.

And above all, when you trade, we all dont know wht direction market will move. this triggers our emotion and and emotional fool is really fooled by big-players.
Keep your stop-loss tights, and profits loose. However, when we trade or invest , we all become a part of the crowd. And you know an individual loses his wisdom in crowd. Wont you behave like everyone in your friend circle. It is our this inherent tendency to act like others which is harmful to market profits.

so, trade disciplined, unemotional, good statistically tested strategy and excellent money management. you will really succeed. With these all things gains are not instant but they are longlasting.

Visit this web page which measures your trading strategy % sucess , win/loss ratio, and tells you how much you must risk your capital on each trade.

http://www.hquotes.com/kelly.html

Thanxs,
Winston

Hi Winston,

Again nice write up. So u say to play pattern breakout u will always wait for a pull back and not play on a breakout if it satifies all criterias and also breaks out on good volumes. Do u ahve any book u recommend for pattern analysis.

Rgds

Rahul

Hi rahul,
good that you have interest in pattern trading.
Following books have in-depth study:

technical analysis of stocks trends: by Robert Edwards and John Magee

this is really a nice book, but again here you will be told how to build a car, and wht counts at the end is how you drive it!!!!

So, keep it goining,
Thanxs,
Winston

Hello Winston

A nice write up, and thanks for sharing an excellent resourse.
Random Equity Curve Simulator of a Trading System. We can use it for Win/Loss Probability Analysis with various combinations of Win/Loss ratios and Win probability.

As they say seeing is believing.

We can see the odds for various combination of the assumed Win/Loss Ratio and Win probability for a trading system.

The Win/Loss Ratio and Win probability coming from our Trading Record Book /Journal need to be benchmarked with our expections. As you said, Get it up there or ..
Regards
Sanjay

I am seeing lot of worthwhile postings from you, eversince you joined.... hope to see many more valuable and educative posts from you...

Regards,

Abhay