Why Technical Indicators Dose Not Work ?

[Giraffe]

I have seen older dealers, who are have many years experience. They trade accounts on behalf of their clients. They see order book and trade. is that same as tape reading?

Nope....orderbook is only a part.
The original "ticker tape" (during the time of Pit trading) only printed the trades and orderbook like today (Snapquote/Market depth here and Level II quotes in US) came with the advent of electronic trading.

In its present format, it consists of both the orderbook status and the "tape" compirising of time - price - volume- Bid/ask mainly.

Search youtube for Level II quotes, you will understand.....

But in India we don't have it organized like the American Exchanges. Orderbook visible is only upto 5 bid and 5 ask quotes. And the real tape is run else where if you get special data-feed.

 

[Price Pattern Recognition]

Technical Indicators [Better to say the word Knowledge of Technical Analysis in broader view], Fundamental Knowledge, Knowledge about risk management, money management, etc all like various weapons used in a battle field. It is all about the skills, years of experience, psychology(strength of mind in adverse condition, fight against emotions, alertness in every situation etc) of the fighter which counts for survival.

Searching for a holy grail Technical Indicators is just like searching for a magic sword which can ensure a win in the battlefield, that never exists.

Just think of the famous 'sword of Tipu Sultan' or the famous 'sword of Rana Pratap' can't ensure anyone a win in a battlefield. It was the user of that sword which make them famous not the sword itself.

Another very important point is that, suppose if the swords were interchanged between Tipu and Rana, what would be the result? It'll only decrease the efficiency of the warriors. Because the swords were made/chosen according to the strength & weakness of the warriors. Then, after lot of experiments and real life experience Tipu & Rana mastered how to fight with their weapons. So choosing a particular weapon is also very important according to users strength, psychology and it not an easy task. Most people fail to choose the right weapon (instrument or method) also.

Same is true for Technical Indicators[Analysis]. That's why most people think Technical Indicators Does Not Work [ Day Trading (most difficult type of Trading) Does Not Exists, etc etc] .

 

[prst]

Hi,

I think I am replying late , but i couldn't resist myself to express my views. Most of the newbies when they start playing with those indicators think that they got the holy grail. but after spending 1000 hours, and doing some paper trade they feel that TA doesn't work.
What I think is In day trading, technical analysis is not needed(Again debatable !), what we have to do is we have to find support and resistance and watch price action carefully at those level.
But the million dollar questions is : How to find those support and resistance. to find the s & r no technical indicators are needed just Initial range, D(-1) High and Low, D(-2) high & low , and week high and low are sufficient.
and look for price action when stock is trading near those S&R.:thumb:

just a bit curious.
are S/R lines holy grail ?

 

[TraderRavi]

Why Technical Indicators Dose Not Work ?

because " azgar kare na chakri, panchi kare na kaam, das maluka keh gaye, sabke data ram". :thumb:

 

[rkkarnani]

Why Technical Indicators Dose Not Work ?

because " azgar kare na chakri, panchi kare na kaam, das maluka keh gaye, sabke data ram". :thumb:

Yeh to sahi kaha hai aapne !!

Ram naam satya hai !

 

[4candles]

trading.nifty


The only Reality for any given trade in the market is either a Profit or a Loss.

The Ultimate Reality, after a bunch of trades, that everyone seeks in the market is Profit.

Unless you don’t know how to use your tools effectively - everything is an illusion


“ When the only Tool you have is a Hammer,
everything looks like a Nail”


The wheel has been discovered/invented ages ago, but its shape is still the same. The only thing that has changed in a wheel is the design. Tomorrow, if you find something new that would replace a wheel/Circle (in any form) than are you going to call the wheel as an Illusion?

Technical indicators have been in use for many decades now. All those technical indicators/system are invention /creation of some traders who made a/some fortune (and or helped others) using them either individually or in combination of other indicators. Those who have understood and followed the rules have used it to their advantage and those who couldn’t or were not satisfied or content went in search or creation of others.


You started your post with the title: Why Technical Indicators Dose Not Work ?
This, At first gives an impression that you are asking a question possibly because you must have not achieved any success by using them and are trying to understand -why?
But then you end your post by saying:

If you believe that it dose not work..
I will discuss latter..

Implying you have discovered or learned something that you want to share with the members, but not before you find what others think about your question/ a debate. (And it is pretty obvious you will find – initially explanation and later opposition.)

Then later on, in post no 27, you come up with the idea of Reality and illusion. All is fine until this point. But what is annoying with post 27 is that you straight away discredit all technical indicators stating that it is an illusion. It is like one is blaming his tools for his failure.

Considering what ever you posted until now – don’t you think all this has an undertone similar to that of a <some> fundamentalist (think whatever comes to your mind that does not have anything to do with markets) who does not respect any existence of the other. We have friends, here, who have had rough arguments as to which is best FA or TA (I still don’t understand why?), AND now we have a new question for a debate/argument!!!


No, don’t get me wrong. I strongly believe you have started this thread with good intentions and you want to share and help others to make some money by following a new(possibly) method ( which I hope will not use any technical indicators in any form) which is praiseworthy, and I welcome that wholeheartedly.


:thumb:
Wish you all the best and hope your system will be as good as what others are using if not better.
:thumb:


Looking forward to your explanation about Reality

 

[jahan]

Looking forward to your explanation about Reality

Hello,

Great explanation Sir.....i salute u for the Same....as iam also eagerly waiting for the Reality he is talking about.

Regards,

 

[rkkarnani]

Somewhere someone pointed out in this thread that trading.nifty was quoting from something called YTC: Price Action Trader. I am not aware if its a book or a TA course.

 

[bjj9126]

Yes Dear,
you are right,

The conclusion of YTC :
1.trade with 3 time frame
2.use uper time frame for finding support & resistant
3.use middle time frame to find trend.
4.trade as per middle time frame as per strenth and weakness of trend
5.trade around support & resistant area
6.and fine tune your trade with lower time fram

But after all YTC is also moving around price action and also using MA on their chart

Thinking about Profit from learning with YTC is usless...!!!

I have also read number of books like this..

But I am thinking beyond THE PRICE,

Dear Trading.nifty,

Interesting heading "Why TA indictr dosnt work ?"

I cant understand that r u asking people or r u going to discuss something new ?

If u r going to discuss something new "beyond the Price" then most welcome,
Because all members will be benefited from you.

If u r asking then u can find correct answer from forum and seniors.

But if u believe that TA Indctr dosnt work then u r may be in problem.
If so then I can guess that TA Indctr is not ur problem,
The problem is the way u r using TA Indctr.

bjj9126

 

[Price Pattern Recognition]

I wish, friends here who think 'Technical Analysis Is An ILLUSION', must go through the list of "Top 7 Technical Analysts of All Time" and "Worlds Richest TA Traders" to see what is the REALITY.

http://etfhq.com/blog/2013/03/02/top-technical-analysts/

With such real life evidences, now motive of the topic 'why-technical-indicators-dose-not-work' ends here.

Most of such famous Technical Analysts invented their own technical indicators or developed their own method after combining several technical indicators to make billions.


If the thread owner want to share something new invention or method like that (may not be an indicator or combination of them) he is most welcome.


--------------------
Here is most famous quote from Jesse Livermore to remind the fact again that 'History Repeats Itself' which is the base of Technical Analysis.

All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis.
— Jesse Livermore

Cheers.