Markets are fractal. Looking at different timeframes provides context.
Everything is fractal but still we can't predict the picture. You can have enough context about anything by observing a snapshot from the past. Still, too vague.
If you just look at a random timeframe without any other context and follow some random technical indicator then you probably won't make money over a series of trades.
the context is dependent on trillions of factors. You cannot possibly draw any correlations —especially when 5 whales from chine literally can draw lines on the screen.
If however you look at multiple timeframes, look for what are bullish signs and see them in all the timeframes and then pull the trigger with a pre defined stop and profit target then you'll probably make money over a series of trades.
I doubt it because most traders follow the same strategy and yet they fail. This is not actually "high knowledge" I can train my 10 year old nephew how to trade based on those principles in a day.
Given you compliment it with some order book tape reading and the psychological quirks of the participants that make that market.
that gets it even more complicated.
Most is bullshit, but there's a reason some people have been profitable for decades using technical analysis and it's not just luck.
it is luck my friend. Much like in horse racing and sports gambling the law of averages on a standard distribution will favor some people, always. Same thing applies to lottery.
The thing is, TA is not about predicting the future. It's saying something like, 60% of the time I'll make 5% and 40% of the time I'll lose 5%.
It's not predicting any one trade, it's making slightly more money than you lose over a series of trades.
Not a crystal ball, just an educated guess within a framework that has a potential positive expectancy.
Do you think that all markets are random all of the time? Up, down or sideways each with a 33% chance of occuring?
Very good observations. The stock market truly is like a sports book. The reason teh sports betting line moves after the initial line is posted is because bettors use their knowledge to determine which of the posted lines offers the best chance of a win. Same thing with trading stocks. There are actually ways to "effectively" measure sentiment. And sentiment is the main factor that determines price. The goal is to pick out the setups that offer you the best odds of a win. Sometimes the sentiment gets skeeewed so heavily to one side that the casino is actually "daring" you to take the other side of the trade...that's how good the odds of victory can swing to your favor. the number one rule of trading of course is to stay off of the $5 blackjack tables as that is "likely" where kyriacos (and the rest of the crowd who knock the benefits of sound technical analysis) will be found. ALWAYS go to the $25 minimum table when playing blackjack. At least there your chances are "decent" that everyone at the table won't be just "wingin it." :-)
Will it help you be a better farmer at all if I have told you that this year we are going to have hail 5% of the time and wind 60% of the time if I didn't tell you when?
which still can't beat a monkey making random choices or someone hodling.
Again, too generic. if anything. semi-educated guess which is worse than completely ignorance ..see monkey.
Absolutely. Except ofcourse when our deal whales start moving things around as they like, creating mirages and all.
The market isn't random because it's based purely on human psychology, which isn't random. The market moves on "hive emotion" among other factors like "whale manipulation" (part of psychology), and likely millions of other variables (few of which aren't related to psychology, such as climate variables), but psychology is the inevitable prime influencer thanks to the fact that we humans can't escape our own consciousnesses and we humans make the markets.
Because it's not random, there ARE patterns. Because it's not random, money CAN be made through careful observation of said patterns.
There are ways to measure this through statistical analysis, which confirm that the markets indeed are NOT RANDOM (to something like 99.9999% certainty, given the breadth of the random samples across the markets through time) -- at least, not at scales that are relevant to our lifetimes (minutes, hours, days, weeks, months, years, decades, centuries).
Oh yes. Human psychology is pretty random. You can confirm that pretty easily by just examining human relationships. There are so many constituents in places with so many people taking place that the inter-relationships and effects become chaotic.
If someone else is drawing the patterns — which is the case in the crypto world where 5 companies in China control 90% of the market then "patterns" are pointless. They work much like hunting traps and unless you are not them, you are going to be the victim. I have seen any making a killing for a while and then losing pretty badly.
It is much like the casino. Eventually the vast majority of traders will exit with a loss.
Pretty random and random are vastly different things.
Also, patterns have seemed to work more often on bitcoin than any other "market vehicle" that I've ever personally traded. The whales seem to want them to work, which is smart -- it's ideal to have the market participants pushing price when you want them to and using the hype that's already there to rocket light-years past traditional targets.
Hyperbolic moves are what the big boys want, because that means lots of dumb money coming in at multiple X levels, giving them enough bidders to sell their big positions for 5~10 X profits.
Agreed. But it's mostly because this game requires a godly amount of patience and persistence, both of which 95% of people don't and never will have. People are good at rationalizing, that's about it.
dude, even traders have admitted that Bitcoin this year was perhaps the hardest coin to trade.
Actually any noob knows that you cash out gradually on parabolic moves. common sense really.
and it makes you wonder. if the tool are "good" then why are they fucking up? ;)
Noobs?...haha, dude you're funny.
If they knew that then the parabolic move would never happen. No, the noobs don't start buying until the majority of the move has happened and they wait for it to "hit the moon" because they're in the enthusiasm, greed and delusion stages. Again, patterns play out on the market thanks to some very predictable psychological weaknesses in humans, that's why the big money nearly always cashes out ahead of the "noobs" and the the dumb money doesn't even think to sell before they're back in losses.
This cycle has literally played out millions of times. People will rationalize why they lost instead of spending the energy to figure out the real reason -- that's the real problem why most traders don't make money -- their egos are in the way.
Because most people don't have the balls to stick around long enough to confirm that their trading strategy, with a 55% win percentage, WILL have periods of draw-down, but also WILL pay off in the end, just like the casino with its small edge.
And the only reason why the edge is there to begin with is because the majority of the people in the game aren't anywhere near psychologically fit enough to be in it.
The point of technical analysis is to give you an indication of when. And over a large sample size, yes, probability becomes relevant.
Did you even read the article you posted? The monkeys were more profitable because they picked smaller, high risk companies. That doesn't mean their picks were necessarily better overall.
I consider "better" what makes more money. And they won.
That's like saying someone is a "better" poker player because their 2-7 hand beat someone's pocket aces. It's about probabilities.
always