Technical analysis disappoints me

[Mongoose]

Troj, instead of a problem, you have presented a revelation.

When a trader discovers that indicators are not predictive in any way, he/she is one step further along the road of success. The market presents limitless opportunities, but indicators restrict your view of the market (blinkers) and take you out of the "flow" of the market.

Someone showed me the best uptrend I have ever seen in my life, then said that they were going to sell short because the RSI was overbought!!

Price... that's the next step. The market will always display recurring patterns that present LOW RISK OPPORTUNITIES.

Your comments are right on the nail, these indicators are "complex", "predictive" and the market is unpredictable

The damaging thing is that most people think "the more I learn about indicators, the better my results will be. BEING A BETTER ANALYST WILL NOT MAKE YOU A BETTER TRADER. This seems like a harsh comment, but years of live trading and backtesting has proven this to me time after time after time.

The market is the ultimate freedom, make sure that when you "rely on my intuition" you have RULES that you SHALL NOT BREAK pretaining particularly to money management.

If you are consistent in your approach, then you will soon find out what works, and what doesn't... maybe even improve on some systems, but in the end, money management, and consistency will make the lion share of your profits.

I say, congratulations, you have moved on to a place that very few traders reach, and you discovered it by yourself.

As a general guide there are 5 steps in the traders evolution.

1. Novice
2. Realise that indicators cannot be the edge and the market can't be predicted.
3. Mechanical or consistent simple system trading and Mechanical or consistent money mangement trading
4. Money mangement advancement for exponential returns OR discretionary element
5. The Zone

Believe it or not, most of us were closer to the Zone when we first started trading.

You will click when you reach each of these steps. One can't stay in the Zone all the time, but you find it easier with 24markets than others because of the flow without the train and carrages effect of the open and close. The live calls I made today were 2 mechanical and 1 from intuition or the Zone as it is called.

[bam]

Could not agree more!

The only indicators I use are S/R levels and fib ratios( which tend to correspond with with support/resistance levels anyway).
Indicators lag the price and only react as the price changes,personally having tested and used them I can't see any advantage of using them.
But they are great as a learning tool until you get the hang of things.

[jiacopel]

bam,
How do you use the S/R and fib levels for intraday trading without any other indicators? Do you just blindly buy/sell at these levels, or confirm it with chart patterns? Breakouts?

[bam]

I personally don't spend all day at the computer because I don't have the psychological make-up to do that. I tried it a few times and would end up killing profitable trades because the choppy nature of forex sowing seeds of doubt in my head.

So I set my trades off S/R levels basically the following way.
In a up/down trend, I set an entry price for retractments or set a price for a breakthrough a S/R level, this changes according to the way I view the markets. In a range bound market I sell or buy at S/R levels.

Also I use this method because of where I live (NZ) there's no way I can successfully trade the markets when all the action is happening at 3 o'clock in the morning (American opening).

A question I have for any one who mght know,do the major institutions use automated software that buys/sells when certain levels are breached?.

[hkmsibet]

Hi all forex trader,
Recently I found a new technical analysis in forex markets.The results is so amazing;the returns up to average 20% per month.
But the margin-in min.US$50K.and have to enter the market from 1st day of the month to end of the month.Everyday enter time must on asia market open & exits subject the profits or loss.
Please open the attachment and see the results on USD/JPY from 08/2002-03/2003.
Anyone interested about this new formula can contact me geucy@yahoo.com.

BYE!

[jack8238]

Troj
every newbins had been confused about your problem,if you want to became a "profit trader" ,you must have a strong confident.donot give up!

[Troj]

Thank you, friends. Thank you for all your tips and comments on the issue i've raised. I have been monitoring them very closely and trying to follow them. I cannot say i have achieved many significant results in terms of profit making, but at least i stopped feeling down at the mouth and, TA now makes some sense to me. I understood that no matter which platform you use be that Metastock, omega or others (I use Dukascopy Deal Station) your ultimate success depends on your ability to "sniff' the events while giving some credit to TA instruments. Thanks again for your comments and i am looking forward to hearing new ones.
Good luck to you all.
Troj

[Baruch]

Originally posted by Mongoose
Troj, instead of a problem, you have presented a revelation.

When a trader discovers that indicators are not predictive in any way, he/she is one step further along the road of success. The market presents limitless opportunities, but indicators restrict your view of the market (blinkers) and take you out of the "flow" of the market.

Someone showed me the best uptrend I have ever seen in my life, then said that they were going to sell short because the RSI was overbought!!

Price... that's the next step. The market will always display recurring patterns that present LOW RISK OPPORTUNITIES.

Your comments are right on the nail, these indicators are "complex", "predictive" and the market is unpredictable

The damaging thing is that most people think "the more I learn about indicators, the better my results will be. BEING A BETTER ANALYST WILL NOT MAKE YOU A BETTER TRADER. This seems like a harsh comment, but years of live trading and backtesting has proven this to me time after time after time.

The market is the ultimate freedom, make sure that when you "rely on my intuition" you have RULES that you SHALL NOT BREAK pretaining particularly to money management.

If you are consistent in your approach, then you will soon find out what works, and what doesn't... maybe even improve on some systems, but in the end, money management, and consistency will make the lion share of your profits.

I say, congratulations, you have moved on to a place that very few traders reach, and you discovered it by yourself.

As a general guide there are 5 steps in the traders evolution.

1. Novice
2. Realise that indicators cannot be the edge and the market can't be predicted.
3. Mechanical or consistent simple system trading and Mechanical or consistent money mangement trading
4. Money mangement advancement for exponential returns OR discretionary element
5. The Zone

Believe it or not, most of us were closer to the Zone when we first started trading.

You will click when you reach each of these steps. One can't stay in the Zone all the time, but you find it easier with 24markets than others because of the flow without the train and carrages effect of the open and close. The live calls I made today were 2 mechanical and 1 from intuition or the Zone as it is called.

Right. Don't rely on indicators. But follow the news, the trend (look at the chart) and good money management. It's very simple.