"As for " getting " it.
I often see this argument targeted at those who can't see the value of Gann / Elliot / Point and Figure / Market Profile and now VSA.
I like most who are sure "They Get it" have my own definition of what it is you NEED to get--- to get it.
Interested in Dutchie expansion on " Experience "
And others who like me believe we understand what it is we get."
You mention a few GOOD methods there tech
J. Peter Steidlmayer: In step with the markets==>
http://www.trading-naked.com/in-step-with-markets.htm
"The evolving nature of markets
In the 60s Steidlmayer noticed that markets tended to form bell-shaped curves each day as they found an efficient price by the closing bell. He profited from selling daily highs and buying daily lows in anticipation of an intraday trend reversal.
However, this "responsive" behavior shifted in the late 60s as commodity funds formed and their managers began buying high and (hopefully) selling higher in anticipation of a continuing trend. Steidlmayer altered his trading style to adapt to the changing environment, a shift that taught him to focus on the present tense as opposed to using historical patterns to predict the future.
Steidlmayer says today markets don't actively form profiles each day because "imbalances," or directional moves, are now so overwhelming the market can't integrate them and form an efficient price by day's end as it did 40 years ago.
"The market's basically changed to where we have selling followed by buying," he says. According to Steidlmayer, the market used to move sideways to integrate the imbalances (as it formed a bell-shaped curve), but it now moves down and back up in two separate phases. This means the basic tenets of Market Profile such as the five daily classifications and the four steps of market activity don't work as well as they did in the past."
If your strategies don't measure Time - - you don't have much of a chance.
AT: Similar to the way point-and-figure charts shift toward market time as opposed to chronological time?
JPS: Yes. When I started trading, point-and-figure charts were my introduction to Market Profile. It's an outgrowth of (that methodology). Point-and-figure charts can move a trader forward in terms of understanding the market - not necessarily in terms of making trading decisions. Instead of making mechanical decisions based on pure technical analysis, if you use point and figure, you've gained a better understanding of the market. This wakes up your brain a little bit vs. other chart styles.
AT: How do you compare Market Profile to traditional price based technical analysis?
JPS: Market Profile does not use chronological time. And if time is your biggest cost, you'd better have a "market time." Everyone else uses chronological time and price-to-price relationships. Price has very little or no value as a data point.
AT: Why?
JPS: Because there's a buyer and seller at each price. Time only defines price in the past tense. Assume a new contract began trading at 10. There's nothing you can say about it. But you'll have some reference if it traded at 4 last month.
Take a look at the trading industry. It's not using the database as an asset, and it's toiling instead of working. Technical analysis uses price against price, and price itself is not a data point. Moving averages don't exist in the real world.
Market Profile has survived even though the market's changed dramatically in terms of how it's used. It differs from technical analysis because you are now closer to being a part of the market rather than just making observations. There's a big difference there.
AT: What's wrong with back testing trading ideas against historical price data? Doesn't that have some value?
JPS: Well, the markets have changed a lot so you're comparing apples to oranges. First, you don't have a constant. If you're not testing the market, what are you really testing?
AT: The probability of whether a trade idea might be profitable.
JPS: No, you're testing how your tolerance works. Back-tests miss all the ingredients that may have been good.
AT: Such as?
JPS: When you look to the past for references, you're going to be late (making trading decisions) because you don't know a high or low has occurred until it's in the past. So you're looking for one scenario and the market's doing something else. Market Profile, however, shows development that you won't see in a back-test; they only show how good your external parameters are and these (variables) dominate the results. "
Manipulation is a valid concept
But The ''They call it VSA"'s Smart Money is not the same as Wyckoff's COMPOSITE MAN. It Explains why the "Smart money" maybe is not always smart.. The composite man outsmarts every particular everybody because he is EVERYBODY.
Also note J. Peter Steidlmayer on the subject of back testing in the above .
Keep going Dutchie
Not only that but every time you see a change in significant buying or selling of shares you'd expect these " smart " people would be rewarded with a rising or falling stock
Truth is it rarely happens like that............................................ The common notion is that very high volume in either direction is " Smart " money either entering or leaving a stock. Yet you'll also be told that very large holders will leave or add to a holding over a long period of time and not in one fell swoop.----- which is it?
Money is only smart if after they have finished buying PRICES go UP and
after they have finished selling PRICES go DOWN.
Now where did I put that P&F chart !
we can measure cause to infer effect YES
But we can also measure the effect and hence qualify the cause.
IE was the money SMART
If not --> Do you want to be there !
A good trend will make all the money look smart as it proceeds
How ever Anyone measures or identifies
A CAUSE to benefit from--> a (possible) EFFECT !
Just as important imo is Using the actual EFFECTs to Qualify and judge the preceding CAUSEs.
every time you see a change in significant buying or selling of shares you'd expect these " smart " people would be rewarded with a rising or falling stock
Truth is it rarely happens like that
Divergence between . Effect and Cause ... Was it Accumulation . Distribution or Nothing... What is the pattern and at different resolutions .
In a large Bull move . It takes very little cause to drive a trend. Because the Population of interest keeps increasing and diversifying its information.
In Mean Reversal .. Any amount of Cause will still not produce a Trend. Markets just Stop and Reverse ..Population of Interests are static and are using the same information sets.
A P&F chart especially will
shift (a trader ) toward market time
and especially
move a trader forward in terms of understanding the market
.
imo
Motorway