Market perception... not fundamentals

[ceasar73]

But technicals is trading the motions of others, mapping their actions...
QUOTE]

How is this done??

 

[beamstas]

But technicals is trading the motions of others, mapping their actions...
QUOTE]

How is this done??

Support/Resistance, Eliott Wave, Volume Spread Analysis, Symmetrical Triangles, Flat triangles, Wedges, Moving averages, Stochastics, MACD,

I could sit here and keep writing tech analysis indicators.

All of these are tools used to attempt to map the motion of the markets and predict what will happen next.

Brad

 

[ceasar73]

Does it work for you beamstas?

 

[beamstas]

Does it work for you beamstas?

Does what work?

If i used every single indicator out there i wouldn't be a better trader.

What seperates the good traders from the bad is risk management, NOT indicators.

Brad

 

[MRC & Co]

Risk management keeps someone in the game for longer.

It does not seperate a good from a bad trader, timing does.

Technicals and fundamentals drive price, is that so hard to believe?

 

[Mr J]

I'd say sensible risk management is part of being a good trader.

How is this done??

Beamstas said indicators, but I'd just say price action, since that also includes indicators (as they're based on price action). The price action tells you what's going on: market sentiment, strength, weakness, trend, reversal, noise etc. Every time the price moves, it gives hints, and when charted it tells a story.

 

[kingcarmleo]

GG makes a good point. My personal situation is this ; Stocks I plan to have in the short to medium term have a positive market perception e.g I hold ESG. Stocks I plan to hold in the long term have good fundamentals e.g I hold IBA. Finding a stock that has good fundamentals but not a lot of positive market perception won't make you money if your in for the short term, however if you are in for the long term the market will eventually realise the fundamentals and then develop a positive perception. Surely there is a name for this kind of lag effect, I'm going to call it " fundamental market realistation"

 

[tech/a]

Does what work?

If i used every single indicator out there i wouldn't be a better trader.

What seperates the good traders from the bad is risk management, NOT indicators.

Brad

Risk management keeps someone in the game for longer.

It does not seperate a good from a bad trader, timing does.

Technicals and fundamentals drive price, is that so hard to believe?

Nah

APPLICATION of ALL seperates the traders from the theorists.

Analysis (including timing).
Risk Management

 

[pilbara]

Someone also said something like (Wyckoff I think) 'The market is made from the mind of many...'

and the great Isaac Newton had a crack at it also...

'And back in the spring of 1720, Sir Isaac Newton owned shares in
the South Sea Company, the hottest stock in England. Sensing that
the market was getting out of hand, the great physicist muttered that
he “could calculate the motions of the heavenly bodies, but not the
madness of the people.”

but Newton could only calculate the motions of 2 heavenly bodies, any more than 2 can lead to chaotic behaviour. And even 2 bodies can make chaos
http://www.myphysicslab.com/dbl_pendulum.html

so when we look at large numbers, where "the market is made from the mind of many", we see an unpredictable movement caused by a small number of market participants, which is then magnified by the feedback of the multitudes acting together.

 

[MS+Tradesim]

so when we look at large numbers, where "the market is made from the mind of many", we see an unpredictable movement caused by a small number of market participants, which is then magnified by the feedback of the multitudes acting together.

Agreed. IMO, summed up well in Soros' theory of reflexity.

 

[ceasar73]

but Newton could only calculate the motions of 2 heavenly bodies, any more than 2 can lead to chaotic behaviour. And even 2 bodies can make chaos
http://www.myphysicslab.com/dbl_pendulum.html

so when we look at large numbers, where "the market is made from the mind of many", we see an unpredictable movement caused by a small number of market participants, which is then magnified by the feedback of the multitudes acting together.

This is probably why Newton had no bloody clue when it came to the markets

 

[MRC & Co]

Nah

APPLICATION of ALL seperates the traders from the theorists.

Analysis (including timing).
Risk Management

Application is timing.

Buy and sell is application and that is timing. This includes the timing of scaling in or out.

Risk management will keep you in the game, but timing can make a HUGE difference to your equity curve. If you know how to TIME doing size not just when you buy or sell (i.e. what are your high probability plays) can make a HUGE difference to your overall profit.

 

[MRC & Co]

but Newton could only calculate the motions of 2 heavenly bodies, any more than 2 can lead to chaotic behaviour. And even 2 bodies can make chaos
http://www.myphysicslab.com/dbl_pendulum.html

so when we look at large numbers, where "the market is made from the mind of many", we see an unpredictable movement caused by a small number of market participants, which is then magnified by the feedback of the multitudes acting together.

If your going to mention a mathematican, why not mention Black and Scholes?

Some black boxes or quant analysts make a PACKET of money, just as many discretionary traders do, it's the ability to take in a multitude of motions of 'heavenly bodies', not just two.