machi said:
Learning too many indicators, taking Elliot Wave to it's extremes, does this make you more profitable ? . Does having 30 projection lines on a chart give a better probability of likely price action than just taking the trend, price and associated volume, using support / resistance levels with good money management rules.Probably not.In fact it can make you confused, too many conflicting signals can freeze you out, stop you being able to place a trade.
What actually is taking Elliott to extremes? Didn't know such a thing was possible. You just follow the rules. Simple. A move will either work out or becomes invalid.
Does it make someone more profitable? Who knows?. But it might give you a hell of an edge if used in the right hands. If you really would like to have your question answered Porper, then perhaps you should pit your skills against someone who uses one of these systems. Then you would find out huh?What actually is taking Elliott to extremes? Didn't know such a thing was possible. You just follow the rules. Simple. A move will either work out or becomes invalid.
Does it make someone more profitable? Who knows?. But it might give you a hell of an edge if used in the right hands. If you really would like to have your question answered Porper, then perhaps you should pit your skills against someone who uses one of these systems. Then you would find out huh?
I tend to agree with machi, this is the hardest game in town. I agree with the notion that the right approach in the right hands can certainly improve a trader’s edge, especially when the focus of this thread is on pure chart analysis.
While I agree with Porper’s notion that too many indicators, or too much complexity which is not aiding the trader to be consistently profitable, is to be avoided; I would make a distinction that there are other variables to consider such as the technical analysis proficiency, experience, and approach (style, time frame etc).
Different styles of analysis require disproportionate levels of effort. For example, it is fairly easy to set up a simple moving average cross over, and enter and exit based on generated moving average cross over signals. To add complexity to this, add in a basic back testing system. Then add in an oscillator. Already the effort required increases.
Let’s consider various levels of Elliott Wave analysis in comparison. I know people like wavepicker for example have spent over a decade working on this approach. Also, consider that every person who reads this thread has a unique make up – both mentally and psychologically. So another variable is the person involved, and their make up – strengths and weaknesses. Add to this their determination and ability to learn and adapt, and their will power to do this.
So the question is, will one approach or another make you profitable? This really depends on a range of variables, doesn’t it? The person, the approach, and most importantly - the market.
This is where I again agree with machi’s points about the prevailing market conditions, and that there is a choice for example to trade the short side if the individual chooses to do so, and if they do, that there are issues to consider to trade profitably consistently if doing so. Alternatively as Daffy (tech) points out, you may opt not to trade short. In my view, horses for courses. So, counter trend trading is one valid way to make good returns even in a raging bull market if you are proficient at doing it.
I agree with swingstar’s points in post 301:
As for the argument of “complexity vs simplicity”, ironically I think this is a gross over simplification of what is actually a very involved subject. I kind of object to people glossing over the labyrinth of theories and practice in the market with this throw away line about “simplicity”. Let’s tease this out, and start being specific, rather than chant this sloppy mantra about lionising the “simplicity” (misnomer) over equally incorrect labelling of “complexity”.
Hard Facts:
There is a diversity of approaches, and every person reading this thread is unique. Some people are just not cut out to use many of the methods outlined on this thread. Many will fail and give up. Some will have middling results as they develop. Some will do really well out of the market, and make consistent returns.
Yes we want to be profitable. Yes we want to develop an overall strategy (which may involve one or more approaches) which consistently returns a profit.
The challenge is to be able to narrow down the information deluge we are confronted with into a format we can use to make market decisions. This can be based on a vast array of methods (too many to go into here).
The point I would like to make is that the strategy needs to suit the individual involved, and that the level of research and development is in part a function of the capacity of the individual, and in part the level of commitment of the individual in terms of time and effort, and the ability to be effective.
Yes we want to boil down the complexity into components that we can deal with, but this might actually be an involved process. There is a chasm of difference in effort and knowledge required if your objective is to build a passenger jet as opposed to flying a kite. They both fly, but the dynamics are vastly different.
So, just as wavepicker said in post 304, learning to read the instrument panel was necessary to fly the plane. If you want to fly a plane, you need to learn how to do this. If you only want to fly a kite then you don’t. What I’m trying to do is to talk about some specific areas of the instrument panel. I hope that this is of some interest to some of the readers who want to know more about the finer points.
Above all this, I think nizar is onto something by recognising the importance of psychology. It is over 50% of the game in my view. But this is not the psychology thread; it is the “improving chart analysis” thread, which is what I’ve focussed on. Full commendation to barney for keeping the thread on the subject which is to discuss different ways of interpreting charts.
Regards
Magdoran