Q1 "OBJECTIVE way to trade": stm forrestang isn't asking about an 'objective method'
but an 'absolute method'
Q2 "define a setup/pattern that is 100% recognizable" – absolute no-loss entry
haven't read any journals but since the price time waves movement is IRREGULAR
the answer to both questions is NO
but they're interesting questions particularly as I've just recently started to ask myself
'how would I explain/state my entry rules to a complete novice trader in order for them
to enter a trade that doesn't get 'stopped' – loses ?'
take reversal formations: simplest are a V at the top of a trend/wave, inverted V at
the bottom, but
they don't always appear
so if you see a pattern at the end of a t/w and call it a reversal formation/pattern
you might expect it to signal - after it's completed, now is a good time to exit the
current trade and enter a new Buy/Sell order, but
at the end of the new t/w – there was no reversal f/p ???
so right away you - only me has a rule to watch out for reversals that may or may
not happen, and that I think has to be rule # 1, but
if there's no reversal, you - I miss the best entry price, so rule # 1 isn't about reversals
if I were using a line I could say 'when the price crosses and closes above the line
exit current trade enter a Buy, v v Sell' as rule # 1
rule # 2 would be 'watch out for reversals', but
it might also have to be traded, unless, maybe anyway but if a Stop is being used
it may or may not get hit since the downleg of the inverted V either stops above the
opposite leg, same level as, or, drops below the level of the upleg - Stopped
then, IF the formation was a reversal but not part of a correction with another t/w down
to come, it possibly might be an absolute Buy/Sell entry pattern
Good post. I think that last point is the real killer, the primary reason it would be difficult for most people to trade even a fully objective system. Once you experience a string of losers, it can be very difficult to maintain confidence in the system. Even if you "know" the system's expectancy, you're also aware in the back of your mind that there could still be at least two reasons why the expectancy that you expect is not what you'll get in the future:
1. The testing you used to figure out your system's expectancy was inadequate or otherwise flawed; or
2. The market has changed in a way that impacts your system's expectancy.
This in a nutshell is why trading is hard. As soon as you hit a drawdown that's larger than you expected (and it's a matter of when, not if), it's easy to let all logic fly out the window. At that point it's very hard to trade out of the drawdown.
Forrestang, my method is completely objective and I will be sharing it with the forum (maybe in some sort of journal?) as soon as I have it automated. Someone from the forums is currently working on automating it, but I would be glad to share it with someone else that would also try and automate it.