Does it matter if the OP is serious or not? Isn't the topic valid regardless?
I wouldn't say that Perry CJ Booth uses PA. I've always categorized PA as a clean chart and the tape and/or DOM..
There are several ways of making money in the markets, but some lend themselves more to objective systems than others. E.g., mathematical/statistical models... @sysot1t mentioned spreads...
Personally, I think every indicator one puts on a chart is completely worthless. I think being able to trade off a chart is a genetic trait, and no other indicators than order flow are needed.
The problem with TA is that one can have long streaks of winning trades just by luck, and this might fool the practitioner into thinking he is on to something. Charts are good for quickly seeing important levels and getting an overview of what's happening, but I've yet to see anyone master them on a micro level. The markets aren't necessarily random, but they certainly appear too chaotic to being decipherable by using bar charts on the micro level...
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If you have been at this for so long without succeeding, I would say that intraday discretionary trading is not for you. Most that have an aptitude for such trading, usually succeed fairly quickly. They only need to refine their risk/money/trade management...
If you are trying to build an automated systems, I would rather spend my time pursuing math and statistics rather than spend countless hours backtesting with Ninjatrader.
I will probably get some negative responses to this post, but I've yet to meet someone who actually have been successful doing so. But I have been around successful order flow traders, macro traders and traders employing statistical models. It seems most posters on message boards are losing money, although many lie about it. Trust no one, not even me...
This leads me to my final point, why would an unprofitable trader give advice in this thread?
It escapes me why someone would have so little regard for other's well-being that they would give advice they are unsure if works themselves... When I first started trading, I did not make a post for several years. I spent my time reading and researching. It seems that many start in the other end...
And before I sign off, I will say that there are a few ways to make easy money: Sell options or put up a moving average, VWAP or similar with SD bands on your charts. Or you could find a seemingly correlated pair/spread. "Reversion to the mean - it works until it doesn't"
You could actually become wealthy doing so, though; Several lucky fools have gotten rich by selling options (riskier than they thought) at the right time...
Last edited by Lornz; September 24th, 2011 at 11:13 AM.
Reason: spelling, spelling, spelling
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Ok, I guess that is a question of semantic nature. I would classify PA as order flow and/or tape reading coupled with a clean chart (if at all), otherwise I don't see the difference between that and TA.
I believe where most people end up spending years:
1. Typically part-time, try this for a little while, try that for a little while. Not really full time and not focused on a single strategy or technique. Kind of learning everything about everything.
2. They want to be mechanical traders with no decision making. Blue light LONG, red light SHORT.
3. They think that a current system they have found works works works, then the market conditions change and they go NEXT... (There goes 5-8 months per...)
4. They attend different chat rooms and snake charmers lure them here then there then they discover none of them work.
5. Then they go back to constantly refining refining, then they change instruments a couple times.
6. Then they give up for a while, slow down, look at charts occasionally.
7. Then they are at 5-10 years and they are still unprofitable.
I think you are 100% right that any of those systems work and I too have seen them profitable. I myself started down the path and still dabble a little for fun in each of those.
I am coming to realize that the key thing is knowing your instrument and sticking to your setup. Kind of a do or die scenario. Not picking on MWinfrey and this is out of the context of this thread, but I wonder how many guys are like him or honest like him and if there is a way to get them redirected and focused on the right path so in 2 years he can make it.
I think most traders that I have seen that are profitable don't do it in 2 years or less or at least I just haven't seen them. I still believe that is an anomaly. I currently believe that most truly consistent and confident traders are 3 years plus, but of course that all depends on background, mental ability, choices etc...
Take this for what it's worth as the longest stretch of profitability I have ever had was 6 months as a technical trader! And, I am currently on SIM!
by that argument, you validate @Lornz... the argument being, the charts should be clean... so if you glue your eyes to the panel 1 paying attention to the bars.. then all other indicators should be removed... as they would be distraction and nothing more.
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we finally agree!! ... with one caveat.. sticking to one's setup (when that setup has no basis or foundation or basically no change of ever being even remotely profitable) is suicidal at best... so I would say, learning the instrument, finding a setup that works and then sticking to its probabilities without changing, and doing the homework/hardwork part... there is nothing in this business without hardwork (or any business) and by that I dont mean killing yourself learning something (it should be innate or otherwise you wont succeed at it and it is best to find something else to make you $$$) but using the time wisely to learn and being diligent about it.