Thursday, June 23, 2011

why technical indicators are not enough

if you are a medium term (swing or positional) trader
you have decent chance to make money
after learning and practicing the basics
1. money management
2. method
3. mind management

but if you are
a day trader or a very short term trader
even the above three
may not be enough

you may find it difficult to make profit

and you may find it extremely difficult
to preserve the profits
assuming you had got some!

reason?

simple!

operators don't want you to be profitbale.

why?

because if you are profitable

then they won't be!

so what do they do?

...dodge you, trick you, confuse you, bulldoze you

......trap you, checkmate you

how do they do that?

simply, by doing

what you don't expect to happen

the way you don't expect that to happen.

unpredictability is the only predictable thing in the market!

and what do we learn?

'predicting with indicators!'

'anticipating the trends and change of trends!'

and this is where you get beaten

hands down!!!

--

so?

what to do?

my learning is

that you can't beat the market with indicators

and trained gut alone!

YOU CAN'T BEAT THE MARKET

WITHOUT TACTICS.

you need to find ways

which land you in a win-win situation!

you need to find

'casual' moments of the market

- situations and moments

when the market's bluffs lie exposed!

where the operators can't play traicks on you

at least that easily!

you need to find ways

to be with the minority that is on the side of the operators.


here are some examples

- btst is a corner
where operators can't trick you.

- similarly, hedging is a way
where operators can't befool you.
(hedging is always done between unequal objects)

- likewise, using the one sided power of options
is a great way to take safe calls.

- one more weak spot of the operators
is the fact that operators can't change directions
at the drop of the hat.
there are time intervals between such turns.

- another possible idea for tactics is
the fact that mass public trades on
predictions of indicators
and sentiments.
so you can be sure
what the "herd" is going to do
and hence
what the operators might do

- yet another tactic
is to expect the unexpected
at every expectation point.

---

i just shared a few ideas with you.
i am developing my method
on the basis of one of these.
you may choose yours.
but the core / central message is

- indicators without tactics
are boomerangs.

- tactics with indicators
make the real defensive and offensive trading systems!

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