It is quite common for failed traders to look outside of...

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08/10/20

17:51

Post #: 47953160
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Originally posted by LeeKing ↑

I and many others wasted years trying to find a formula. You will find plenty of formulas that work for a while, but when you backtest them, you find they don't work. Those wasted years were based on a faulty premise, i.e. the human brain wiring that makes us look for patterns, e.g. "It rained yesterday when I did X, so I should do X whenever I need rain." The same pattern fascination can be seen in punters at the casino. And if you ask successful pattern followers, they start by telling you a seemingly simple pattern, then when you question further, you find that they have a million ifs and buts about the details. So it's not really a pattern.

There are many factors at play in the stock market, and those factors do not obey a charting formula, IMO. The main factors seem to be sentiment based on the economy and government/central bank policy. Zoom out and look at weekly and monthly charts. Australia had the China mining boom from 2003 to 2007. Then we had the GFC. Then Germany had an ECB stimulus. Then the US had corporate tax cuts with Trump's election. Then global markets fell with economy lockdowns because of Covid. Then the Nasdaq had the recent run based on QE. Currently, we have collapses and runs based on Trump tweets. LOL. So there's no charting formula that works except buying at support levels on the way up and selling at resistance levels on the way down. The main thing is to be unbiased and pick the prevailing sentiment, which will be based on the economy and/or government/central bank policy. I wish I had have realised this early on. So many years wasted.

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It is quite common for failed traders to look outside of themselves for the answers to their failure.

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