[mea]

Originally Posted by BlowFish »

It appears I must have (missed it). Perhaps you could talk about 'facts' as you know them and how they apply to reading supply and demand on a trade by trade basis. To be honest your original statement seemed to be rhetoric, perhaps you could expand on it?

My universe of facts (I prefer to think of 'truths' ) pertaining to the markets is pretty small. I have several fairly strong beliefs that are based on empirical research and observations but those sure ain't facts. In the past few years I have done quite a bit of research on 'the tape', order book analysis, and market delta. I have spotted characteristic's but again not many useful facts.

I would have to disagree about an edge being a proof of any fact about the markets. To me it simply shows that you can recognise a tendency in a market and exploit it. If you buy when the 15ma crosses the 50ma you will 'win' x% with a risk of ruin of y% etc. The only fact is the statistics themselves.

Do you believe that "reading price action by looking at each trade" can give you an edge? If you do how do you suggest we "look at" (or visualise) that data to exploit that edge? On most instruments it is quite difficult to look at that raw data and make sense of it in real time (though some clearly manage too). This is my understanding of what the thread is about but maybe I have got hold of the wrong end of the stick, it wouldn't be the first time.

Cheers.

P.S. There are a couple of other threads that might interest you the one about whether markets are predictable and errr... I forgot the second one.

1. You said, Perhaps you could talk about 'facts' as you know them and how they apply to reading supply and demand on a trade by trade basis. To be honest your original statement seemed to be rhetoric, perhaps you could expand on it?"

I will create a seperate thread listing the "Top 10 Market Fact's" and how to expoit them.

2. You said, My universe of facts (I prefer to think of 'truths' ) pertaining to the markets is pretty small. I have several fairly strong beliefs that are based on empirical research and observations but those sure ain't facts.

Imagine how much more CONFINDENCE someone could have when building strategies based upon market "facts", not opinions or "beliefs" as you said, as well as unproven theories, possbilities and degrees of probability. Which are the most SUBJECTIVE and subject to INTERPRETATION, and thereby ALLOWS MANIPULATION by the user. Which is the reason trader's let EMOTIONS interfere with trading decision and LACK DISCIPLINE to follow their plan. As their subjective plan could NEVER allow them to be DISCIPLINED to begin with, no matter how hard they tried! As their mind is in constant conflict.

3. You said, I would have to disagree about an edge being a proof of any fact about the markets.

I said, a TRUE edge, not edge.

The difference between the two are;

A. FALSE Edge utilized by MAJORITY of trader's is based upon degrees of probability at best. Now, can this type of edge be successful? YES, as long as the trader has exceptional "trade management" skills, which is a rarity.

B. TRUE edge is utilized by MINORITY of trader's and is based upon fact's, which are superior than even the HIGHEST probabilities. Thus, more successful.

Also, I believe, that's sufficient evidence to prove why the MINORITY profits at the expense of the MAJORITY.

4. You said, The only fact is the statistics themselves.

Statistics are NOT a fact. In trading, statistics are merely referencing degrees of probability of a certain outcome. Whereas, Facts DO NOT change, such as the case, where market conditions change, but the FACTS for EACH different market condition remains the SAME.

5. You said, Do you believe that "reading price action by looking at each trade" can give you an edge?

Yes, but only with a FACTUAL CONFIRMATION.

6. You said, there are a couple of other threads that might interest you. There's one about whether markets are predictable.

Thank you for the consideration. However, I already know the answer to that question. As the market has PROVEN what the correct answer is.

The market in its purest form, will answer any question someone desires. Someone just needs to ask the right questions and the answer will be revealed.

People look, but they don't see. They are blinded by their beliefs. However, its really not their fault, as that is how they were taught. They were just taught incorrectly. Hence, its the teacher's who's really at fault. Or they were given false, misleading, incomplete or just plain incorrect information.

[BlowFish]

Thanks for taking the time to reply in more detail. The idea of a 'true edge' rather than just exploiting some market inefficiency or tendency is intriguing.

It is a long time since I sat down and wrote out facts about the market (it was when I last did a trading plan) maybe its time I did again. I can see how the other points you make flow from these market facts. I wonder what form they (the facts) will take? For example for a market to go down it must make new lows, for that to happen old ones must break. I don't think anyone would dispute that as a fact. If you are a break out trader I guess you have the start of a plan right there. I should let you state your 10 facts but it's rather fun to guess.

[Mr_black]

This is all one need to comprehend Price and Volume action

[Mr_black]

This is the 2 outputs of 4 inputs... now all one need is to figure out The Games on Dom ...type of the players...who is showing who is not showing on Dom but is showing on T&S....and after that ....Who knows

[Eric Johnson]

Really enjoy the creativity and expertise of these posts. I am not a progammer, but have used combined multiple indicators to show useful information. It would be useful to build a system that isolates a specific bar as piviotal to a predictable follow through. For me the idea of identifyable "footprints" or markers that can only be seen with proper tools is where my development has gotten interesting. I am not sure it is so easilly uncovered in the micro time frames, as there is much "noise" there. I have found indicator combinations that show a marker on a new up trend 50% level, that can be used to extrapolate tops (even years ahead of time). It does isolate a specific bar that reaches this price level. I am not sure if it is a result of fund buying, or a special pattern not observed without the indicators. When I saw it consistently, it made me think of a marker for the elite with the tools to see and use. This is a bit unfounded, because it works on minute bars also.
My attempted conribution is that on the micro bid /ask level, I am not sure there is much transparency into true intent. I think on slightly longer time frames there is a balancing, and maybe a clearer insight. Perhaps using super fast oscillator combinations would be another way to give value to bars, then looking for anomilies using paintbars etc. Anyhow, glad every one has their specialty and it fuels creativity.