User: Burak: DOW: Trading channels: Charts to start the week

Trading channels: Charts to start the week

Mother of all ellipses.

Comments

Not Sure Squirrel - Come Find Me When You Wake UpNot Sure Squirrel - Come Find Me When You Wake Up
Where do those points intersect price wise? thnx 11/17/13
Tim KnightTim Knight
Lovely! 11/17/13
Idiot WindIdiot Wind
sweet! 11/17/13
Market SniperMarket Sniper
Looks arbitrary to me. Why there and how is that determined? Also, what are the probabilities of the next technical expectation of that? 11/17/13
Closing Basis - go with the flowClosing Basis - go with the flow
***The following is my own personal belief about technical analysis which may or may not be correct. Feel free to disagree.*** 
 
When it comes right down to it, I suspect that (ellipse) is completely meaningless. Try making a random shape, a circle or something non-symmetrical and move it around on the chart until it "fits". The only reason technical analysis works in a lot of cases (like channels) is because many people are watching them. That is their only use. There is no reason otherwise that a price should move to meet any point on a chart that would be symmetrical except by random chance. Thus, the participation is what causes TA to work. I remember hearing an interview with a forex trader who found that his TA methods worked well on most currencies except the Yen. However, apparently, the largest traders of the Yen are in Japan obviously and they use ichimoku cloud as a primary analysis tool. Thus, Yen prices responded very well to ichimoku and not so well western TA.  
 
I came across this opinion/fact after I formed this belief which was an interesting confirmation for me. 
 
Here is the interview I mentioned, by the way. Some very good interviews in the list. 
https://www.youtube.com/watch?v=LvU2FShV15Q&list=PLOn0-_K- aYvShFmDnfUDw1O7b-5EELL8_&index=12 11/17/13
BurakBurak
@Closing Basis: 
I get your point. The ellipse is a fairly new thing to me. You can't compare a random shape to an ellipse though. You say technical analysis is a self fulfilling prophecy but I beg to disagree. Take gold for example; There are many factors to gold other than TA traders. There are millions of people buying and selling gold without looking into charts. Yet TA is helpful in trading gold.  
 
Here is a link I posted in ellipses. I'm not an "ellipse trader" :) Just found some patterns with some very good accuracy.  
http://www.tradingchannels.co.uk/2013/11/ellipse-my-new-toy.html 11/17/13
Not Sure Squirrel - Come Find Me When You Wake UpNot Sure Squirrel - Come Find Me When You Wake Up
I would think ellipse would have potential validity in conjunction with that trendline... 11/17/13
BurakBurak
Yes that was my point. 11/17/13
Closing Basis - go with the flowClosing Basis - go with the flow
Ah, I thought this misunderstanding might occur. I did not say that TA isn't helpful. In fact, it is the very foundation of my trading methods. I think that to some degree technical analysis IS a self-fulfilling prophecy, yes, and of course, there are many other influences and gears in the market machine that are way too complex to account for. At times, I feel there may be a bit of back and forth between whether risk management (i.e. institutions deciding whether they are net buyers or sellers) or TA is the main driver in trade decisions for the big boys. All I am really saying is that if no one was looking at any price charts at all, I'm not so confident that TA would work as well as it does, but, granted, this is an untested hypothesis. 11/17/13
BurakBurak
I think the best way is to look at charts before TA became popular and try to find out the same patterns that we see today. Perhaps before 1990. Thanks for the comments. 11/17/13
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