Disliked...traders always read various kinds of trading books and use the above techniques to trade. We know what technology they are using (such as some classic technical analysis), so we can know how they will react to the market...Ignored
I see nothing wrong with learning about and studying these methodologies, but I dare say if you depend on them to make your trading decisions, then you will be giving your money to the rest of us who are watching you...via the order flow.
Disliked...This is also the significance of metagame application for trading...Ignored
Disliked...Once we know that lots of people will do something together (not very accurate) at the roughly the same time, this group of people's behavior has meaning, and they can be analyzed as a group...Ignored
You can clearly see this cross was the result of a large move higher in prices...and because the averages lag behind even price (no to mention the order flow) the group you mention as using technical analysis methods are taught that they should be entering longs (if they haven't already). The first closed candle that shows this cross is indicated by a white vertical line. You can see that at that point price was clearly going sideways, and continued sideways long after that...until prices FELL...they didn't rise...even as prices fell, this cross shows a "bullish" indicator...Anyone and everyone who is holding long is either stopped out, or is having a very difficult time with this long position.
Now lets look at that same chart, but this time with the order flow:
I have drawn a line at the same place that the previous chart showed the golden cross. But you can see clearly that BEFORE the cross the order flow was showing signs of exhaustion even while the technical indicators were telling you to buy...LONG before the smart money was selling their longs to the technical analysts and even though they were en mass, the volume of those buys was absorbed by the smart money now entering short (indicated by the order flow inversion). But their entries were limit orders that the technical analysts were executing against with their "aggressive" market orders. ALL of this occurring BEFORE the cross...
Of course you can also see the same thing repeat itself again at the bottom of this movement, while the people following the cross were still trying to enter buys...the sellers keep coming in and negating their volume...all the while the "golden cross" is showing bullish bias. Is this really how we want to trade?
Disliked...Then we probably (not exactly ) know which groups may take action and what kind of action they will take (enter long or short?) , and we can judge which side has a better chance of winning by comprehensively comparing each of their entry reasons. This is what I want to express and i think the way of thinking like this is very meaningful... it's 2 o'clock this morning ,have to sleep now,,the rest will be sent tomorrow if any. Thanks.Ignored
Again I repeat, this is NOT another form (or some superior form) of technical analysis...it is simply the truth as I stated in the beginning of this thread. (1) Anyone who wants to participate MUST do so by placing orders. (2) These orders are processing in a grand machine called "the market". (3) The result of surplus unprocessed orders and their corresponding volume are what create price movements, and, (4) At times even the price movement itself lags behind the order flow that created it.
Do more of that which succeeds and less of that which does not - Dennis Gar