- Are there observable realities you can put down about the market?
- Are the ones I indicated weak or can they be attacked?
- Can you explain your realities logically?
Starting from the basics, these are my current beliefs:
1. The market is chaotic, therefore not predictable. There are windows in which the price is predictable, but this happens for a short period of time and then the movement becomes chaotic again.
2. The market has been, is and will always be manipulated. We have documentary evidence of institutions that collaborated to move the price in their favor, and although today it is more difficult, this still happens.
3. The price moves only and exclusively due to a difference between supply and demand. The presence or absence of a pushing force is all that is needed to make the price move. Studying the past won't tell you anything about the future.
4. There is no edge in the market, and anyone's edge is small. When an edge is identified it becomes more and more evident and exploited by an increasing number of investors, until as the number of investors exploiting this edge increases, the edge itself is no longer valid.
5. Direct consequence of point 4, there is no purely mechanical approach to the market that can work in the long term, nor an indicator, nor anything else. Adaptability is the only possible path.
6. Moving averages, indicators, fibonacci, supports and resistances are tools observed by a large number of traders, and they work occasionally only because these groups of traders take them into consideration and make decisions based on them. However, even the broken clock marks the exact time 2 times a day. None of these tools can indicate the future direction of the price.
7. The entry point into the market, an obsession of 99% of traders, is LESS relevant than the exit point. Paradoxically, we could enter at any point in the market, if we knew where to exit or how to set SL and TP.
8. The "favorable" Risk Reward is a lie for novices. If you don't understand how a 1:3 or 3:1 RR is exactly the same thing, you're in the wrong place. (take it or leave it, the only difference is the ability to deal with a negative series of losses, and once again the traditional theory of a narrower SL and a wider TP is bullsh*t).
9. As repetita iuvant, what seems to work today does not work tomorrow, this is because on a general level the market moves when one of the two sides has less resistance, or on one of the two sides there is greater force, NOT following a logical pattern.
10. The data provided to us with the candles is distorted or unreliable. Each broker has different candles and each candle contains a time interval within which we do not know exactly what happened. (we can obviously lower the time frame, but this does not solve the problem, the candles are a snapshot of a time frame, and are subject to variability, they are NOT truth).
This is enough as a start, this list will be updated as necessary. Any observation/objection is very welcome, as long as it can be explained logically.
Cheers