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'We are now in an age of Dark pools and algorithmic trading, is there a place for charts in the modern trading world? '
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I think there is. But I agree, big data, high frequency trading and the emergence of AI, quantum computing etc moving the market mechanisms, liquidity etc along faster. Some research suggests that overall, institutional investors pursue a broad range of trading styles that, to a large extent, offset each other. I certainly know of mathematicians in big institutions who start with a hypothesis, model it, conform to house rules etc and then don't look at the screen until it has run its course.... result is a profit or a loss! A retail trader is a cork on that ocean for sure.
I certainly see new patterns and get new understanding from my own research and data as well as reconfirm already known patterns. Disruptive events do happen eg Trumpean tweetenomics! Concentrating events do happen eg regulation etc. All these events can be identified in a chart across a range of prices both historically and projected. They can be triangulated with other data, other charts, news, candles, performance indicators etc and can improve our investment insight overall and may provide new signals to buy, sell or hold over the short or long term.
Like you, I am sitting on a paper loss with VOD (for all of the above) and VOD is a long term hold ….
Fair point Fleccy.
There are some scholarly research articles (if only I could re-find them again) "proving" that both fundamentals and technicals both suffer the same errors in reliably forecasting the likely future performance of equities. I could barely comprehend the constructions they used as a lot of the scientific language used was beyond me. There was no alternative offered to those two methods so I was left none the wiser as to what was the best way forward for the typical average investor to employ.
We are now in an age of Dark pools and algorithmic trading, is there a place for charts in the modern trading world?
To use a couple of metaphors, if trading was hunting, chart indicators could be used to steer the herd and make a big kill. Another metaphor, would be to compare trading to a game of cards. First stack the deck, give a false tell and then fleece the patsy's, sorry I mean chartists. Some retail traders will make money and many wont and the only real way to make money, is to bet big. I don't see myself as a trader, I see myself as an investor who trades when my investment comes good, but i'm currently sitting on a paper loss and not for the first time.
I know that multiple companies have teams of people continually working on Algorithms and that doesn't include the countless mathematicians also individually working on trading algo's. I think the charting days are long gone, although i'm not sure about candlestick analysis, but again software could do a much better job, much faster.
I'm a cynic by nature, so interpret my ramblings as you like.
Thank you Velo, very generous. I listened to the introductory lesson and printed out the flashcards.
I will challenge myself to add candlesticks to my daily/weekly review which always includes the 20 day moving average, Bollinger bands (+ adjustment to number of days and standard deviation), MACD, Momentum and Cutler relative strength index.
Many years ago I was able to download the daily prices from the internet for any period for free. Drop that data in a spreadsheet and run 'arima' modelling techniques. Once I felt comfortable with the trends and understood them, I discovered somebody was already doing it for me with the MACD, my favourite drop down measure available on most sites.
Re Fridays Doji, the flashcard indicates bullish @support but bearish @resistance. In my market screener chart it shows support at 123 and resistance 138...so we are like the grand old duke of York, neither half way up the hill or half way down and a lot of white space all around... LoL!
The telecoms sector was generally down on Friday. Maybe Broadcom played into that. Yet VODs financial performance is less dependent on physical network elements these days having made the commercial transition to a service model based on all you can eat data ie non partisan from a consumer perspective (re Huawei etc)plus IFRS regulating how handset revenues are recognised.
Perhaps Woodwards performance this week has reminded investors (Weekend FT) of 'the illusion of liquidity' in the funds industry. A retail investor caught up with Woodward might want to move to cash from Vodafone (4 days of red candles)...many retail investors doing this in the search for income and/or avoiding further capital losses across the market..
But why the indecisiveness?
VOD has addressed debt, rebased the div, underpinned a sustainable FCF (€5.4Bn per annum), continuing tender/ debt auctions this week to find the market price. Perhaps it’s the ‘looking for a new Chairman’. On Friday, VOD announced (RNS) the AGM chaired by the outgoing Chairman. With 5G in auctions complete, launch dates whilst waiting for the Liberty clearance, its all down to Trust in the management team. Maybe Friday was a light bulb moment with no net -ve or +ve but set in the longer term political relationship with Europe and a new Chairman?
Whoever he or she is, if like Jansen at BT they buy into the shares, we should see a lift in SP too.
Yes, they're deliberately messing up this site IMO, to force users to go to the new beta version.
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Longish something for you -
Free - Candlestick Flash cards........
Anyway, been searching for something from years ago - and found it :)
(New I'd kept a PDF copy somewhere, thought it was on my old disposed computer).
Luckily there's enough trademarks on the saved PDF to re-look it up the site and post a link. And after all these years it's still up. I'm talking about this -
http://www.tradesmartu.com/external/files/Candlestick-Flash-Cards.pdf?inf_contact_key=bfe2e4c6b95e1142aa8573cbb41e302ec14798554ddf50c437bb9a31602fec46
(Google Tradesmart University+flashcards - if the link fails) One of gazillions of teaching sites on the internet for candlesticks. They all give so many free lessons and other freebies away, there's no need to buy anything.
It's about 36 or so flash cards, to aide fast recall of the most pertinent candlestick patterns and powerful single candlesticks. There are literally hundreds but these are the cream of the cream so to speak. Faster that way.
Now It's time for a bit of Blue Peter here's one I made earlier with card and sticky back paper LOL!
Print them off on scrap paper first to see you've matched up the correct answers on the back to the pictoral graphic candlesticks on the front. And if all works out okay print onto some decently thick card that your printer will accept (experiment) - I had some spare from Poundland. Mine survive years later and that little thick wodge of oblong cards is still on my desk in the corner. Sometimes I used to take them into work and test myself against them during quiet periods.
- A picture appears on one side asking "What's This? And on the other side is the answer, plus explanation. Really speeds up human memory access like greased lightening. Have a go :)
Best of you stick to your chosen path of reading, as different sites have slightly differing wording in explanation. For instance I posted that Friday's closing candlestick was a Doji and that signalled "indecision in the market" and indicated a trend change. On the flashcard it says:
" Shows complete balance among buyers and sellers and agreed upon price " It does mention a trend change as well but my reading/learning is imprinted with "indecision in the market as to whether to continue with the current trend" sounds a bit more purposeful to remember more easily than 'complete balance' both of which, are true.
Have fun!
Hi Velo, good thinking. I tried twice already to reply and got 2 error codes. This is a test post...
I've always believed the inverted hammer pattern occurs at the bottom of a decent sized, downtrend. The last 4 days represent a very shallow downtrend, so I wouldn't rule it out, but it's in a weak position to be a true inverted hammer pattern. However Friday's close is not part of a pattern but a single Doji candlestick and that most defintely does signify indecision in the market with a possible change to the current trend. So..... maybe.
But with this couple of days shallow downtrend a case could be made that it still counts as all part of the up trend. Which wouldn't help the SP rise, in that case.
Whatever, I've been quitely impressed by the performance of the SP since XD day. It's only giving cause for concern in the past 3 or 4 days, so if it does rise it will be a positive sign that this XD period may not misbehave as the last XD period did by refusing to come out of the retrace after payment day.
While we are waiting for the Liberty clearance, I have been watching the candles.
I think we saw an inverted hammer yesterday which according to the textbook 'The Inverted Hammer candlestick formation occurs mainly at the bottom of downtrends and can act as a warning of a potential reversal upward. It is important to note that the Inverted pattern is a warning of potential price change, not a signal, in and of itself, to buy'
Of course it hasnt helped that VOD caused an internet outage for its international customers over the last 24 hours or so but assuming it is fixed now, we might see the SP recover lost ground next week.
This is just my amateur attempt to read the tea leaves, no advice intended, but any insights or other interpretations welcome?
GLA