All the things I learned of TA was WRONG
Everything I Thought I Knew About Trading and TA Was WRONG.
For some years, I had been learning trading and Technical Analysis (TA). As a result, I had to be extremely tight and on point on my risk management in order to be consistently profitable. And still I had major uncertainty within the calculations of far too many trades.
As I progressed, I stumbled into Volatility trading and the Better Maths behind the indicators made by Balipour and Pig.
Comparing Traditional TA indicators and maths to the next level trading indicators built on better mathematics, is like comparing a car to a rocket ship. Sure, both will get you around, but one is far more likely to help you reach new heights in your experience, while the other is more likely to keep you moving around more or less on the ground, until the vehicle breaks down.
Lesson: Things to know about trading volatility:
The standard deviation of returns is Volatility .
Returns are Mean reverting. Price isn’t.
Price Action is impacted by Geometric Brownian Motion. This means there is some amount of Randomness in every candle.
Time decay and Entropy affect Returns.
These things and more are all measurable and you can learn how to use the indicators that measure them, complete with official documentation, tutorial documents, live streams, youtube videos, active discord communities, and more.
It took me about a week to get the hang of trading strictly using these indicators and the others from Ba+Pig. This triggered a major shift in my trading routines. I have not traded with traditional TA indicators since the end of August, 2020. And I haven’t looked back. In so doing, my entire trading experience has changed for the better. The performance comparison is night and day, and you can see this for yourself if you try them out.
The lesson here is that TA does not work consistently enough in this digital age of fast computers running better mathematics algorithms and high frequency trades.
Do yourself a favor. Stop drawing subjective lines, shapes, patterns and other ridiculous art for any charting you use to trade. Learn volatility trading. Learn better maths. Trading is not voodoo art and magic. There is no secret sauce. The mathematics give you the vast majority of the info you need to succeed in your trades. You just have to know how to use that info.
Even the world’s best quant firms do not have better maths than these indicators. They may have more and better data to analyze, but the maths are the maths. Therefore, the formulas are the same high quality level of mathematics that can actually be used to calculate HVP, Probability Cones, Expected Moves, Time Decay and Entropy, as well as Hurst Exponent , DWT, MOM, Impossible RSI , Reverse RSIDiv , Correlation Coefficient and more!
If you want to get their cutting edge indicators for yourself, you can do so by checking all the free indicators that @AlphaTrading-WolfPack has posted on its TradingView account’s Published Scripts page. And to try or get the Premium volatility indicators, if you cannot to find it on your own, then you may ask in the discord community and we will be happy to let you know where to find them.
This is not financial advice. This is just my opinion. Do your own research. You’ll be glad you did. 🙂
This article is an edited version of an article republished in this new format, with permission from the author. The original can be found on this TradingView published idea by stepstones.