Falling into that flawed way of thinking that because a line crossed another line or because priced reached a certain level it was going to do this or that cost me thousands + all the software I had foolishly spent money on. My charts were so cluttered up with indicators and moving averages that I could not hardly make out the price.
I had to laugh at that last statement. I think a lot of traders fall into that mindset of 'the more indicators I have the better' or somehow that they're just a more advanced trader if they use all that stuff... I think everyone goes through that phase when they first start because there's just so much technical eye candy out there and it's all new and fascinating.
As for support/resistance levels I'd have to agree with you to a great extent. There
is a memory in the market and so past movement does affect future movement but attempting to judge the strength of any particular level is guesswork at best and whether price reacts to a level or ignores it is mostly dependant on where it happens to be within its own internal count.
The same goes for technical patterns. I used to read books and magezines that would claim that certain patterns could forecast direction. But I never found technical patterns to be realible for that.
in the last 4 months using that method and with the ability of mcfx to put the rsi from different time frames on one chart has got me back every penny I lost and spent on software plus.
That's quite impressive. I'd consider 4 months to be a significant track record, esp. with those kind of results. I fiddled with RSI a little back when I was studying the stock market but it seemed to me that the indicator mostly just followed price. If the stock was trending upward RSI was moving up and vice versa...
This part is going to sound real goofy to all the pro traders but it is not just the divergence that I look at, in fact dont look at hardly at all, it is the shape or design of it...
Interesting. I'm not a pro trader but that sounds sensible to me. There's definitely quite a bit of weird geometry happening in markets. Is there any chance the shape you look for resembles any of these?
http://www.reactionaryeventmodel.info/#02
My recent research has focused on understanding how trends are percieved and how that perception changes with changes to chart resolution. I've found that trend perception passes through stages as outlined in the graphic, beginning with a simple LINE and proceeding to greater complexity as resolution is increased. Two of these patterns are the same as those Elliott used to support his market model. But there are 6 stages so he was only seeing a small piece of the larger picture... The simpler stages are simply low-res manifestations of the last two valid structures (5 and 6) - of counting sequences playing out in the market. It seems to me that how movement is percieved is at least as important as what is really happening. The
reality is the constant repitition of counting sequences which can produce all sorts of geometric structures. The way that reality is percieved follows the stages of perception.
One rather interesting observation that comes from seeing perception as chopped up into segmented blocks in the market is the realization that
noise is confined to its own block. I've always heard traders talk about noise but I never really put much stock in it. It turns out they were right.
http://www.reactionaryeventmodel.info/#01
Overall the main goal of my studies has been to find a way to pinpoint primary trend terminals or turning points. I have yet to translate what I've covered above into a practical no-fault trading strategy. That's what I'm working on now... If I can do that I think it will be a very powerful strategy, but until then, I continue to feel as you stated below...
but when you look at the money available in the fx market every day and constantly losing, it just works on a person.
Man, can I ever relate to that!
Anyway, sorry to take you on such a long detour but I always find market movement an interesting topic... Now maybe I'll go play with RSI a little...