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Monday, 12 May 2014

Trinity of Technical Analysis Trading

In trading, the trinity are:

1) Price

2) Volume

3) Time


With the combination of these 3 basic components, we get all the myriad technical indicators out there.

Show me any technical indicators out there that do not use 3 of the above components.

You may ask, "What about Point and Figure charting? Where's the time component?"

And I would counter,  "Yes, there's not time axis per se;  but look at the P&F chart again. If there's no time, how do you spot the trend change?"

Science quiz: If there's no movement, how do we tell time?



I read this "goldfish" story many years ago. Can't remember from where so can't give accreditation. And by the way, I will "embellish" this story in my SMOL style as usual. I don't do copy paste well; I often add pepper and salt according to taste.
   

A professor asked his students to write a paper to describe how goldfish swims. 

Most students would engage in academic research in the libraries and start to write "copy with pride" thesis on how goldfish swims (using other people's reflections and conclusions).

Some students will research by watching documentaries on how goldfish swims (using other people's observation).

Guess what? The professor brought in a fishbowl with a goldfish in it on the day of paper submission and asked his students:

"How many of you actually looked at a goldfish to see how it swims?"


Now this is coaching! 

Make a wild guess what this goldfish story is all about?



Something to reflect upon if you are befuddled by the charts and indicators you are currently using.  





41 comments:

  1. so does this means, if i'm the student, i will submit a fish tank with a gold fish in it?

    "er, ask the gold fish, why ask me? i'm not the gold fish so i can't tell you the truth"!

    ReplyDelete
    Replies
    1. coconut,

      Don't look at me. I'm just a story teller; never advanced beyond O' levels...

      Ask those who have been to tertiary institutions ;)

      Delete
    2. talk about that, i like to congrate er my daugther, she had been acccepted by NUS for her tertiary education, she just graduated from her deploma course, i heard it was not easy.

      Delete
    3. her moto is "work is a modern salvery".

      i think she has more lose screw than i have haha..

      Delete
    4. coconut,

      Congratulation!

      Only the top few percentages of our poly grads can get into our local U each year.

      You must be a proud dad :)

      That's an interesting motto for a young girl... Great start!

      Delete
    5. yes i am! for a dad who never step into higher education.

      if its not my language, especially my chinese, i would have....

      forget it!

      Delete
    6. forget it! its not me alone, all my batch, all those chinese educated one, none so far had made it into U!!

      Delete
    7. coconut,

      I will write a post on the forgotten generation of Chinese educated Singaporeans one day.

      My mind talks in English; but my heart sings in Mandarin.

      You have pricked a deep embarrassment of mine for having studied at Hua Yi Primary School (English stream), but not realising the deep significance of the name Hua Yi (华义) until a few years ago the Chinese papers reported on the 55th anniversary of the Hua Yi Secondary School which was Chinese stream during my time.

      I've been too banana growing up. Since coming back, I've only read the Chinese papers. Never too late to restore the balance ;)

      Delete
    8. oh thank you.

      i heard that our PM was also a chinese educated but later switch to english.

      i was top in my primary but i too wanted to switch to english stream for my secondary but was discourage by the principle, saying i will not be able to catch up. i should have insisted but was too young to understand the complication.

      well, at the end, every one still have to face their altimate nightmare which is the GP paper in JC, non of my classmate in Duman high make it to the U, what a disater! i was flang out earlier haha.

      Delete
  2. The Trinity is same like RGB. You are your own artist.

    You mix and match whatever color you like. When you love it. You call it Art!

    When more and more people like it. It is a master-piece for selling to mass!

    LOL!

    ReplyDelete
    Replies
    1. i only know GRB,

      gramma ray burst!

      Delete
    2. CW,

      You may know your photography, but you don't know your ABCs in painting ;)

      The primary colours of photography and TV are Red, Blue, Green. These are additive combinations of colours.

      The primary colours of painting and printing are Cyan, Magenta, Yellow. These are subtractive combinations of colours.

      Laymen will say Red, Blue,Yellow as the primary colours.

      That's how those "inside" the circle will tell who are "outside" the circle ;)


      I blind cat caught dead mouse - I casual Photographer and once upon a time Art Club member :)

      Delete
    3. er sorry, i colour blind, no comment.

      Delete
    4. but hey, i knew smol knew something about photography, the stupid bird remember!?

      Delete
    5. Allo!

      How many more "disabilities" do you have!? Dyslexia, monolingual, no screws, and now colour blind!!!

      Your wife must be smiling secretly that her dominant genes have triumphed over yours!

      Your daughter lucky she got your screw loose loose. Now that's good! Phew!



      Delete
    6. my biggest concern for my dauther is not her education, its her marriage!

      she might not be colour blind and the others but she is a carrier!

      son like mom and daugther like dad, thats pattern recognition!

      Delete
    7. did i mentioned slip disc?

      hey! i show hand already, now you come clean also...

      Delete
    8. coconut,

      I thalassaemia minor.

      Powderful word for hereditary anaemia.That's why Pes C in NS. Lucky break or what!?

      I also carrier.

      If my future wife also thalassaemia minor, we need to go for counselling... We have 1 in 4 chance to produce an offspring that's thalassamia MAJOR - now that's no fun... Monthly blood transfusions and unlikely to live beyond 20....

      Like you, I am "damaged" goods.

      You think why I have a soft spot for you and the tulip girl trader with Asperger Syndrom?

      Oh well... Cannot be Master Race not the end of the world. Can be grasshopper mah!

      Delete
    9. in playing snooker, i usually have to change the brown ball to a very bright brown one, otherwise i might mistaken it as a red colour! haha.

      Delete
    10. wow hahaha, no need so clean la haha.

      how do i know what blood or other internal problem i have? on the surface will do haha.

      Delete
    11. in gambling, we call table money only haha...

      Delete
    12. Oh great!

      You've stopped stripping.

      I'm down to my last underwear, and praying hard you would stop sharing....

      My bad. I was the one who asked. LOL!


      On the surface I'm one sexy guy!

      Provided you look past the bald head, that protruding paunch, and the toad face.... Other than that, I'm flawless ;)

      Delete
    13. haha ya nature is fare isn't it, #^%*^&$...

      Delete
    14. i'm good at sports but it never gives me a flawless body!

      Delete
    15. Hee hee,

      Don't be jealous. Nature not fair mah.

      And to rub in in, my face skin "boink" boink".

      I never use SKII some more.

      Talk "male-chicken" free one what!

      Delete
  3. smol, technical indicator, use them but never believe in them.

    best is use a few different indicator (no similarity) so that you don't rely too much on one.

    ReplyDelete
    Replies
    1. coconut,

      I don't use any technical indicators at all. I am price action (tape reader).

      The advantage of corporate life is there are so many psychological tests done on us (HR too free). One of my strong learning trait is Observation.

      I'm a "bird-watcher". Price action suits me.


      Delete
    2. ok, when you look at price, you are not looking at price, you look for relative prices or price relationship.

      in another words, you look at a group of prices that are co-related, see the similarity and the differences and trade accordingly.

      Delete
    3. what then, you find them and look at them for say a year, see whether you can spot anything or not.

      if you can't see anything, time to quit trading.

      Delete
    4. Hmm...

      Your hokkien kenna sia also. "Ah ber then" is rhetorical.

      Oh! You dyslexic, I take it back.

      Delete
    5. look for patterns, repeating patterns understand?

      when we say patterns is not just chart patterns only, any pattern as long as its repeating!

      Delete
  4. Hi SMOL,

    If there's no movement, we can look at the amount of radioactive isotopes to tell time. These occur naturally and they decay over time, so we can do carbon dating. I think if I've to change the question (but retain the essence), it'll be this: how do we tell time if there's no changes? I don't think we can.

    You old school tape reader is it? Lol

    ReplyDelete
    Replies
    1. Thanks LP!

      I remember watching a documentary on the changes/movements of mountains, lakes, and canyons. Time as a concept does not exist if everything stays exactly the same. Interesting right?

      Unfortunately, decay and erosion are both quite evident on my otherwise "flawless" body :(

      I very old school.

      Just yesterday someone laughed at me for still buying soap? Huh? He laughed that everyone now uses soap dispenser...

      I carry handkerchief too. It's a gentleman thing.

      LOL!

      Delete
  5. Hi SMOL,

    I realised long long time ago that if we stay fixed to our habits, eventually we're become fashionable. Used to have thick specs, but that was unfashionable in the past, and becoming so fashionable these days. I wore a casio watch I had from army, but now I had people asking me where to get it because it's so retro and cool!

    Keep your old school ways...eventually you'll be on the fore front of fashion way before anyone does, simply because you kept doing things your own way :)

    ReplyDelete
    Replies
    1. LOL!

      I nearly fainted when the DJs announced 80s music as "oldies!? What the...

      Wait long enough, orbid becomes fashionable!?

      Thanks! I not old fashion; I'm ahead of my time!

      Delete
  6. in investing, there is such thing as goldfish method har

    i blur liow

    i thought the listing of the various methods of investing are already so intriguing from the following website :-

    http://opposethetrend.blogspot.sg/2013/11/just-for-laugh-method-of-investing.html

    and now, there is a goldfish analogy for investing!!!

    ReplyDelete
    Replies
    1. Money Honey,

      That's how a story of earthworm and little chick can turn into dragons and phoenixes if its told and repeated by more people...

      It's simply Price Action or Tape Reading.

      If now I want to sell courses, I will call it the Siam Fighting Fish technical analysis method and copyright it. LOL! (Wanted to call it Guppy but it's already taken)

      A rose by any other name is still a rose.

      Delete
  7. No matter how i try to look at technical charts, even though it seems historically there is a pattern, i just couldn't believe in it that it can repeat the same the next moment. If it does at times, it seems to me just a coincidence. i suppose i am lousy at short term trading with charts (the so called-PVT).
    I meant no offence, my apology if anyone is offended.

    ReplyDelete
    Replies
    1. temperament,

      It's like spirituality. We believe what we want to believe; don't believe no amount of saliva will change our minds.

      I'm agnostic, and likes to fly with BOTH wings.

      Fundamental analysis is better at evaluating what stocks to buy. Technical analysis is better at discovering at which price to buy (and sell).

      Those who ask in forums this stock can buy? (Weak in...?)

      Those who ask at this price can buy? (Weak in...?)

      Those who ask above 2 questions at the same time? (Why DIY?)

      Delete
    2. temperament, the cheese cake got 3 layers, thats why it takes 3 days to be ready to eat! but making time is very short only, i think not so complcated la (otherwise my wife wouldn't be able to make haha)..

      Delete

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