Gann, Elliott Wave, Day Trading: Trading Techniques to Avoid

“Essentially, whatever you find will be as true 10 years from now, 20 years from now, 30 or 50 years from now as it is today and as it was 50 years ago. And if you can put your finger on those truths, then you’ve made a contribution.”
Jim Collins

“In any case, thanks for a great site and a lot of useful information. I just like to read the sarcastic pages on how uninformed people have no clue that highly paid professionals have no clue either. It is worth publishing a book. Merci beaucoup.”
Edmond (web visitor)

There are literally thousands of trading approaches promoted online and offline. Below are examples of trading approaches that the world’s best trend followers avoid within their trading systems:

  • %R Oscillator
  • Astrology
  • Candlesticks
  • Cycle Prediction
  • Delta Moon Prediction Techniques
  • Elliott Wave
  • Fibonacci
  • Fuzzy Logic
  • Gann
  • Genetic Algorithm
  • Geometric Angles
  • Golden Spiral
  • Granville’s On-Balance Volume
  • Island Reversals
  • Moon Phases
  • Neural Networks
  • Planetary Motion
  • Point and Figure Charts
  • Relative Strength Index
  • Seasonality
  • Support/Resistance
  • Weather
  • Proper thinking about entry/exit…

It is guaranteed, for example, legendary trader John W. Henry is not using Planetary Motion to determine when to buy or sell and more importantly how much to buy or sell.

Pattern Trading

These patterns are the world of CNBC analysts. Top trend following traders understand so-called “predictive patterns” are not the key to success:

  • Reversal Patterns
  • Continuation Patterns
  • Head and Shoulders
  • Symmetrical Triangles
  • Inverse Head and Shoulders
  • Ascending Triangles
  • Triple Tops
  • Descending Triangles
  • Triple Bottoms
  • Double Tops
  • Double Bottoms

Support and Resistance

What is support and resistance? One marketing pitch:

Support, resistance, and trendlines are at the very heart of technical analysis. That’s because they’re based on the basic economic principles of supply and demand. The tools you’ll receive in this package give you a consistent and objective method of determining where these lines should be drawn on your charts. Implement the principles of supply and demand in your chart analysis and develop a consistent and objective method of placing lines on your charts.

Support and resistance is the heart of technical analysis? Learn how to draw trendlines? Trend followers do not do this. Trend followers work within the here and now. They make decisions based on today’s price. Support and resistance might make for a good story in a magazine, but there is no basis to believe that it is anything more than another futile attempt at prediction.

Trend Following Products

Review trend following systems and training:

Michael Covel Trend Following Products
Michael Covel Trend Following Products

More info here.