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Author Topic: Chart reading.  (Read 2311 times)
Seal
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June 04, 2012, 07:45:25 AM
 #21

Is chart reading much different between forex and individual stocks? I ask as I'm keen on learning programmatic chart trading however from what I've read on various forums, a lot differs between forex and individual stock.

What does bitcoin follow more closely?

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June 04, 2012, 07:57:09 AM
Last edit: June 04, 2012, 08:20:31 AM by nimnul
 #22

It's important to understand that in retail Forex (and Zhoutong-style trading) there is no market. You are playing not against other people and institutions but against a market simulator casino machine.

In contrast, it is widely believed that at MtGox we have a real market and not mere simulator.

So you should differentiate between retail Forex, real interbank foreign exchange, and stocks (which I hope are usually real markets and not simulations).

As for programmatic reading I suggest you to seek for research papers in quantitative finance about price modeling and don't bother learning the usual black magic fortune telling (Elliott waves etc) taught at retail Forex shops.

Here is a basic course: http://www.algorithm.cs.sunysb.edu/computationalfinance/

The course mentions Elliot waves as "The popular (but mystical) Elliot Wave Theory" - see the detailed overview of common spiritual practices in http://www.algorithm.cs.sunysb.edu/computationalfinance/pdf/lecture20.pdf there.

Note however that you cannot avoid the black magic in trading. It is just that learning from scientific sources lets you be focused on evidence and not on "trader's intuition" in evaluating quality of your black magic trading algorithm.

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