Turning points of time or price; forecasts, predictions, and target prices are on the wish lists of most traders. We get such requests frequently — can you build some kinds of forecasts in the software? We want to briefly address these topics from a point of view of a trend-following method.
AbleTrend method only knows the past and now. The most significant difference of AbleTrend from “Forecasts,” “Predictions,” or “Targets” is that all the signals of AbleTrend just try to tell you what was observed and analyzed from the historical and current market data. It is not a prediction for anything. It just converts the market’s movement to straightforward language: the trend direction — up, down, or sideways — and the location of the key support or resistance. Here is an example of today’s E-mini S&P day trading chart:
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AbleTrend software acts on the facts of what the market is actually doing, not on any assumptions or predictions. To show you why this is important, I will now compare the AbleTrend method with other methods that involve “Forecasts,” “Predictions,” “Targets,” etc. that they claimed could reveal the future. This will help you distinguish the major differences between the methodologies.
In a typical two-dimensional chart, the X-axis represents time, and the Y-axis represents price. A point is defined by the two values (X, Y). If you know the “turning point” for one of the values, time or price, then you already have the key information for how to trade the turning point. You don’t need to know both values of a turning point in trading. Knowing one value is good enough for a trade.
Being able to forecast or predict market movement has always been a dream to most traders. Over the years many theories have been developed for “cycles” and “wave projections” that could predict market turning points and project target prices. Unfortunately, these methods do not work in practice. Why don’t those forecast methods work? As Larry Williams said, “Eventually, I realized that God does not want us to see the future. It is as simple as that.” and he added, “God with infinite wisdom, does not want us to know much about the future and for sure very little about the future of futures.” (Williams, 1999).
Most of the forecasting methods are purely based on arbitrary assumptions. Two famous examples are Elliott waves (Elliott, 1980) and Gann projection (Gann, 1951). Everyone wishes they owned a crystal ball that can foretell the future. But do you really believe such a crystal ball exists?
In the upcoming blog we’ll elaborate on four reasons why these forecasting methods do not work in the real world.
The best way to learn a skill using trading software is by practicing it. Though the webinars and free one on one trading sessions will help you to prepare for actual trading on the live markets, it will not tell you how your psychology will react to the experience. This insight is gained only through experience, so give AbleSys trading indicators a try today. To get extra 10% off for AbleTrend 7.0 30-day trial, here is the code: WTMF10 (order online).
You may also learn more about AbleTrend on our blog: blog.ablesys.com
And watch archived sessions from our introductory and member’s webinar series:
Click here to view our youtube page
I welcome your feedback. Did you like today’s message? What other topics would you like to see? Please let me know at gracezh@ablesys.com
If you are an AbleTrend user this is a great time to share and introduce this great tool to your family and friends for the prosperity of 2016 and the years to come.
Happy Holidays!
Grace Wang
AbleSys Corp.
gracezh@ablesys.com