Does a trading strategy becomes obsolete? - page 3.

Wind_FURY

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Quote from: bittraffic on December 23, 2022, 10:42:32 AM

Quote from: Wind_FURY on December 23, 2022, 06:58:10 AM

Quote from: Woodrose on December 19, 2022, 11:10:47 AM

I am trying to learn more about trading strategies specially in Technical Analysis. Upon trying different indicators, it comes to my mind that indicators might become an obsolete one day.

Just imagine if all of us knows how to use RSI and MACD. We all know when it is overbought or oversold. Therefore, we already know as well when it is good to enter and exit in market. Since we all knew about, RSI is not a good indicator anymore and many of us will find a new indicator that will provide us more details than the latter one.

Now, many Trading Gurus are teaching the best strategy to use. Wherein fact, strategies are becoming obsolete as time goes by. If you are new in trading world, definitely you will be eaten by those traders who know a lot in trading.

I believe it's cyclical. If a trading strategy has become very popular, its effectiveness will be not as much because the trades taken by such a strategy will be "over-crowded", and over-crowded trades will have a lot of "counter-trades" in the other side of the orderbook. Once the trading strategy's effectiveness is not as much, its popularity will become lower, and once it becomes lower, it's effectiveness will go up again. A cycle.

Overbought and oversold strategy is very popular, many traders indeed use it on the longer time frames which I believe works best that way like the weekly chart. The more traders use it, I think triggers a bull market especially when they all buy at the oversold level and hold it.

Using the strategy on leverage trading is what I actually wanna try more but I don't have the courage to do it all the time so because I'm too scared to lose quickly when the market goes in the opposite direction.

It's very popular, and often causes you to make the wrong decision during strong or weak markets. "Wrong decision" in terms of selling too early. During bull markets when the surge is strong, many "traders" who strictly follow Overbought/Oversold oscillators have the tendency to sell early because when RSI reaches 80, they sell. But the price continues surging more. It's probably also the same on the opposite direction when the price is crashing.

ShowOff

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Quote from: pawanjain on December 23, 2022, 10:55:55 AM

That is a very tough question to answer because the market behaves differently on many occasions.
Although we know that RSI is an easy indicator that tells us when the market is overbought or oversold yet we sometime tend to take wrong trades.
Yet the market goes in the opposite direction than we predict. This is why many lose money.
Experience is much needed when it comes to trading. Indicators play a supporting role in our trading journey.

Among the many reasons why I don't like trading, I think your explanation I quoted is one of them. The market is never certain, it can move in the opposite direction than expected, and all of that makes me prefer investing over trading.

Of course many people will continue to trade regardless of whether they are an expert or not. Knowledge and experience will play a part in doing so, but success is highly uncertain. I can only say long term investing is still a good option for people like me, but that's not a problem at all.

pawanjain

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Quote from: Woodrose on December 19, 2022, 11:10:47 AM

I am trying to learn more about trading strategies specially in Technical Analysis. Upon trying different indicators, it comes to my mind that indicators might become an obsolete one day.

Just imagine if all of us knows how to use RSI and MACD. We all know when it is overbought or oversold. Therefore, we already know as well when it is good to enter and exit in market. Since we all knew about, RSI is not a good indicator anymore and many of us will find a new indicator that will provide us more details than the latter one.

Now, many Trading Gurus are teaching the best strategy to use. Wherein fact, strategies are becoming obsolete as time goes by. If you are new in trading world, definitely you will be eaten by those traders who know a lot in trading.

That is a very tough question to answer because the market behaves differently on many occasions.
Although we know that RSI is an easy indicator that tells us when the market is overbought or oversold yet we sometime tend to take wrong trades.
Yet the market goes in the opposite direction than we predict. This is why many lose money.
Experience is much needed when it comes to trading. Indicators play a supporting role in our trading journey.

bittraffic

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Quote from: Wind_FURY on December 23, 2022, 06:58:10 AM

Quote from: Woodrose on December 19, 2022, 11:10:47 AM

I am trying to learn more about trading strategies specially in Technical Analysis. Upon trying different indicators, it comes to my mind that indicators might become an obsolete one day.

Just imagine if all of us knows how to use RSI and MACD. We all know when it is overbought or oversold. Therefore, we already know as well when it is good to enter and exit in market. Since we all knew about, RSI is not a good indicator anymore and many of us will find a new indicator that will provide us more details than the latter one.

Now, many Trading Gurus are teaching the best strategy to use. Wherein fact, strategies are becoming obsolete as time goes by. If you are new in trading world, definitely you will be eaten by those traders who know a lot in trading.

I believe it's cyclical. If a trading strategy has become very popular, its effectiveness will be not as much because the trades taken by such a strategy will be "over-crowded", and over-crowded trades will have a lot of "counter-trades" in the other side of the orderbook. Once the trading strategy's effectiveness is not as much, its popularity will become lower, and once it becomes lower, it's effectiveness will go up again. A cycle.

Overbought and oversold strategy is very popular, many traders indeed use it on the longer time frames which I believe works best that way like the weekly chart. The more traders use it, I think triggers a bull market especially when they all buy at the oversold level and hold it.

Using the strategy on leverage trading is what I actually wanna try more but I don't have the courage to do it all the time so because I'm too scared to lose quickly when the market goes in the opposite direction.

KingsDen

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Quote from: Woodrose on December 19, 2022, 11:10:47 AM

I am trying to learn more about trading strategies specially in Technical Analysis. Upon trying different indicators, it comes to my mind that indicators might become an obsolete one day.

Just imagine if all of us knows how to use RSI and MACD. We all know when it is overbought or oversold. Therefore, we already know as well when it is good to enter and exit in market. Since we all knew about, RSI is not a good indicator anymore and many of us will find a new indicator that will provide us more details than the latter one.

Now, many Trading Gurus are teaching the best strategy to use. Wherein fact, strategies are becoming obsolete as time goes by. If you are new in trading world, definitely you will be eaten by those traders who know a lot in trading.

Trading strategies don't go obsolete but it is the market that changes. The market is becoming more dynamic daily, so at a point the market will tend to defeat your strategy and at another point, the market will obey your strategies .
That is why it is good to always test your strategy and also have alternative strategy incase market rejects the one you hope on.

Wind_FURY

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Quote from: Woodrose on December 19, 2022, 11:10:47 AM

I am trying to learn more about trading strategies specially in Technical Analysis. Upon trying different indicators, it comes to my mind that indicators might become an obsolete one day.

Just imagine if all of us knows how to use RSI and MACD. We all know when it is overbought or oversold. Therefore, we already know as well when it is good to enter and exit in market. Since we all knew about, RSI is not a good indicator anymore and many of us will find a new indicator that will provide us more details than the latter one.

Now, many Trading Gurus are teaching the best strategy to use. Wherein fact, strategies are becoming obsolete as time goes by. If you are new in trading world, definitely you will be eaten by those traders who know a lot in trading.

I believe it's cyclical. If a trading strategy has become very popular, its effectiveness will be not as much because the trades taken by such a strategy will be "over-crowded", and over-crowded trades will have a lot of "counter-trades" in the other side of the orderbook. Once the trading strategy's effectiveness is not as much, its popularity will become lower, and once it becomes lower, it's effectiveness will go up again. A cycle.

palle11

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Quote from: Natalim on December 23, 2022, 05:53:55 AM

These trading strategies that OP mentioned can only be obsolete when no one becomes a trader. Strategies can be improved in other ways but it doesn't mean that the old strategies are already useless. Traders have their own strategies, sometimes they created their own but guess what, it was mostly just a twist to the old one. We can say that the foundation is from the old one meaning traders still give value to them even though they are not using it literally.

Trading is a knowledge built together and as they say no knowledge is lost or useless so also trading strategies. Like you said, old strategies can be reformed into new one to fit into the current challenges in the market. This how strategies are built and it becomes new one especially if it has taken care of the laspes in your trade that is causing you losses. No trader likes to lose so they find ways to make their trading ability better. You build from old strategies to reform it into current challenges of the market.

Natalim

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Quote from: BinarySumo on December 23, 2022, 05:18:13 AM

Interesting question! My answer is maybe. A trading strategy can become obsolete if the market conditions or the trader's goals change significantly. So, it is important for traders to continuously reassess their strategy and make adjustments as needed in order to remain relevant and effective.

However, it is not necessarily the case that a trading strategy will always become obsolete, as some strategies may continue to be successful over longer periods of time.

These trading strategies that OP mentioned can only be obsolete when no one becomes a trader. Strategies can be improved in other ways but it doesn't mean that the old strategies are already useless. Traders have their own strategies, sometimes they created their own but guess what, it was mostly just a twist to the old one. We can say that the foundation is from the old one meaning traders still give value to them even though they are not using it literally.

BinarySumo

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Interesting question! My answer is maybe. A trading strategy can become obsolete if the market conditions or the trader's goals change significantly. So, it is important for traders to continuously reassess their strategy and make adjustments as needed in order to remain relevant and effective.

However, it is not necessarily the case that a trading strategy will always become obsolete, as some strategies may continue to be successful over longer periods of time.

Ziskinberg

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Quote from: Woodrose on December 19, 2022, 11:10:47 AM

Now, many Trading Gurus are teaching the best strategy to use. Wherein fact, strategies are becoming obsolete as time goes by. If you are new in trading world, definitely you will be eaten by those traders who know a lot in trading.

We don't need to compare ourselves as a beginner to experienced traders as they know a lot of things and even created their own strategies unlike us newbies who just keep relying on what we saw and read online, and these gurus. We never say these strategies become obsolete in the future as we don't have a strong basis for them. Maybe it was acceptable to say that there are other strategies but when it talks about TA, you will never imagine how important it was, it only differs from the person who uses it and creates different results.

sulendra12

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Quote from: Woodrose on December 19, 2022, 11:10:47 AM

Just imagine if all of us knows how to use RSI and MACD. We all know when it is overbought or oversold.

Sure they know how to use those strategies. But actually the result differs between each person trades the cryptos.
The result is different because of how people manage their emotions, their economy factors, how they interpret the strategies itself. They know the theory but once they do it by themselves, some of the lost.

Quote from: Woodrose on December 19, 2022, 11:10:47 AM

Therefore, we already know as well when it is good to enter and exit in market. Since we all knew about, RSI is not a good indicator anymore and many of us will find a new indicator that will provide us more details than the latter one.

That's why we have so many strategies and use it based on our playstyles. Your strategies may not work for some of us and the opposite.

irhact

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Quote from: maydna on December 20, 2022, 11:34:24 AM

I agree that one day a strategy can become obsolete due to developments in the market. To anticipate this, we must continue to learn and trade. It is a learning process that does not stop unless you really stop trading.

You're right, to be successful you must learn to evolve and in the cryptocurrency market, the market steadily does evolve regularly so you'll have to evolve with it. Anyone that think one particular strategy will work for him or her during her trading lifespan is on the path of falling. It could work for something but sooner or later, it'll become obsolete.

Just like trading, in investing in coins we noticed that they have different trends in different times of the market. When it isn't a low cap gem period, you don't invest in those types of coin instead you go for the blue chip or you lose your investment.

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Quote from: Woodrose on December 19, 2022, 11:10:47 AM

I am trying to learn more about trading strategies specially in Technical Analysis. Upon trying different indicators, it comes to my mind that indicators might become an obsolete one day.

Just imagine if all of us knows how to use RSI and MACD. We all know when it is overbought or oversold. Therefore, we already know as well when it is good to enter and exit in market. Since we all knew about, RSI is not a good indicator anymore and many of us will find a new indicator that will provide us more details than the latter one.

Now, many Trading Gurus are teaching the best strategy to use. Wherein fact, strategies are becoming obsolete as time goes by. If you are new in trading world, definitely you will be eaten by those traders who know a lot in trading.

You are mixing two different concepts which are a strategy and an indicator, indicators can be part of a strategy to trade the markets but they cannot be a strategy by themselves, indicators like RSI and MACD are just formulas and they are as effective today as they were when they were created, so they cannot become obsolete as they are simply making more obvious to the trader a certain aspect of the markets.

However strategies can indeed become obsolete, especially if they are based on flawed ideas about the markets, however strategies which are based on a very solid understanding of the markets will most likely be effective forever.

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Quote from: karabiber on December 21, 2022, 04:21:21 PM

Indicators used when investing in the stock market are used to analyze the historical data of the markets and to predict future price movements. These can be used for different purposes such as spotting trends, measuring momentum and measuring volatility. These indicators can help traders better understand market conditions, but each has its own advantages and disadvantages. Therefore, when deciding which indicator to use, it is important for traders to choose the one that suits their goals and strategies. For this reason, I don't think it will be an outdated indicator. It just has to be fit for purpose.

And it places a very important role when trading. This means that there is no way it becomes obsolete unless trading is no longer a profitable place to stay.
We might see some upgrades on the strategies we used and its diversification or a twist to the original way as this might be needed in order to cope with the market trend changes. But in general, trading tools remain effective depending on the trader who uses them. Might OP just tell us it was obsolete it is maybe because he is not a fan of using it?

karabiber

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Indicators used when investing in the stock market are used to analyze the historical data of the markets and to predict future price movements. These can be used for different purposes such as spotting trends, measuring momentum and measuring volatility. These indicators can help traders better understand market conditions, but each has its own advantages and disadvantages. Therefore, when deciding which indicator to use, it is important for traders to choose the one that suits their goals and strategies. For this reason, I don't think it will be an outdated indicator. It just has to be fit for purpose.

AakZaki

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it's easy to say that indicators will be obsolete everyone will know how to use indicators, but in reality it will not be that easy. it's not just a matter of technical analysis indicators that play an important role in trading is psychology, everything will be influenced by psychology. No matter how good their technical analysis is, if psychology is not stable and easily panicked, the strategy will fail. Remember that technical analysis is not just about the RSI and MACD, but there is much that can be combined.

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Quote from: harizen on December 20, 2022, 06:35:42 PM

The market is unpredictable, therefore what indicators really indicates is obviously not 100% accurate will happened. Even if we know how to determine if it is overbought or oversold, do you think the majority will do the necessary actions to take advantage of that market scenario?

Our winning actions depend on our own approach to a given market situation.

It's useless that we know how to analyze something but in return no actions on our part.

Yes, that's right, the role of the indicator only helps to see the next price movement, and does not mean that it can be completely true because there are still factors outside of this (indicators) that must also be considered. Indicators make it easier for us to see what will happen in the future and with that we can determine what steps we should take after using the indicators we use.
Technical analysis is one that can be used to analyze market movements. This is one important part that should not be forgotten in my opinion.

xSkylarx

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It doesn't mean that if it is already overbought or oversold, it would be going to other way. There are still instances that RSI and MACD are saying it, but still, it will continue to its direct. Indicators are only guiding us to predict its movements. Indicators will stay forever as long as trading exists because most professional traders use them, it is used like signals for them or confirmation of their strategy. Also, it is very useful to us traders unless you are a naked trader that wants a clean chart.

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Quote from: palle11 on December 20, 2022, 08:25:44 AM

Quote from: inthelongrun on December 20, 2022, 07:56:53 AM

But big news like the bankruptcy of FTX is probably the best and most reliable indicator.

Funny you here. What do you really mean ? So which direction are you expecting the price to go from your analysis of the FTX exchange scam? Yes investors expected that price will drop but yet we are not seeing that happen so far. So what is your analytical expectations of FTX scam from what you see and your prediction from it buddy? Grin

Yes, it is funny because it seems someone was not able to comprehend my message. Big news isn't a technical trading indicator but it can drive the market crazy and will always destroy TAs.

Are you even following the market mate? Have you not seen the market reaction when discrepancies were found on FTX and Alameda? And when CZ declined the buyout? Even the current market situation is still under a kind of domino effect with exchanges in the hot seats including Binance the largest crypto exchange.

Woodie

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It's really difficult to answer this question because it's a Yes and no answer as most of the strategies out there do work well if you have a grasp and understanding of what parameters need to be seen before executing a trade. And In terms of being Obsolete, well once upon a time we had people trading with moving averages only and traders weren't as profitable as they thought they would and most moved on to support and resistance and same thing helped and have moved on to supply and demand which could suggest that some strategies do become Obsolete.

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