Mapping Your Voyage of Discovery - CQG.com

Entry Signal EvaluatorWhy it is an essential tool in your education and understanding of Technical AnalysisIt is difficult for me to explain fully, how important and useful this tool is without soundingsomewhat evangelical. Both new and experienced traders normally embark on a voyage ofdiscovery, dictated by what they have either read (normally Murphy’s guide to technicalanalysis), seminars they have attended, or exams they have taken. Whilst the officialcourses run by Technical Analysis societies around the globe are useful in providing abackdrop and framework to traditional methods, they are essentially reference guides. Inmany ways, the core values of Technical Analysis and what is perceived to be important anduseful to the trader haven’t changed in thirty years. Do you think that the markets haven’tchanged in thirty years? Of course, they have, and in recent years dramatically so.It is prudent and wise to take any established mantra or any technical idea you have and dothree things.1. Test its basic accuracy2. Visualise data and the study’s outputs3. Decide whether this fits in with your event horizon (how long does a trade last)and the type of trader you think you can be a success at.This process is time consuming, but that’s all it costs you: TIME. Blindly accepting theestablished clichés and mantra’s and applying this to real money is usually a ruinousprocess. The markets and the methods you employ that have not been fully understood willlead to the result that markets and the methods employed can remain irrational far longerthan you can remain solvent. Either that, or you abandon the method and start the voyageof discovery once more, without having any idea that the sequence of losses where entirelywithin the normal variation of what that method was.