The short answer is “No”.
No trading system can.
The question is asked, because a lot of traders were short last week and found ‘n’ methods and indicators which told them to be short in the market. Some of these were trend lines, divergences, patterns, waves and of course our very own profile charts from your’s truly.
Noticeably, I do not think any of the moving average methods pointed to a short in the market, thus explaining their lagging nature, but that’s the topic of a discussion another day.
Whilst a lot of traders are understandably elated in getting the short right, one must make a distinction between those who anticipated the market to move down and those who predicted.
The people who managed to predict were lucky, but would not live for a lot of years in this market. Those who anticipated the market are the smart traders of today, who would have an edge in their trading careers always.
What is the difference?
A trader who predicts a market ( through x, y, z indicator) would never try to explain the reason for the indicator to fail, should it fail or have a fallback method to rely on. Instead he would use some other indicator to justify the reversal. An anticipatory trader would have a fallback plan ( akin to a stoploss) should his original plan not work. It’s a game of probabilities after all and I have to still meet a trader who got all his trades right!
So when we were musing and anticipating on wednesday, for a move to 5860 to begin, our fallback was “If I am wrong about this, then NF should stabilize above 5940”.It never went above 5940.
That’s anticipation.
Have a great weekend.
