Price Action Only

[atto 20]

As Db has said, if you want to spend that kind of money on a program, there will be ample vendors to fill your need. But, it's completely and utterly unnecessary, and most likely counterproductive. The information found here would be quite likely far more valuable to you than any program, system, method, etc for sale right now. Before trying to fit a method to capture alpha, attempt to understand price action (what makes it move, why it moves, who moves it, etc) before trying to exploit it. And then, once you have an understanding of price, exploitation will be much simpler.

 

Vendors usually disagree with me.

[tune 10]

The information found here would be quite likely far more valuable to you than any program, system, method, etc for sale right now.

 

I could not agree more. Do yourself a favour and give this place a fair trial.

[HAKUNA 10]

PRICE ACTION,I am on the quest to rid myself of indicators.Since i have been trying a method using Stochastics & inside candles, with S/R, Double tops, Bottoms & Fib.Have not been as profitable as when i was using 3 MA, Bol. Bands, RSI, Macd.The impulse is to revert back & add indicators {of which I have,2 MA}.Has it been successful? No.So I am reading Wychofs book[ThanksDBPhoenix} & also have read Tom Williams insightful book on the Tradeguider site.If i could afford there program,as a novice it seems the way to go, I would .But $2995.00 is a bit much.

 

I use VSA without jargon , it is not necessary to purchase the software at all, if in doubt, take advantage of their trial (30day) but watch out, to get the refund you have to get the CD back well before 30days are over. that is the catch. The so called VSA signals work 50% of the time and can appear on one time frame and be absent on another time frame for the same instrument. All you need is a normal charting package and data service , a chart with price and volume.

[DbPhoenix 42]

I should also point out that there are a number of real traders trading in the chat room, in real time, and they are more than happy to answer questions (though perhaps not immediately since they are after all trading). Just click "chat" in the toolbar at the top of your screen.

[metalhead 10]

I should also point out that there are a number of real traders trading in the chat room, in real time, and they are more than happy to answer questions (though perhaps not immediately since they are after all trading). Just click "chat" in the toolbar at the top of your screen.

 

Looking forward to trying that out next week after the holiday.

 

Happy Holidays everyone!

[bennie 10]

Hi All,

This is my first post here. Thanks for all your writing in this forum.

Since I am green, really green on the whole stock trading my 2 cents want count very much but I gladly share them anyway.

I know, :crap:

This is actually my 3rd time playing with stocks but I don't count the first 2 times since I only lost money, very little, since I had only $500.- account in the first place. Now I have 5 cents more, maybe 10.

Anyway, I still learned something, do not trade pink sheets :doh:

How is the market now?, I looked at it and found the ~$160.- stock 6~12 month ago down to the penny-stocks (pink). My thinking was hmmmmmm, if the stock is ~50 cents, traded on NYSE or Nasdaq why don't you just buy some. Look what the lowest/highest already was in the last 12 month just as a reference. Then look what is it right now, then without consulting anything, I make a limit order for about 5cents lower then it is, sometimes even 10 cents and walk away. Comes afternoon I check if the broker bought it for me and sometimes yes and sometimes no, therefore there will be a other day tomorrow. Seems to work more times then expected. Reverse, now I got the stock, I look in the morning make a limit order to sell for 10 cents more and wait. Sometimes it takes 2~3 days limit orders before it sells but, it sells. Usually I buy 10k shares and it makes money too.

Now broker has trailing stops I can use so I just let it follow sell when it pulls back below 2~3% of the high and I am done with it.

Never looked at anything, just whenever I feel like. I came to this forum because I taught it can't be that simple, I guess phase 2, where I don't want to believe in simplicity.

I think all the real good traders just have a nag (or gift) for numbers and know when what to buy or sell. They may say that they use this that or there but probably it is there ability to "see" it.

Do I have that? I wish I could say yes but I don't think so.

The market is just cheap with a lot of good stocks gone to hell and I am trying to ride the wave.

Can I really make my (modest) living with it? I don't think so even tough it would be nice since it does not take much effort on my end. I know, fast money and usually that ends bad, on the other hand I would just loose a few thousand dollar.

Actually, as much as I read otherwise, I come back to what I always taught about the stock market.

It is pure and simple gambling.

I like the PA simplicity but right now at this time I go simpler and take even the A out and stick with the prices under 1 dollar for good stocks.

Anybody out there that will rip the greenhorn to pieces now?

Thanks for your time, just in case you read this to the end.

[diablo272 10]

I'd say that your strategy there is not going to be successful long term. You mentioned that you view trading as gambling, and the way that you're doing it, that's all it is. I don't trade equities so I can't help you much in that area, but I do think that if you're going to trade them, it might be helpful to trade those that are higher in price, because the liquidity will generally be much better, and it will be much easier to see patterns and signals. Buying a stock that is under $1 and if still falling is a recipe for disaster, especially if your only criteria for buying are that it's around $.50, near its low, and still falling. Also, what do you do if the stock falls immediately from your entry?

 

I think all the real good traders just have a nag (or gift) for numbers and know when what to buy or sell. They may say that they use this that or there but probably it is there ability to "see" it.

 

Being profitable isn't just a gift that some people have and others don't. The way to making money trading isn't just by doing some magic trick--it's hard work, just like any other profession. My advice is that if you really want to become a better trader, read as much as you can, and keep at it. After reading the last several lines of your post, I get the feeling that you aren't very serious about trading, and that you wouldn't mind too much if you blew out your account. I guarantee that if this is your attitude, you will blow your account, because there are people in the markets who take trading very seriously, who spend hours and hours per day in the markets, and who make their living taking money from people like you.

 

I don't mean to be discouraging, but if you equate trading with simple gambling...you'll lose, just like you would in a casino over the long term.

 

For some good reading:

 

http://www.traderslaboratory.com/forums/f52/ (have a look at the "Topic of the Month" threads)

http://www.traderslaboratory.com/forums/f30/best-of-tl-2954.html

http://www.traderslaboratory.com/forums/f30/i-look-back-now-and-wonder-4014.html

Edited January 2, 2009 by diablo272

[DbPhoenix 42]

Hi All,

This is my first post here. Thanks for all your writing in this forum.

Since I am green, really green on the whole stock trading my 2 cents want count very much but I gladly share them anyway.

I know, :crap:

This is actually my 3rd time playing with stocks but I don't count the first 2 times since I only lost money, very little, since I had only $500.- account in the first place. Now I have 5 cents more, maybe 10.

Anyway, I still learned something, do not trade pink sheets :doh:

How is the market now?, I looked at it and found the ~$160.- stock 6~12 month ago down to the penny-stocks (pink). My thinking was hmmmmmm, if the stock is ~50 cents, traded on NYSE or Nasdaq why don't you just buy some. Look what the lowest/highest already was in the last 12 month just as a reference. Then look what is it right now, then without consulting anything, I make a limit order for about 5cents lower then it is, sometimes even 10 cents and walk away. Comes afternoon I check if the broker bought it for me and sometimes yes and sometimes no, therefore there will be a other day tomorrow. Seems to work more times then expected. Reverse, now I got the stock, I look in the morning make a limit order to sell for 10 cents more and wait. Sometimes it takes 2~3 days limit orders before it sells but, it sells. Usually I buy 10k shares and it makes money too.

Now broker has trailing stops I can use so I just let it follow sell when it pulls back below 2~3% of the high and I am done with it.

Never looked at anything, just whenever I feel like. I came to this forum because I taught it can't be that simple, I guess phase 2, where I don't want to believe in simplicity.

I think all the real good traders just have a nag (or gift) for numbers and know when what to buy or sell. They may say that they use this that or there but probably it is there ability to "see" it.

Do I have that? I wish I could say yes but I don't think so.

The market is just cheap with a lot of good stocks gone to hell and I am trying to ride the wave.

Can I really make my (modest) living with it? I don't think so even tough it would be nice since it does not take much effort on my end. I know, fast money and usually that ends bad, on the other hand I would just loose a few thousand dollar.

Actually, as much as I read otherwise, I come back to what I always taught about the stock market.

It is pure and simple gambling.

I like the PA simplicity but right now at this time I go simpler and take even the A out and stick with the prices under 1 dollar for good stocks.

Anybody out there that will rip the greenhorn to pieces now?

Thanks for your time, just in case you read this to the end.

 

Stages of a Trader

 

 

Stage One: The Mystification Stage

 

This is where the neophyte trader begins. He has little or no understanding of market structure. He has no concept of the interrelationship among markets, much less between markets and the economy. Price charts are a meaningless mish-mash of colored lines and squiggles that look more like a painting from the MOMA than anything that contains information. Anyone who can make even a guess about price direction based on this tangle must be using black magic, or voodoo.

 

But those ads on TV are so persuasive. Earn $100,000 A Week In Your Spare Time. At Your Kitchen Table. In Your Bathrobe. All one has to do is buy Hidden Secrets of Market Wizards Revealed! (plus shipping and handling). Or that software with the red and green arrows (how hard can it be?).

 

So you open an account, subscribe to Level II, install your charting software, and are absolutely mesmerized by all the flashing lights and colors. DOM? You bet! And all you have to do to participate is . . . click.

 

Stage Two: The Hot Pot Stage

 

Before you’ve lost all your money, the thought that you haven’t the least idea what you’re doing may prevent you from blowing your account entirely. You realize now that this is not easy, it’s hard, it’s work, but rather than chuck it, you elect instead to take the subject “seriously”. You locate your library card and/or shop Amazon. You check out -- or take much of what you have left and buy -- all the “recommended reading”. You take the courses. You attend the seminars (box lunch included). You subscribe to the chatrooms and websites and newsletters. How-To book or notes in hand, you scan the markets every day. After a while (sometimes a good long while), you notice a particular phenomenon which pops up regularly and seems to "work" pretty well. You focus on this pattern. You begin to find more and more instances of it and all of them work! It’s all true! It Works! Your confidence in the pattern grows and you decide to take it the very next time it appears. You take it, and almost immediately your stop is hit, and you're underwater for the total amount of your stoploss.

 

So you back off and study this pattern further. You go back to the books, back to your notes. And the very next time it appears, it works. And again. And yet again. So you decide to try again. And you take the full hit on your stoploss.

 

Practically everyone goes through this, but few understand that this is all part of the win-lose cycle. They do not yet understand that loss is an inevitable part of any system/strategy/method/whathaveyou, that is, there is no such thing as a 100% win approach. When they gauge the success of a particular pattern or setup, they get caught up in the win cycle. They don't wait for the "lose" cycle to see how long it lasts or what the win/lose pattern is. Instead, they keep touching the pot and getting burned, never understanding that it's not the pot (pattern/setup) that's the problem, but a failure on their part to understand that it's the heat from the stove (the market) that they're paying no attention to whatsoever. So instead of trying to understand the nature of thermal transfer (the market), they avoid the pot (the pattern), moving on to another pattern/setup without bothering to find out whether or not the stove is on.

 

 

Stage Three: The Cynical Skepticism Stage

 

You've studied so hard and put so much effort into your trading, and this universal failure in the patterns only when you take them causes you to feel betrayed by the market and the books and materials and gurus you tried to learn from. Everybody claims their ideas lead to profitability, but every time you take a trade, it's a loser, even though the setups all worked perfectly before you played them. And since one of the most painful experiences is to fail when success looks easy, this embarrassment is transformed into anger: anger at the gurus, anger at the vendors, anger at the writers, the seminars, the courses, the brokers, the market makers, the specialists, the "manipulators". What's the point in trying to analyze and improve your own trading when there are so many dark forces out to get you?

 

This excuse-driven blame game is a dead-end viewpoint, and explains a lot of what you find on message boards. Those who can't pull themselves out of it will quit.

 

 

Stage Four: The Squiggle Trader Stage

 

If you don't quit, you'll move into the "squiggle trader" phase. Since you failed with patterns and so on, you figure there's some "secret weapon", a "holy grail" that's known to the select few, something that will help you filter out all those bad trades. Once you find this magical key, your profits will explode and you'll achieve every dream you ever had.

 

You begin an obsessive study of every method and every indicator that is new to you. You buy a whole new series of books, attend new and different courses, sign up for new and different newsletters and advisory services, register for new and different trading websites and chat rooms (you hear this guy really knows his stuff). You buy more elaborate software (100s Of Indicators And Studies!). You buy off-the-shelf systems (Guaranteed Results!). You spend whatever it takes to buy success.

 

Unfortunately, you stack so much onto your charts that you become paralyzed. With so many inputs, you can't make a decision, particularly since they rarely agree. So you focus on those which agree with the direction of the trade you've taken (or, if you're the fearful sort, you look only for those which will prove to you how much of a loser you think you are).

 

This is all characteristic of scared money. Without a genuine acceptance of the fact of loss and of the risks involved in trading, you flit around like a butterfly in search of anything or anybody who will tell you that you know what you're doing. This serves two purposes: (1) it transfers to others the responsibility for the trade and (2) it shakes you out of trades as your indicators begin to conflict. The MACD says buy, the sto says sell. The ADX says the market is trending, the OBV says it's overbought. By the end of the day, your brain is jelly.

 

This process can be useful if the trader learns from it what is popular, i.e., what other traders are doing, and, if he lasts, how to trade traps and panic/euphoria. And even though he may decide that much of it is crap, he will, if he doesn't slip back into the Cynical Skepticism Stage, have a more profound appreciation -- achieved through personal experience -- of what is sensible and logical and what is nonsense. He might also learn something more about the kind of trader he is, what "style" suits him best, learn to distinguish between what is desirable and what is practical.

 

But the vast majority of traders never leave this stage. They spend their "careers" searching for the answer, that perfect setting, that ultimate tweak to their backtest, and even though they may eventually achieve piddling profits (if they don't, they will of course eventually no longer be trading), they never become truly successful, and this perpetual not-quite-failure not-quite-success can have debilitating consequences for the psyche.

 

And in case you're wondering, the following chart is not a joke.

 

 

 

 

Stage Five: The Inwardly-Bound Stage

 

The trader who is able to pry himself out of Stage Four uses his experiences there productively. The trader learns, as stated earlier, what styles, techniques, tactics are popular. But instead of focusing entirely on what's "out there", he begins to ask himself some questions:

 

What exactly does he want? What is he trying to accomplish?

 

What sort of trading makes the most sense to him? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping? Which is most comfortable?

 

What instrument -- futures, stocks, ETFs, bonds, options -- provides the range and volatility he requires but is not outside his risk tolerance? Did he learn anything at all about indicators in Stage Four that he might be able to use?

 

And so he "auditions" all of this in order to determine what suits him, taking all that he has learned so far and experimenting with it.

 

He begins to incorporate the "scientific method" into his efforts in order to develop a trading plan, including risk management and trade management. He learns the value of curiosity, of detached interest, of persistence and perseverance, of taking bits and pieces from here and there in order to fashion a trading plan and strategy that are uniquely his, one in which he has complete confidence because he has tested it thoroughly and knows from his own simulated trading and real-money experiences that it is consistently profitable. This eventually becomes his “edge”*.

 

He accepts fully the responsibility for his trades, including the losses, which is to say that he understands that losses are inevitable and unavoidable. Rather than be thrown by them, he accepts them for what they are, a part of the natural course of business. He examines them, of course, in order to determine whether or not some error was made, particularly one that can be corrected, though true trading errors are rare. But, if not, he simply shrugs off the loss and goes on about his business. He understands, after all, that he is in control of his risk in the market.

 

He doesn't rant about his broker or the specialist or the market maker or that vast conspiracy of everyone who's trying to cheat him out of his money. He doesn't attempt revenge against the market. He doesn't fret. He doesn't fume. He doesn't succumb to hope, fear, greed. Impulsive, emotional trades are gone. Instead, he just trades.

*the knowledge proved through research that a particular price pattern or market behavior offers an acceptable level of predictability and risk to reward to provide a consistently profitable outcome over time.

 

Stage Six: Mastery

 

At this level, the trader achieves an almost Zen-like trading state. Planning, analysis, research are the focus of his time and his effort. When the trading day opens, he's ready for it. He's calm, he's relaxed, he's centered.

 

Trading becomes effortless. He is thoroughly familiar with his plan. He knows exactly what he will do in any given situation, even if the doing means exiting immediately upon a completely unexpected development. He understands the inevitability of loss and accepts it as a natural part of the business of trading. No one can hurt him because he's protected by his rules and his discipline.

 

He is sensitive to and in tune with the ebb and flow of market behavior and the natural actions and reactions to it that his research has taught him will optimize his edge*. He is "available". He doesn't have to know what the market will do next because he knows how he will react to anything the market does and is confident in his ability to react correctly.

 

He understands and practices "active inaction", knowing exactly what it is he wants, exactly what it is he's looking for, and waiting, patiently, for exactly the right opportunity. If and when that opportunity presents itself, he acts decisively and without hesitation, then waits, patiently, again, for the next opportunity.

 

He does not convince himself that he is right. He watches price movement and draws his conclusions. When market behavior changes, so do his tactics. He acknowledges that market movement is the ultimate truth. He doesn't try to outsmart or outguess it.

 

He is, in a sense, outside himself, acting as his own coach, asking himself questions and explaining to himself without rationalization what he's waiting for, what he's doing, reminding himself of this or that, keeping himself centered and focused, taking distractions in stride. He doesn't get overexcited about winning trades; he doesn't get depressed about losing trades. He accepts that price does what it does and the market is what it is. His performance has nothing to do with his self-worth.

 

It is during this stage that the "intuitive" sense begins to manifest itself. As infrequent as it may be, he learns to experiment with it and to build trust in it.

 

And at the end of the day, he reviews his work, makes whatever adjustments are necessary, if any, and begins his preparation for the following day, satisfied with himself for having traded well.

 

(from Bo Yoder, Vad Graifer, and Mark Douglas)

 

 

 

1. I walk down the street

There is a deep hole in the sidewalk

I fall in

I am lost, I am helpless

It isn't my fault

It takes forever to get out

 

 

2. I walk down the street

There is a deep hole in the sidewalk

I pretend I don't see it

I fall in again

I can't believe I am in the same place

But it isn't my fault

It still takes a long time to get out

 

 

3. I walk down the street

There is a deep hole in the sidewalk

I see it there

I still fall in....it's a habit

My eyes are open

I know where I am

It is my fault

I get out immediately

 

 

4. I walk down the street

There is a deep hole in the sidewalk

I walk around it

 

 

5. I walk down another street

 

 

Portia Nelson

 

 

[bennie 10]

Thanks for your replies, dbphoenix I like the six stages. Thats' why I mentioned I think I am little in stage 2 but somehow I can't commit to that either. Spending money to read on somebody else's success is not fully my cup of tea since it does not mean it will happen to me too.

After I closed my e-mail I get some quick nuggets on the page and one pointed to Motley fools, so I clicked it and that's what was written there:

 

"Cramer:

But as long as people invest well and stay interested, they could make a fortune, he continued. The one cure for boredom with investing is speculation, said Cramer, who believes people need to speculate if they want to be good investors. Speculation, he explained, means trading in a "high-risk, high-reward" stock and "trying to turn a little money into a whole lot of money in not a lot of time."

 

Some might consider speculation to be foolhardy and "more immoral than gambling," but Cramer, who has made some of his biggest gains by speculating, believes speculation is good for investors. "

 

I think that's my problem. My thinking is in terms of gambling not in terms of investing. Diablo is most likely right but then, at least I had fun.

Actually, since I am not trading contracts where you have a winner and a loser in the end, I could still win and let live anybody else too. Stocks are not really so clearcut, unless I had stocks I bought for ~$160.- or more a share. I can't see stocks that went from ~160 to a few cents going anywhere near to that price in the near future.

Hmmmm, then of course it would be nice to have a couple 10k shares of "that one".

Thanks for your time and I wish all a Happy and prosperous 2009 New Year.

May the force be with us

[Guest chghtor]

Pure price action is the only truth. Unfortunately the best trades are often the trades not taken. I use other indicators simply as a road map of when not to trade. I do however miss some trades.

[samhollander 10]

For those looking to cut thru the muck & mire, may I recommend Dbphoenix's book & his links to Wyckoff.Very informative & witty.`

[jonbig04 10]

I re-read the mastery one all the time in hopes that I can one day get there.

[luke24.5 10]

Quit listening to kramer NOW! Did he tell you that he sold all during the last bear market while every day advising his audience to buy? The day before the turn he said, "It may be time to start shorting."

 

Save your money and read all that's on this site. If you haven't enough money to trade you may be able to watch some free charts while you study how price relates to volume and time. Nothing replaces observation. Also look at the book reviews at this site and invest in a few.

 

Top 2 reasons businesses fail are the lack of a business plan and lack of capital. Trading is no different.

 

 

"Cramer:

But as long as people invest well and stay interested, they could make a fortune, he continued. The one cure for boredom with investing is speculation, said Cramer, who believes people need to speculate if they want to be good investors. Speculation, he explained, means trading in a "high-risk, high-reward" stock and "trying to turn a little money into a whole lot of money in not a lot of time."

Edited May 2, 2009 by Soultrader

[gsalvadi 10]

I trade with price action alone. Every indicator is lagging and makes the trading system complicated. I was having such a system earlier. I am comfortable with price action alone.

 

One does not need an indicator which is already obvious on charts.

[stockmarcus 10]

Subjectively for me:

 

For intraday (very short term trading) trading with just support and resistence can work, but you'll more than likely loose more than gain due to the nature of the trades and volatility (which you're trying to trade).

 

The price action short term is invaluable for indicating the momentum of the market. How active the price is as its moving places works as an excellent final call on getting into or out of a position. If all your other basis points to a trade, but the price action isn't also enthusiastic about it, its a no go (or exit!

 

Currencies, at least the euro pairs, seem more purely technical than the indicies. Its probably worth trying a few rounds in the simulator of euro/yen trading off just SR and being disciplined about cutting your losses when a position fails. It runs enough when you're successful where this might work

 

Ultimately for euro indicies on an intraday basis

- i like having something to cut out the noise. probably essential.

- all markets seem to have their days when they're channelling happily and wide enough to trade in the channel (is that swing trading?), or trending stably off SR.

- for the days that aren't, its probably worth doing something else, or finding an indicator to help you adapt

[sevensa 10]

For intraday (very short term trading) trading with just support and resistence can work, but you'll more than likely loose more than gain due to the nature of the trades and volatility (which you're trying to trade).

 

Why do you say that more likely you would lose more than gain because of the nature of the trades and volatily? Can you maybe provide some examples of what you mean by the nature of the trades? Wouldn't your profit/loss depend on your stops/profit targets?

[stockmarcus 10]

Why do you say that more likely you would lose more than gain because of the nature of the trades and volatily? Can you maybe provide some examples of what you mean by the nature of the trades? Wouldn't your profit/loss depend on your stops/profit targets?

 

Yes, sorry for being vague. Fun but long nights on the markets.

 

From starting to write out a reply, you're right, having an idea of profit targets and stops can keep you profitable.

 

What i was thinking about when writing that you may be experiencing losses during periods of time when indices can be:

 

- More volatile/unstable. Charactized by 'long bars' in opposite directions occuring in a very short period, commonly around open. Its difficult to establish targets when they're like this (though thats probably something im missing) and stops can get shot through. A better way to consider that though is a time to avoid the market.

 

-When the market is flat, or trending unstably. Also times to avoid the market.

 

Theres nothing wrong with a heavily price action based methodology, like any other, if one is sane about it.

 

Indicies within a day can trend or fluctuate alot, so if you stay out when you should, and monitor closely whether your swing trading or in a long term trend, that sounds alright.

 

Personally, i trade very short term. Basic T/A influences my entries and exits quite significantly, but i also need something to help smooth out some of the near the minute voliatility, as my positions are typically very short (seconds to 1/2 hour). Given the shorter positions, its very valuable to be able to asses more quickly if you're 'wrong' rather than possibly allowing the market to correct from some other basis. Indicators seem to help with that.

 

Lately i've been using T/A, bollingers at 1 deviation, a subjective assessment of momentum, and from a recent post here the Awesome Oscillator, to good success.

[artrading 10]

I think consistently trading profitably with PA......

don't let anyone tell you their method is better than yours if you are successful. Trading is like putting on a glove, it's not one size fits all.

 

I just quoted the whole post, because that is the most level headed, sensible post (trading related) I have read in a while! thanks!

[b4gt 10]

I am a little confused about price analysis. Can it be applied to any market with any time frame? Can, for example, be used in swing trading?

[DbPhoenix 42]

I am a little confused about price analysis. Can it be applied to any market with any time frame? Can, for example, be used in swing trading?

 

Depends on what you mean by "analysis". If you mean following price from transaction to transaction in order to detect imbalances in buying pressure and selling pressure that will move price one way or another, then yes. However, you need not follow price tick by tick in order to detect these imbalances (though you'll be ahead of everybody else if you do). You can also detect them on a daily chart or a weekly chart. The principles are the same.

[strtedat22 10]

Using price action as a basis to make trading decisions is possibly one of the most straight forward and simple ways to trade. Understanding how and why these things are as they are takes a bit more work and the perceptual shifts that DB talks so eloquently about. There are few (if any) better places to help you understand why (and the how for that matter) than the Wyckoff area here.

 

Just as it is not necessary to understand Newtons universal theory of gravitation to collect apples from the foot of a tree, it is not necessary to understand why markets move as they do to capitalise on those movements. There are numerous good resources that demonstrate different possible 'hows' without paying to much attention to 'why'. If you are anything like me you'll want to know why though to some that is not important.

 

A short comment on prediction. It is not necessary to predict to trade successfully, in fact the emotional attachment you are likely to get through trying to predict can be detrimental to trading without bias. The way most people apply price action is they see how it has behaved in certain areas in the past (finding potential areas of support and resistance if you like). They then monitor (in real time) what price does when it reaches that area again. There is a degree of anticipation but it is more about what is happening now than what might happen.

 

In a nutshell 1) use historical price action to give potential trade areas. 2) Use 'real time' price behaviour to determine if you have a trade in those areas. Pretty simple if not easy

 

The "In a nutshell" example sums up the way price action IMHO should be used. I enjoy life more than ever just watching tape along with a 250 tick chart.

[strtedat22 10]

PRICE ACTION,I am on the quest to rid myself of indicators.Since i have been trying a method using Stochastics & inside candles, with S/R, Double tops, Bottoms & Fib.Have not been as profitable as when i was using 3 MA, Bol. Bands, RSI, Macd.The impulse is to revert back & add indicators {of which I have,2 MA}.Has it been successful? No.So I am reading Wychofs book[ThanksDBPhoenix} & also have read Tom Williams insightful book on the Tradeguider site.If i could afford there program,as a novice it seems the way to go, I would .But $2995.00 is a bit much.

 

Sam,

 

Im sure youve heard of "over analysis paralysis". I believe that applies to you (sarcasm). Rid yourself of indicators and use a TS and a short term chart of your liking. The first hour will let you know what kind of day it will be. Watch the TS window when it reaches major milestones such as Previous/Current/ OHLC and daily pivot levels. When price reaches these level watch what happens. The market has 3 directions: up, down, and sideways. TS window will let you know what direction it will be going. Watching indicators and looking for chart patterns is a fools man game IMHO. Good luck.

[wjrusnak 10]

TS window will let you know what direction it will be going. Watching indicators and looking for chart patterns is a fools man game IMHO. Good luck.

 

If you can trade off nothing but Time and Sales and be consistently profitable, I'd be really impressed. Could you elaborate on your elite talent? I'm curious.

[strtedat22 10]

If you can trade off nothing but Time and Sales and be consistently profitable, I'd be really impressed. Could you elaborate on your elite talent? I'm curious.

 

wjrusnak,

 

Absolutely...Dont forget the 250 tick chart Do you have ninja trader/zen fire combo? The reason i ask because they give members recording capabilities (OEC is another...dont know of any others). Each situation is different (is the market choppy, trending...etc). Giving you a visual example is something everybody can do to make a point. Looking at actual contracts in the TS window is a better way for me to explain things. Do you have the TS window (or anyone) for 9/10/09 between the hours of 8:48am-9:03am cst? i didnt record the day With that time frame i took 2 trades that were good. With the info provided with in that time frame opportunity was present. If anyone reading my post can post it in this thread so i can explain what i saw that made me take the trades or if not take sometime to review it. Make sure you look it over with a fine tooth and comb. Im not giving away what i see until you (wjrusnak) review it first or someone provide me with that time frame (Im to lazy to post a video). If you (wjrusnak) wanna my "elite talent" (your words) skills youll post a video of that time frame :rofl:

 

strtedat22

[wjrusnak 10]

wjrusnak,

 

Absolutely...Dont forget the 250 tick chart Do you have ninja trader/zen fire combo? The reason i ask because they give members recording capabilities (OEC is another...dont know of any others). Each situation is different (is the market choppy, trending...etc). Giving you a visual example is something everybody can do to make a point. Looking at actual contracts in the TS window is a better way for me to explain things. Do you have the TS window (or anyone) for 9/10/09 between the hours of 8:48am-9:03am cst? i didnt record the day With that time frame i took 2 trades that were good. With the info provided with in that time frame opportunity was present. If anyone reading my post can post it in this thread so i can explain what i saw that made me take the trades or if not take sometime to review it. Make sure you look it over with a fine tooth and comb. Im not giving away what i see until you (wjrusnak) review it first or someone provide me with that time frame (Im to lazy to post a video). If you (wjrusnak) wanna my "elite talent" (your words) skills youll post a video of that time frame :rofl:

 

strtedat22

 

If that is the case, then you are still using a chart (250 tick) to see levels of support and resistance. Then using your T&S seems not much different than using a 1 tick chart for entries. If that is the case... I'm not as amazed, but still impressed. I get the general idea. Furthermore, just like using the 1 tick chart, you are truly reading price action, as compared to the 1m charts where you miss anything inside the open and close of the bar. Anyway, no need to post an example, as I didn't realize you also used a 250 tick chart.