A simple price action approach
- Thread starter metal
- Start date
To the 14210 level.?
Up, down or sideways is the correct answer, never use a bias as it's imperative that you are capable of reversing directions when the unexpected occurs.
You don't predict, you react on confluential key areas that are supposed to hold, then you read the PA and determine if they held, broke or faked and then take your trade.
Some prefer to anticipate and this involves a bit of prediction, it's a matter of choice and style, I prefer to react.
Crazy A
First to retest the recently established new low with alot of profit taking by the shorts, then back up through that new area of consolidation. So no trade (yet). Once the low has been retested then go long and likely this will be a good trade with a fat profit.. Low risk (stop can be tight) and good reward ration --- probably 1:5 with regard to stop versus first profit target. Although what's missing from this chart is a longer timeframe and fundamental info---why the drop in the first place, yada, yada, yada....
Yes, it does and it seems like pure magic at times.
In the words of Al Brooks, "If you want to compete, you must minimize all distractions and all inputs other than what is on the chart in front of you, and trust that if you do, you will make a lot of money. It will seem unreal but it is very real. Never question it. Just keep things simple and follow your rules. It is extremely difficult to consistently do something simple, but in my opinion, it is the best way to trade."
You have no idea how many times a day I find myself thinking "This is unreal."
How can something that's supposed to be so random and "noisy" keep working?
Who cares, as long as it works, don't try to fix it!
It's easy to recognize other experienced profitable traders on ET. They post information that comes from experience, produces consistent profitability, and often causes frustrated traders to want to argue about it
What will happen next based on that chart can be anticipated (price will dip to that that nearby lower TL) or you can wait to see what price does and react accordingly.
What actually does happen next NOBODY knows. But probability is in your favor that if X, then Y is more likely to follow. So you play off X when it occurs.
Now combine "more likely" with positive risk:reward. "More likely" doesn't mean "guaranteed". If you hold a loser or average down against price when it's waving a big red "Reversal" flag, just because a setup is high odds and you believe price will do what you want it to at some point, you not only risk large losses, you miss out on immediate profitable opportunity. A loss that grows beyond normal retracement action means you're missing profits. You're paying money to lose out a new profitable opportunity.
I sometimes anticipate (very tight stops) and sometimes react (higher odds the trade moves in your favor, but you pay a little extra on the entry for that confirmation).
Regardless, this simple (drawing a trend line on my charts takes about 3 seconds, copying it and moving it for a channel takes about 10 more seconds) method of trading produces positive results because the profit reward when trading in the direction of a trend is quite a bit greater than the loss that results if price movement invalidates the positive expectation of the setup. That's because you're looking to enter very close to S/R and if it fails the loss is small; if it holds, the next target in the trending move is not only the previous high or low, but a good push beyond it as well.
different time frame chart has different trendline.
i use auto trendline and regression channel which need no human effort to draw.
trend is always changing. big players initiate trend and harvest from trend followers. most trend followers lost money except smart players who join the movement from early stage and exit before it reverses.
there is no statistical ground on this method alone. i only take this approach as one small factor in my system.
agree. if it can't offer over 95% probability of win, i will add other factors to make it dependable. i never trust price action pattern only. i take much more factors into consideration in my system.
i believe there is no such simple method which involves only one or two factors. high precision/win rate system has to involve many factors with proof statistical model to produce reliable sustainable profitable result.
if you trade reversals, either micro or macro, i.e. enter at a very early stage of new micro/macro trend, with a well designed modelling which involves all necessary factors, plus an automatic sound alert to indicate you should prepare to enter a trade, things become simple. i set sound alert for all tradeable zones in my system, which could remind me it's time to wake up when i have a nap.
There's probably a whole profitable trading method in just that one post, I'll have to spend some time with all of the good info.
What I meant to ask is what time your charts start/stop, or do you use a 24 hr chart ?
Also, in breaking a TL, I see one example of your entry off the 1min with a failure to breach/close above the 20 MA. I see the NQ do this exact type of "Failure" setup pretty much every day.
Can't wait to read more. Great thread!
