Are you good at price action and technical analysis?

Slope Trader said:
what features would make the test as reasonable and fair as possible..
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It has to be a playback, so there is a continuous updating aspect to it. It is not realistic to have a singular time slice.

Every bar that is put out there, has a chance to change EVERYTHING or nothing and everything in between. Which bars merit evaluation and which don't is a serious question to anyone who actually trades. When is the previous analysis invalidated? What if I can't finish my analysis before the next bar happens? What happens if the previous bar and the current bar contradict the analysis? Are you paralyzed?

All this "look at this chart" and tell me xyz is armchair kiddie stuff and not at all serious. One has to get real about it, as in REAL-time. There are examples EVERYDAY in thousands of charts. Just get to work and place your entries and exits.

Also I don't know about the concept of "fairness", as I have never really encountered that preparing for an entry or exit. If some Fed president makes a comment and the entire chart blows up in a double whipsaw during lunch hour, is that "unfair"? Was it fair the morning of 9/11? It is ThunderDome.

Trading requires a lot of experienced based skills, keen concentration, precise actions, and relentless effort. It is not a matter of being "good" as the OP wants to know, it is about doing all the parts well over and over without messing up.

I am out.
 
Specterx said:
Just to be clear, nobody on ET makes a living trading breakouts on 5 minute candles.

With that out of the way, the premise of this quiz (that TA or any other trading method allows one to forecast the coming 5-minute bar from a random point in time) is nonsense. To the extent "price action" carries any useful information, it's about identifying and reacting to significant events or inflection points in the market, not magically seeing the future.

To use a simple example applicable to current markets, if SPX makes a new 6-month high then you'd better be long if you want to call yourself a trader. That has nothing to do with "predicting" Monday's closing price.
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I would probably see a double top and be either short or nervous to go long.

Probably one of the reasons I exit too early as well,because I expect price to react to the levels.

Thats why I'm interested in PA or some other analysis around these levels to allow me to identify the sort of strength that would push through and continue on its way.
 
Frederick Foresight said:
Simple and easy? No. But I think something can be done with just a chart. And by “just a chart,” I mean just that. No indicators, lines, projections or whatever. Perhaps it is just too rudimentary for your special needs and expectations.
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Naked chart? Just from eye and experience?
 
longandshort said:
Shouldn’t the result still correspond to the difference from random?
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probably but you would need a larger sample size to get a “statistically significant” result that drowns out the noise.

personally I think your conclusion is correct. I don’t think price alone (in equity delta space) can predict the future; or if it can it will be at a terrible risk adjusted return that would be pointless to pursue. Otherwise smart hedge funds would be all over it as the data is easy to obtain and there’s no barrier to finding the alpha. I do believe price action has alpha in other markets
 
newwurldmn said:
...I don’t think price alone (in equity delta space) can predict the future; or if it can it will be at a terrible risk adjusted return that would be pointless to pursue. Otherwise smart hedge funds would be all over it as the data is easy to obtain and there’s no barrier to finding the alpha. I do believe price action has alpha in other markets
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Interesting. I didn't even think about a distinction between equities and other markets. Since I haven't traded equities, I can't say I have a formed opinion on the matter. Why do you think a distinction exists?

Also, and maybe it's just me, I don't really like the term "prediction." I think there is a marked difference between identifying a good low-risk bet and predicting the future. Getting in on a wave with a view to at least being able to get out unscathed, but with the hope or expectation of more, is a far cry from predicting.
 
If you can determine a fair value for an asset the price action will either represent a change in that fair value or a flow imbalance. In several markets it’s often enough a flow imbalance that you have positive expectation.

Stocks and futures won’t work, but the futures basis could be one of those.


Frederick Foresight said:
Interesting. I didn't even think about a distinction between equities and other markets. Since I haven't traded equities, I can't say I have a formed opinion on the matter. Why do you think a distinction exists?

Also, and maybe it's just me, I don't really like the term "prediction." I think there is a marked difference between identifying a good low-risk bet and predicting the future. Getting in on a wave with a view to at least being able to get out unscathed, but with the hope or expectation of more, is a far cry from predicting.
More...
 
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