can price action predict market moves

@volpri

Here is a better visual, hope you appreciate the free TA after school class I'm providing LOL

Quick analysis:

Market in an uptrend (not present on the visual, just trust me on this one).

Area of consolidation within the grey rectangle. Price oscillates between support and resistance in a tight range.

Red lines indicate areas of past significance, where market declined, hence they are target levels.

Blue line (stop) is based on risk management, one of its components is where price may head to. As long as it's greater than the risk by at least 200%, I'd be a buyer of support within the consolidation area.


Screenshot_20210403-192022.png
 
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For the original question, one way for price action to predict market moves is:

  1. Start with a time series of prices.
    upload_2021-4-3_13-54-14.png

  2. Model the prices with a function.
    Code: 
    y = 47.842376709  +  0.0267357696 * x  +  0.0002474694 * x^2
    +  0.7211558223 * cos(twopi / 31.5393267694 * x  +  4.2887477875)
    +  0.5487875938 * cos(twopi / 45.7384658729 * x  +  4.6938362122)
    +  0.2670122385 * cos(twopi / 15.9987574675 * x  +  4.7040138245) ;
  3. Extrapolate the function to make a prediction.
    upload_2021-4-3_13-54-35.png
 
ph1l said:
For the original question, one way for price action to predict market moves is:

  1. Start with a time series of prices.
    View attachment 256136
  2. Model the prices with a function.
    Code: 
    y = 47.842376709  +  0.0267357696 * x  +  0.0002474694 * x^2
    +  0.7211558223 * cos(twopi / 31.5393267694 * x  +  4.2887477875)
    +  0.5487875938 * cos(twopi / 45.7384658729 * x  +  4.6938362122)
    +  0.2670122385 * cos(twopi / 15.9987574675 * x  +  4.7040138245) ;
  3. Extrapolate the function to make a prediction.
    View attachment 256137
More...

Cool. But what is the likelihood of others being in agreement with you?
 
TA alone is useless. Trade management and price action are the other 2 legs of the tripod. Plus market internals, in vs out day, spoos etc for intraday.

Using simple isolated technical breakout patterns like cups, triangles and trend lines equals mostly losing trades and false breakouts. It's better to use multiple indicators like volume along with a breakout, but where most traders get into trouble is using isolated signals.

The single most important technical signal beyond price is range, along with volume. Looking for changes in volume and range along with price action leading the way is important.
 
KCalhoun said:
TA alone is useless. Trade management and price action are the other 2 legs of the tripod. Plus market internals, in vs out day, spoos etc for intraday.

Using simple isolated technical breakout patterns like cups, triangles and trend lines equals mostly losing trades and false breakouts. It's better to use multiple indicators like volume along with a breakout, but where most traders get into trouble is using isolated signals.

The single most important technical signal beyond price is range, along with volume. Looking for changes in volume and range along with price action leading the way is important.
More...
From the man who puts it live onscreen day after day...KC,
During what time span would you say 80% of your profitable entries occur?
A wild guess on How many / which products would you say 80% of your profitable trades come from?
Opposite; 80% of your losing trades come from?
Off the top of your head, Does any day of the week stand out for wins? losses?
 
More ways to skin a cat.....

Nested Triangle (blue) at the bottom of a bull channel. A triangle is BO mode. Price simply cannot stay in a triangle. It has to BO north or south or money making ceases. Channels: 75% of BO of the bottom of a bull channel fail and price within 5 bars trades back up into the channel.

Another tidbit. Bull channels function as bear flags with an eventual larger BO south.

A case can be made for going long or short. But which indicates the more likely?

The tactic: Given the larger context of the bullish trend in the form of a bull channel and since price MUST BO of the triangle and if that BO is south it will likely fail the odds favor going long in the bottom 1/4 of the channel betting the BO of the triangle will be north even if the initial move is a 2 or 3 bars south move. Initial Target middle of the channel for a scalp...larger target top of the channel for a small intraday swing of two or more legs.

PS For those younger traders symmetrical triangles are known as coils back in the olden days. When you think of a coil think of it compressed as price is converging from both sides. A symmetrical triangle is a range whose sides are converging.

Think of it as a coiled rattlesnake. When and if it price reaches its apex (rattlers are shaking) it will “spring forth” in one direction or the other. Pressure is building as price range gets smaller and smaller as it gets closer and closer to the apex. Bulls want an upside BO while bears a downside. Once a BO occurs it will often come back and test the Apex then make the larger move up or down.

That is the likely scenario. But now for the “what if scenario.” Say the unexpected happens. The BO is a successful BO south and has followthrough (FT) that is the bull channel scenario acting as a bear flag on a larger TF. Then the tactic is short for a measured move. If one got caught long from the scenario above exit immediately and double up short after the confirmed BO south. Unexpected events usually render a measured move. Doubling up one quickly gets back the previous loss and is soon in the money.

780191D7-151F-4845-93EE-1A076E36A548.jpeg
 
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