can price action predict market moves

[speedo]

I'll give you that one but not all can quit or want to. If majority were to find an optimal way to trade then it won't last long.

As an ex-smoker, I certainly agree that quitting is difficult as it is a strong physical addiction. The addiction also tricks you into thinking that a cig after sex or a meal, with a drink etc is a good pairing. What I found it once the addiction was broken that it was simply an anchor being dragged around to various activities. You also come to realize that they really do stink. Anyone can quit if they really want to just as anyone with reasonable intelligence and a strong work ethic can understand what a chart is displaying and can recognize a viable setup. Of course most people are capable of doing many things which they will end up not doing for whatever reason or excuse.

 

[Master Pu]

No.

Risk management will only make you bleed out slower, i.e., if you bet $10 you can play 10 times longer than if you bet $100. But in the end you will still lose if you don't have an edge (positive expectancy) and/or sufficient market understanding.

Risk management includes so called edge.

 

[speedo]

Risk management includes so called edge.

Yep. an "edge" cannot be defined without reasonable risk/reward assessment and attendant trade rules.

 

[longandshort]

Risk management can be an edge. But most people would define an edge as a reason why you are able to make a prediction that is more likely to occur. Your edge might be analytical (better understanding of how markets work), informational (access to better information), or logistical (faster execution). You size up when you have an edge on a trade.

When you are trading, the price you take is the cost of your bet. You have to ask yourself if the reason why you made the trade at that price is based upon an edge (one of the above) that is strong, weak, or nonexistent. Each time interval represents an opportunity to add or exit a position, so you are making a bet regardless of what you do.

 

[Master Pu]

Risk management can be an edge. But most people would define an edge as a reason why you are able to make a prediction that is more likely to occur. Your edge might be analytical (better understanding of how markets work), informational (access to better information), or logistical (faster execution). You size up when you have an edge on a trade.

When you are trading, the price you take is the cost of your bet. You have to ask yourself if the reason why you made the trade at that price is based upon an edge (one of the above) that is strong, weak, or nonexistent. Each time interval represents an opportunity to add or exit a position, so you are making a bet regardless of what you do.

Liked!

I'm not the sharpest tool in a shed, nor do I claim to be. That's why I don't do scalping as I have no skills, knowledge and therefore interest in trading intraday noise. I go for major levels of support and resistance and trade these levels applying what I consider to be a solid risk management model. Doing this allows me to be wrong at least 50% of the time, I admittedly do not have the edge, but I do have an edge. And the reason this edge works out is because I'm not the only one eyeballing these important levels, but many other trading entities who have much more capital compared to me. Sometimes I guess right, other times I'm wrong. When I'm right I'm riding a solid wave. When I'm wrong it's a smaller risk in comparison. That's why risk management is more important than some super duper edge that is unlikely to last anyway.

 

[longandshort]

Liked!

I'm not the sharpest tool in a shed, nor do I claim to be. That's why I don't do scalping as I have no skills, knowledge and therefore interest in trading intraday noise. I go for major levels of support and resistance and trade these levels applying what I consider to be a solid risk management model. Doing this allows me to be wrong at least 50% of the time, I admittedly do not have the edge, but I do have an edge.

The question you should ask is this: is support and resistance, as you measure and define it, a real tradable signal, or is it as good as betting that your 6 spade is the high card preflop?

My question to you is why aren't you learning about the different hands and optimal combinations that actually lead to excess returns? For example, there is a lot of academic research connecting analyst revisions to price momentum. Why are you still betting on a 6 spade as a high card when your opponents are making bets on their aces or pairs? You are just paying the market.

 

[bone]

When I was on the floor, the big locals would run stops. It's like a free option. How did these independent local traders determine where the stops were ? Technical support and resistance.

 

[Master Pu]

[

When I was on the floor, the big locals would run stops. It's like a free option. How did these independent local traders determine where the stops were ? Technical support and resistance.

Isn't the floor no more? still happens anyway

 

[longandshort]

When I was on the floor, the big locals would run stops. It's like a free option. How did these independent local traders determine where the stops were ? Technical support and resistance.

Is that why they’re all out of business now? Susquehanna and Goldman ate their lunch.

 

[bone]

Just completely sidestep the point of the post. Big successful traders feed on small retail traders. And doing the obvious makes you the prey.

Say what you want about the floor - I saw locals who would put on thousands at a time.

Big electronic traders do the same types of things. They come in with size and they know where to inflict maximum pain to their benefit.

Retail level scalpers have low pain thresholds and they buy and sell at the same places and tend to puke at the same places. Big fish eat little fish.

Is that why they’re all out of business now? Susquehanna and Goldman ate their lunch.

[
Isn't the floor no more? still happens anyway