can price action predict market moves

[volpri]

What about the monkey and the cat. What is likely to happen?

 

[volpri]

What about the chart above? Long or short? Why?

 

[Master Pu]

Since you word it that way YES. Sometimes the word anticipate softens the truth that we are all trying to predict price or we wouldn't take a position. We wouldn’t decide long or short..ROFLMAO. It is amazing but folks get bent out of shape over semantics.

Definition: “Just like a hypothesis, a prediction is a type of guess. However, a prediction is an estimation made from observations. For example, you observe that every time the wind blows, flower petals fall from the tree. Therefore, you could predict that if the wind blows, petals will fall from the tree.”

Apply to trading:It is my estimation that this trend will likely continue, with at least a second leg after this BO, because THAT is what I have seen from my observation of price behavior in the past. Namely, a strong BO, like the present one, one that has only a 1 or 2 bar PB,
price most of the time resumes the trend. Those observations have indicated that there is a 70% chance there will be another leg in the direction of the previous trend before the PB.”

“Therefore, I predict a second leg is likely forth coming and I will take position but place a SL should my anticipation/prediction of second leg trend continuation not pan out.”

Since nothing is 100% certain in life (including that any of us will be alive to read this post) I predict based upon probabilities. Those probabilities are based upon previous observations. And I take a position. To say I am not predicting but just taking a position out of “thin air” is ludicrous. If a body is gonna trade he best make haste and learn to predict based upon previous observations ..assign probabilities...or stay out of the game otherwise, he is playing, at best a 50/50, guessing game with NO basis for the guess. Just a wild shot in the dark.

If one believes in high probability trades then one is attempting prediction.

Yes, price action can thus be helpful in predicting future moves. Otherwise, don’t look at a chart. Don’t look at RAW data points and THEIR patterns. Don’t look at indicators. ALL these are just tools to help “predict” likely price moves so traders can take a position when they see an edge. We are deceiving ourselves if we deny we are trying to predict. The trading game IS ALL ABOUT trying to predict ...not just taking a position for “the hell of it.”

I predict some disagreements over this posts and terminology. ROFLMAO

I gave you a like pal, that's the least I could do

 

[Master Pu]

What about the chart above? Long or short? Why?

Personally, I wouldn't take a position there as I don't trade that way. I would have been a buyer at previous swing low, which would have been quite prosperous on this occasion.

In fact I've learnt to be totally unbiased to market sentiment, I buy support and sell resistance levels using very strict risk management criteria. I don't try to play the guessing game, if I see confluence at any specific level, I'm in a trade.

 

[volpri]

Personally, I wouldn't take a position there as I don't trade that way. I would have been a buyer at previous swing low, which would have been quite prosperous on this occasion.

Don’t forget the gun factor. It doesn’t matter your normal way of trading this is what you have here in this scenario. Now predict! Will price likely go up or likely go down within 2 hours? It is a 5 minute chart. Long or short?

PS why would you have been a buyer at a previous swing low? Rationale?

 

[deaddog]

I predict some disagreements over this posts and terminology. Or I predict silence. Total agreement would be an unlikely response but possible ROFLMAO

I agree!! There goes your silence prediction. Wrong again

 

[Master Pu]

Don’t forget the gun factor. It doesn’t matter your normal way of trading this is what you have here in this scenario. Now predict! Will price likely go up or likely go down within 2 hours? It is a 5 minute chart. Long or short?

PS why would you have been a buyer at a previous swing low? Rationale?

1. OK. I'd probably look to fade the move.

2. Rationale is simple - potential reward > risk.

 

[volpri]

1. OK. I'd probably look to fade the move.

2. Rationale is simple - potential reward > risk.

Why is the reward greater than the risk? What makes you think it to be so?

 

[volpri]

I agree!! There goes your silence prediction. Wrong again

LOL the trade has not ended ...so to speak.... Total agreement by all ET’s has not happened. You are one tick amongst many!

 

[Master Pu]

Why is the reward greater than the risk? What makes you think it to be so?

What is this trading 101?

Price tends to oscillate between support and resistance levels, looking at your chart a conservative target, below resistance level, is a multiple of a stop that I'd have used in this situation.