Traders are naturally an intelligent, intellectual group of people. They got where they are today in part or whole by processing information. Logic & reason. If you are stumped by a puzzle or task, just gather more information and sift out the facts.
So they approach trading the same way. Research, research, research must be the key. Figure out supply/demand and you win.
Let's save ourselves a few thousand words on explaining why that is and summarize like this: everyone who ever tried trading has at one point if not the entire time tried to use logic, reason and research as a profitable edge.
That said, why then did they all (with no exceptions) fail? Because the puzzle has too many odd-shaped pieces to be solved by any man.
The only traders who succeed long-term are those that approach the markets in systematic fashion. Any broker will tell us that when asked. Methodical decision process, over and over again. Think blackjack playing and you are 100% on track.
fwiw I have never in my life watched results of an oil inventory report. I don't even have a television anywhere near my office. It's just watching the charts, making the reads and taking action in methodical fashion. Over a large sample size of similar trades, an edge plays out in statistical fashion.
Logic & reason are a siren song to traders... leading them into deep waters with swift currents.
I have always thought to combine both fundamental and technical, so I watch the charts, read price action, but then I want to go over the report, just like many of the I-Banks....I get some of their research reports from a friend, and they are quite extensive, so they care about the fundamentals, and factor them into their overall trading strategy, so if I am long, and I am looking for a clue as to how potentially strong this move could be, if I can glean some insight from the report, that says....wow distillate demand really picked up, the products could really drive this trade, stay in it longer.-I have always thought that was beneficial.
But maybe they have longer term strategy & capital horizons than an independent day trader.
It is an interesting hypothesis that any outside info other than just price action of the instrument on the chart could potentially harm one`s interpretation of the data, that a trader could form conscious or unconscious biases that get in the way of properlying identifying what is actually going on in the instrument, and taking the proper actions, i.e., some form of projecting onto neutral data points potential future moves that are inconsistent with the actual price action.
I sure would feel naked if the market really tanked, I would turn on the news, and see what caused it, and use my Logic and reasoning, to determine if this is an over-reaction, and I should buy the large drop or stay away, or short.....i.e., a terrorist event------use my analysis to decide if this has long-term implications.
Maybe its just the state of mind benefit, that by having this starting point for a trading philosophy, this approach actually enables you to read price action better, or more open to what the action is telling you regarding future direction.
I guess some time I think Pure Price Action Trading is sort of like another cult....which becmes delusional and self-fulfilling in nature, replete with its share of group think, and oversimplification.
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