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How to Learn Price Action
- Thread starter SoCalTrader619
- Start date
Hey you know what SoCalTrader619
I'm sorry if we've given you too much information here.
The truth of the matter is that you have to find whatever allows you to look at price action and have it jump out at you clear as day what you should or should not do.
Once you do that, you can begin the process of learning how to read price action.
I'm sorry if we've given you too much information here.
The truth of the matter is that you have to find whatever allows you to look at price action and have it jump out at you clear as day what you should or should not do.
Once you do that, you can begin the process of learning how to read price action.
Quote from MandelbrotSet:
... and there's the rub.
You're going to have to use whatever speaks to you.
For Prof Logic, there's nothing better than a volume candlestick. That and a cup of coffee just makes his day ... so what he actually needs to see is price and volume
Whereas I realized a long time ago that I had to see price action without the element of Time (because it distorts pure price action), so for the longest time I would only use range bars.
However, there are traders who like to see the price action within the context of a time bar, and I found that when I tried this, I liked the way it felt, so that's what I like to use now (something about the dual bars that takes all the thinking out of the equation).
GL
Funny that you say that. I think I'm in the "range bar" phase right now. It's easier to see movement, vice all the long consolidation and periods of no movement. Maybe I'm looking in the wrong direction. I don't see why time is neccesarily a factor. It's all about "price action" and stock movement.
Quote from MandelbrotSet:
Hey you know what SoCalTrader619
I'm sorry if we've given you too much information here.
The truth of the matter is that you have to find whatever allows you to look at price action and have it jump out at you clear as day what you should or should not do.
Once you do that, you can begin the process of learning how to read price action.
No, by all means. Lets keep discussing this. It's what I need to help me decide how I can finally learn price action. I appreciate all the generous responses thus far.
Quote from Dustin:
First and best advice I would give to any struggling trader:
For one year you are only allowed to buy strong stocks, and only allowed to sell weak stocks.
If every trader on this site followed this, half of you would be profitable overnight. It's just against human nature so most can't follow the rule.
I know what you mean, but I think the reason is that people do not know why such things work. In your case you follow it probably because you know it worked for you (proof of the pudding is in the eating), but for someone else who does not see it the way you see it, he will never follow it consistently. He needs proof (not trading proof, but another proof). There is one for the stocks you suggest. It is just not provided/understood.
Learning to trade is harder than swimming. First the person has no reason to trust that winning in trading is possible (he does not see others making it, he has just words). Once he sees it (like swimming), he still needs to believe that there are fundamental laws that make it work. These laws are usually not known to the new trader, and he does not know what to look for (the thread poster is an example). It is not his fault. Trader do not write their laws and why they work. Then the new trader has to internalized the laws, and deeply understand them. Finally he has to apply them consistently. So it is long process, and it needs many things to work right for the whole thing to work right.
Quote from SoCalTrader619:
Ok... I know that most "successful" traders will agree that Price Action is the basic key to trading. I have been doing a lot of research into price action recently, staring at charts forming, watching the L2, T&S, etc. But sometimes I feel like I don't really know what I'm looking for. I'm hoping that some Price Action traders can chime in and give a bit of advice. What exactly do you look for in Price Action that gives you the information you need to place a trade? What can I do to enhance my Price reading skills? Most say it's hundreds of hours of screentime, but looking for what? I'd appreciate any advice. Thanks!!!
I had a long drawn out response then I realized it wouldn't answer your question. Go here instead.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=99283&perpage=40&pagenumber=1
To answer your question in my humble opinion you are looking for a trend, you want to enter and ride the trend forever if possible. a 50/200 period moving average cossover would be an example.
I always anticipate the next move of the market (ER) after the last candle is formed.
Base on the last few bars, what would the market do to hurt the most traders in the next few bars? Sometimes the patterns are obvious and I would hit it hard and add to the ER when I am correct. Other times I wait for a minor pullback and jump in with a small position riding the rest of the trend since I already miss the first big move.
The key is to figure out which stops are to fade and which are the real moves.
My feeling about the ER is it's all about taking out stops and hurting the mom and pop traders.
I used T&S, Ticks, charts of 1, 5, 20, 60 mins and daily.
After a while, the ER is pretty predictable, other times, you got stops.
Base on the last few bars, what would the market do to hurt the most traders in the next few bars? Sometimes the patterns are obvious and I would hit it hard and add to the ER when I am correct. Other times I wait for a minor pullback and jump in with a small position riding the rest of the trend since I already miss the first big move.
The key is to figure out which stops are to fade and which are the real moves.
My feeling about the ER is it's all about taking out stops and hurting the mom and pop traders.
I used T&S, Ticks, charts of 1, 5, 20, 60 mins and daily.
After a while, the ER is pretty predictable, other times, you got stops.
Quote from HolyGrail:
I really don't know if it is comparable or not, since I didn't place my buy setups on my chart. I use the .5 chart to enter/exit a trade. I like to enter a break double, or triple top signal on the .5 and I figure where the break will come on the .75. I split the difference and enter the trade.
Oh, I know. I just wanted to post a comparable chart so you could see how YOUR entries and exits matched up.
Quote from SoCalTrader619:
Hey ProfLogic, were those actual trades you took today, or just trades that you would have taken looking back on the fact? Seems like they would have been quite profitable. I'm just trying to figure out why you entered where you did.
Those are my S&P trade this afternoon. I strictly trade the eGrains (Wheat & Soybeans) in the morning and then switch to the eMini S&P or eMini DOW after 3 pm EST.
Those labels (programmed & computer generated) show me strong trading Support & Resistance oscillations and when a failure (HL or LH) is being created, where is am able to trade back toward a Breach (HH or LL), I look for specific objective triggers where I execute or exit trades.