IN THIS THREAD: IronFist learns (the elusive) PRICE ACTION

[nukethewhales31]

Quote from pclark:

OK, I will bite -

When has enough buying happened to bring in sellers? How do you know?

The only way I can tell is by watching the momentum of price on the chart. The bars can tell you also but I also look at how fast they print. I am sure you could take it back to them DOM but my mind is just not quick enough to keep w/the DOM

suppose to read that manual before asking questions
enough buying has happened when the amount of buyers has decreased and the amount of sellers has increased... plot a SMA faster period around lets say 20 on your chart price crosses the line up price continues up and up and up the further you are from the line the more the amount of buyers there is in the market buying.... as you go further up the line the market has made its a major move and need to find balance... sellers come into play and push price down and thus the move fails or is valued at that price sma catches up and price consolidates. no DOM let go of DOM for me its not important.

Price consolidates because there is indecision by both buyers and sellers.

indecision how? maybe there is decision maybe they have agreed that this price or price range is a reasonable price and they exchange in this range.

These are things I think we can all agree on (Possibly ) but what I have trouble deciding is what is likely to happen next?

no one knows what will happen next but by applying probabilities we can know how to react to what does happen.

If we are in an uptrend and I see HH and HL and then consolidation how do I know we are continuing to go up or going to go down? This is where I draw my S/R lines and say the hell w/it I don't care if we go up or down I am just going where the price goes whether its up or down and jump on once the price breaks one line or the other.

well my answer to this is your chasing price. if price is creating HH/HL then the market has bias directionally but that does not mean that it will continue in that direction because its making HH/HL. if you draw s/r lines on a chart what does that do for you but fill your screen with lines and when price strikes one of those lines you go "see" but if you have 15 lines on it then it has a chance to hit and turn at or near one and this is a perception that leads nowhere.

I would love to hear how others determine the future direction of price once it enters a consolidation patter. I know that some patterns like flag patterns usually end up in a continuation of the trend but how do you know? Is it just your playing the odds once you spot a certain patter?

Paul

do you want to determine the future direction of price in relation to what it is right now ..... or.... do you want to be profitable trading? thats a serious question ... decide to be profitable and be profitable ... want to determine the future call mrs cleo... her book im sure is empty.

whats the most important part of placing the trade waiting before the trade... entrance...waiting in the trade... exit ... money management?

think about this a casino is profitable but which slot machine is going to throw out 100k dollars the next roll.... do they care?

 

[cashmoney69]

iron did you not trade today?..can you put up a chart?

 

[IronFist]

Quote from nukethewhales31:


do you want to determine the future direction of price in relation to what it is right now ..... or.... do you want to be profitable trading? thats a serious question ... decide to be profitable and be profitable ... want to determine the future call mrs cleo... her book im sure is empty.

I do not understand this.

How are "determining future direction of price" and "being profitable trading" mutually exclusive?

 

[IronFist]

Quote from cashmoney69:

iron did you not trade today?..can you put up a chart?

I placed one trade today but my OEC demo software messed up. The entry arrow was placed on the wrong candle at the wrong spot, and then it randomly closed out my position a few minutes later.

Even tho it was profitable, I allowed for far too much drawdown.

To be realistic, I cannot allow for more than 20 ticks drawdown on the YM per trade due to my account size.

 

[big_cabrito]

Quote from vingbel:

So far, no one has really come up with how to do that as it's also agreed to a good trader is busy trading!

don't know about that...

Iron keep up the good work, yer doin' good...

 

[nukethewhales31]

Quote from IronFist:

I do not understand this.

How are "determining future direction of price" and "being profitable trading" mutually exclusive?

determining the future cannot be done but being profitable can you can try to predict the future all you want but i think that what you want to be, is profitable.

human nature instinctively wants to roll things up into formula to explain things.. people search their lives to find answers for why things happen. all things are cause and effect price moves up buys slump off sellers come into play sellers push down sells slump off buyers come into play

buying happens so sellers react to buying and sell as a reaction cause and effect selling has taken over and pushed price down so buyers come in ... cause and effect.

there is buying and selling equally in both directions... price consolidates

one person comes into the market with deep pockets and moves price more people jump on to a seeming rally at the top but buying isnt reinforced so sellers take over pushing it back down.

price action doesnt predict the future you can go price made a HH and HL so next candle will be up as well if it worked like that the market would be broken

what about HH/HL ->HH/HL ->HH/HL->LH/LL-> HH/HL -> HH/HL

happens alot it doesnt help you predict the future

prepare yourself for the future dont predict..

 

[IronFist]

You didn't really answer my question.

edit - unless you're suggesting to randomly take a position and just not close it out if it goes in your favor... :/

 

[nukethewhales31]

Quote from IronFist:

You didn't really answer my question.

edit - unless you're suggesting to randomly take a position and just not close it out if it goes in your favor... :/

i did answer your question read again

you can not predict the future with accuracy thus you are taking random entries with probability of things happening in the future aka preparing for when price moves in your favor and determining your approach in both cases. thus predicting the future is nothing more than random entries and even less than 50/50 most people say they win 40% of their trades but because of management they are profitable... the market has 3 directions up down /sideways 33% trade the present not inrelation to the past and there is 2 up and down ..50% randomly. point is we have things like mp/pa/indicators to help understand the market and predict but them in themselves dont make you profitable.

youll never be able to read the past and then trade the future as hard as that is to admit.

but when the future becomes the present and youve prepared you become successful in the future.

so if you ask what is pa... what in pa do you want to know... how to read and understand the market or how to be profitable.

one leads to the other quickly... but the other doesnt lead to the one quickly.

so when you look at the chart without anything on it clear your mind watch the next bar form... understand why and how the bar forms and why it ends up looking the way it does in live action not after its closed.

so whats your ultimate goal?

 

[IronFist]

Quote from Bingoking:

It starts with hours of screen time watching. I will say up-front that I am not a full-time trader. You might want to start here:
http://www.interactivebrokers.com/en/general/education/priorWebinars.php?ib_entity=llc
If you scroll down there are two webinars in particular by Jack Broz. One on Feb, 14, 2008 and one on Feb. 8, 2007. These will get you started in the right direction. I suspect there are some others on this list.

What is his reasoning for saying you should buy/sell at prices with low historical volume on the DOM?

Also, watching the vid of his DOM... it updates like once per second... is that normal? When I watch my DOM, it updates like 50 times per second, which is why I say DOM moves too fast for humans to trade off of.

 

[brownsfan019]

I did not watch the vid's Iron but my guess would be buying/selling at low volume areas could be something to consider b/c historically those areas have shown to be quick rejection areas.

In other words, where this is heavy volume = big players gathering contracts; low volume = areas that typically were quickly rejected due to quick and swift buying/selling and no interest by a counterparty to fight back.

In theory, the low volume areas could show where the bulls or bears have previously come in w/ 100% conviction to defend meanwhile the opposite traders said no thanks.

Assuming that theory is correct, you could attempt to pick off these spots assuming what happened previously will happen again. I'm not sure how you would find these areas (perhaps the videos discuss this) and would obviously require some testing.