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

Notice how price has stabilized in this zone now.It doesn't mean price wont take another leg down but who wants to go short here? is that a high/low probabilty setup?. And yet ,if today continues to play out the previous pattern we should drift sideways with a slow crawl up towards the 2.30 zone before making new lows and closing near the low.(so going short here would see you stopped out but ultimately price did go lower.) As i am typing this price just spiked down and made a new low-false breakout,or another leg down?
The market is designed to take both sides out and reverse- how many losing trades have you seen go in your intended direction?

What im trying to get across IF, is that you need screen time and a good understanding of how the market works before you can design a strategy to take money out.

btw if anyone thinks i'm talkin too much let me know and i'll stfu
 
Quote from oraclewizard77:

IF, at this point, you need to work on demo trading. Place some trades at what you believe is a setup for example in ninja trader.
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Of course I'm doing demo trading :) There's no way I'd use real money when I suck this bad :D

Once you have that probability, you need to determine success by how much profit vs loss you risk on the trade. For example, if you have a low win %, you will need to stay in the trade longer to achieve a higher level of profit. If you have a high win%, you can take profit quicker.
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So you are saying to calculate your risk/reward before you place the trade?

In other words, should you actually say "ok, on this trade I expect to make x ticks before losing y ticks, so my risk reward is x:y"?

Or "this setup should give me x ticks, but I know that if it fails and I lose y ticks, I should get out, so my risk reward is x:y"?

Because the only time I've seen people discuss their risk:reward is after the fact, which doesn't make any sense to me. They say "my average win was 10 ticks and my average loss was 4 ticks so my risk:reward is 10:4," which isn't only wrong, but also cannot be extrapolated to future trades.

So perhaps part of PA is knowing how far price should move in your favor (reward) vs. how far it shouldn't move against you (risk) before you place the trade. Is that correct?

Finally, you need to have enough money to be able to trade.
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How much is "enough" to trade 1 YM lot?
 
Quote from IronFist:

Of course I'm doing demo trading :) There's no way I'd use real money when I suck this bad :D



So you are saying to calculate your risk/reward before you place the trade?

In other words, should you actually say "ok, on this trade I expect to make x ticks before losing y ticks, so my risk reward is x:y"?

Or "this setup should give me x ticks, but I know that if it fails and I lose y ticks, I should get out, so my risk reward is x:y"?

Because the only time I've seen people discuss their risk:reward is after the fact, which doesn't make any sense to me. They say "my average win was 10 ticks and my average loss was 4 ticks so my risk:reward is 10:4," which isn't only wrong, but also cannot be extrapolated to future trades.

So perhaps part of PA is knowing how far price should move in your favor (reward) vs. how far it shouldn't move against you (risk) before you place the trade. Is that correct?



How much is "enough" to trade 1 YM lot?
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Hello IronFist,
i'll try to answer to your questions from the first post, which questions I find interesting and a key to success.
Here are the questions one by one:

- I do not know how to tell if price is just "pulling back" or "reversing" (without the help of MAs, which as I said in the beginning, I'm trying to do away with).

There is no way you know it exactly. You can look at the bigger picture in order to see whether you are near key S/R areas, but you can not be sure. At the time of the formtion it is just a guess - you assume it is a nice pullback, for example. In the time and practice your intuition helps. Many times I thouth it was a reversal - it was just a pullback. :)


- I do not know when to enter (ie. when the pullback is done)

Enter when the price starts moving in the direction of the trend. You also can go one timeframe lower and thare the trend reversal, of the microtrend, for example. Or just enter when you see the market starts moving again in the trend direction. Enterring is also just a guess. No sure way. many times the price stops moving just after your entry and starts moving against you or consilidating. If wrong with your guess - get out when the stop is hit. Don't be afraid. Many times if you get prelimenory out - the price continues the initial movement.

- I do not know what to do about determining exits. Ideally you would exit when price is done moving in a certain direction, but how do you know? And if it goes against you a little, how do you know if it's "just" a pullback vs. an actual reversal and you should get out?

You never know for sure. It is your desition. Sometimes you consider it is enough profit for you. You can go one timeframe lower and see when the microtrend stops developing.

- I do not understand how to draw correct trendlines in real time (as opposed to after the fact when it's easy to make them perfect)

It is not needed. In the reallive the perfect TL does not exist. Look for LL and LH or HL and HH. I find it better.

And at the end practice is all. Practice, practice and practice.

This is from my side
Cheers.
 
Quote from jonbig04:

Anyways IF there is no right answer to your question. You must define trend for yourself, in the time frame that you choose. One mans trend is another mans retracement, is just chop to someone else....its subjective. i would still encourage you to identify one aspect of PA and focus in on that.
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Two people can take a trade at the same time on the ES, one long and one short and both can make money consistently.

It may only be through watching the charts everyday for six months that you will being to form your own profitable methods. If you are not ready to commit everyday to watching the charts until it makes sense then you may not solve your problem. I would not wait for someones trading explanation to illuminate the mystery of the markets. In my experience success does not come to a PA trader through heavy analysis and thought. That is the "art" everyone has mentioned. Do not be discouraged or confused if you don't have it yet, just keep watching the charts...everyday for the whole day.
 
Quote from temptingtara:

IronFist learns (the elusive) PRICE ACTION

"(the elusive) PRICE ACTION"... turns out that with every additional page this description is becoming more and more perfect for this thread, and by an inverse measure to the constant drift away from... "IronFist learns"

A real mixture of quality and trash posts that exemplifies the saying that a camel is a horse designed by a committee.
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'Always with the negative waves man ,why can't you just see it's a beautiful day and think beautiful things man?' 'Oddball ,i can't make this piece of shit work,no matter how many positive waves i think'
 
IronFist,

I haven't read through all 500 posts, but it appears that you are trying to grapple with entries, stops, management, and exits simultaneously. Though it's possible that you may be successful with this approach, you will more likely become very frustrated, if for no other reason than how one views any particular price action "scene" will depend in large part on whether he's in it, waiting to get in it, waiting to get out of it, or just waiting.

If you're going to try to profit from every twist and turn, you will find it difficult to do so. A much easier and much simpler approach is to determine where and how to enter, then shift to management mode. Once there, all those other entries which you might or might not have taken will be irrelevant since you're already in. What anyone else does at those points is their problem.
 
Quote from temptingtara:

Perhaps only a man would see the quality posts I referred to as negative. Look, I'd consider a camel as something beautiful in its own way but not fitting for the intended purpose if it's a horse race, just like your posts miss the mark. Not saying you don't know what you are doing, just that IF doesn't.

You sound like you're smoking dope. When you're not stoned you'll realize beautiful days and trading PA are not directly related, but until then I'd suggest you play loud music and dance around a bit and then give us another gem of a post :)
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Oddball is stoned , i'm not ok? Thanks for the suggestion but i think i'll just try to make money! My quote wasn't intended as a slight against you! Actually i thought your post was funny. Sorry if you think my posts belong on the trash team the pm's i'm getting today would suggest they don't.Maybe the conclusion is pa isn't definitive .If that is true then the thread is actually providing some answers.
 
Getting short here 870 was the price i was looking for and we are near the 2.30 reversal zone.The position is in profit but it will probably lose for a while expecting some chop.
 
I found there are some gurus in this thread and gave a lot of good suggestions. I'm also working on creating my own PA system, and like to join this thread, if I'm permitted.

A little brief intro of myself. I have been trading FOREX, almost only FOREX, for about one year. I think I'm on the track. Though, I need some good guidance and more practice to make myself a CONSISTANT profit trader.

I think the best way to learn is presenting my homework and get comments from gurus at here. So here are my tradings yesterday night before sleeping on EUR/USD.

Totally 4 trades:
-7
0
+4
-7

The big picture is: it's the starting time of EUR session, and on 15min a triangle (the red lines in the picture) was forming. A downtrend on 1 hour chart. You could see the reasons I entered the four trades.

What I want to hear is:
1) Are these good trades? or just I had a bad luck?
2) Anything I need to know about the context, and I didn't?

Thanks for constructive comments.
 

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Quote from Lamont_C:

IronFist,

I haven't read through all 500 posts, but it appears that you are trying to grapple with entries, stops, management, and exits simultaneously. Though it's possible that you may be successful with this approach, you will more likely become very frustrated, if for no other reason than how one views any particular price action "scene" will depend in large part on whether he's in it, waiting to get in it, waiting to get out of it, or just waiting.

If you're going to try to profit from every twist and turn, you will find it difficult to do so. A much easier and much simpler approach is to determine where and how to enter, then shift to management mode. Once there, all those other entries which you might or might not have taken will be irrelevant since you're already in. What anyone else does at those points is their problem.
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The "pattern" I'm trying to learn first is "going long after successive HH/HL" (or the opposite for going short). But I am struggling with knowing when the trend has resumed upward and I should enter again (without cheating and using MAs).

I am also struggling with knowing where to put a hard stop. Previously I used the MA to stop me out (either for a loss or profit) and this made sense to me because it wasn't predetermined ahead of time. The market might move a lot or a little; I had no way of knowing ahead of time, but I knew when to get out.

I need some guidance on how to do it with PA. Maybe an algorithm or pattern or rule or something.

Intuitively I would assume that, saying I was in a long position, I would hold onto that position until Price Action told me to exit which is not using fixed targets or fixed stop losses. It would be equivalent to using an MA to stop me out, except I'm using PA and not an MA. However I don't know enough about price action to know how to do that.

Am I on the right path with that thought or not?
 
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