Learn Price Action

[Batterup]

Right, it is a PROBABILITY game. There are no cut and dried answers. But i will say this:

Learning price action will be a hell of a lot easier if you do just that and drop all the useless indicators, volume etc.

EVERYTHING FOLLOWS PRICE.

Anticipation of what price will do next is your goal, thats what learning price action is about, anticipation of WHAT COMES NEXT. learning price action is a misnomer because you JUST WITNESSED price action, correct?

http://www.youtube.com/watch?v=sO9EJKulnDM&feature=related

 

[Bingoking]

Quote from mazaltov:

Basically what I do is look for decent/high R:R setups when/if price lines up and you get a signal, start looking for volume hitting the ask (if long). If it comes you jump on board if its not there you back off. If it comes and you get on board and there's no follow through you get out etc.

So in short I start out as a scalp and try to let it grow into a swing taking some off at key pivots as the trade progresses.

That's it in a nutshell. This works for me as well. Scalp your way in, scalp during the duration and scalp your way out. Just watch the DOM. You can't do this off a chart.
The ideal place to trade is in a pit. Where you can tell what the market is doing by all the noise and activity (or inactivity) that is going on. Since I cannot do that the thing that gets me the closest to that is trading off what I am seeing in the DOM.

 

[Palatine]

Quote from hypostomus:

Here is the secret. Day after day, draw horizontal lines where price makes major reversals. Eventually you'll get it and be able to draw some of those horizontal lines yourself beforehand.

Very important advice from hypostomus! Draw these support and resistance lines in your chart before you even take a trade, Dobbes. The 15m, 1h, and daily charts will help you to identify them. To learn price action you need a little background information:

The market is a battleground for buyers and sellers. These two opposing groups come together every day and challenge each other to gain and retain control over the market. Now if you wake up one morning seeing that price is aggressively moving down, obviously sellers possess ferocious power. Going long, or even scalping on the long side is thus more challenging. If price is being rejected at resistance, sellers are starting to gain control and buyers will not come in until support is reached. Those minor swings you observe on the way down are just reactions, nothing more. They are not buying opportunites! You can observe this cycle in any market and this knowledge is what an experienced trader exploits to make a fortune.

Thoroughly read through what I wrote above again and you have a jumpstart toward learning price action. In fact it's nothing more than using common sense. Now comes your screen time. Practice, practice. Let the other guys gamble the market up and down if they want to.

 

[riskfreetrading]

Quote from Palatine:

If price is being rejected at resistance, sellers are starting to gain control and buyers will not come in until support is reached.

What do you call the people on the opposite side of a seller before resistance? A buyer of course. Your statement "buyers will not come in until support is reached" is therefore FALSE. Do you see the flaws in what you thought was solid knowledge in your head? You should be schooled before try to teach others.

 

[bighog]

Here is how "REAL TRADERS" watch those so called levels.

A higher high and a higher low and repeat that as long as PRICE does what price does and you are in a uptrend with normal retraces, CORRECT?

Reverse that and you are in a down trend. Thats how you view price ONLY to tell you what to do when price does what price will do.

No need to ask for a box of crayons with the chart service to draw lines. t all is there on the screen without crayons.

Ok, shopping time.

Do you use these? http://www.youtube.com/watch?v=HMU-wXsgyR8

 

[FanOfFridays]

Quote from bathrobe:

I have been looking to learn price action as well and came across the website Trading Zoo, which claims to teach this. If anyone has any info on any experience with Trading Zoo please share.
Thanks in advance
Chris

If you pay any money to any individual or website that is claiming to be able to help you figure out how to trade, you are making a mistake. There is nothing in any of these services or sites that's not freely available on the net. The people who start these sites are failed traders. Please remember that.

There is no substitute for experience. That's what you need, not an advisory service or 'teaching service'.

And for the person who said price action is unimportant and figuring out where to get in and out is what matters, in fact understanding price action is the best way to figure out where to get in and out. 'Learn price action' simply means learn to evaluate market movements withouth the 'help' of indicators or other non-price-related inputs.

 

[flyingiguana]

Quote from illiquid:

Lots of things make little sense. Usually things work -- until they don't. Ironically, you can probably make as much money betting on PASS as DON'T PASS.

The trick is to figure out both sides. Knowing your chart patterns isn't enough, you have to know when they will succeed and when they will fail -- in advance. In other words, the pattern subsequently becomes incidental.

but is that common sense really that common?

 

[slapshot]

Quote from Dobbes:

This is a common bit of advice that gets tossed around. 'Learn Price Action,' well, I would love to. How exactly should one go about 'learning price action?'

Suggested method to learn price action

1) lose money over and over with indicators
2) get frustrated and try more indicators
3) lose more money with more indicators
4) decide you are tired of losing money
5) strip all indicators off of chart except volume
6) set up DOM right next to this chart, by the hard right edge
7) use the same time frame constantly (I used 5 min.)
8) stare at screen and use IB sim-trade for a year

If you do this long enough, you'll start to see the buy/sell pressure and start to notice what a real breakout looks like vs. what a headfake looks like. And what a real reversal looks like vs. a pullback.

 

[slapshot]

Quote from Cocaine:

Right, just staring at the screen for countless hours is useless unless your mind is constantly evaluating whats in front of you. You have to go into it knowing, and believing, that prices move around for reasons and that its not just random. Sure there are pockets of randomness and thats associated with indecision. Learn to identify when there isnt indecision and a direction is forming and learn to jump in as soon as you can. The reason it takes a long time is because the are a lot of variables at play and slowly but surely you need to experience all kinds of different trading days to get your mind used to a lot of different scenarios.

an accurate and articulate summation

 

[bronks]

Quote from bighog:



...A higher high and a higher low and repeat that as long as PRICE does what price does and you are in a uptrend with normal retraces, CORRECT?

Reverse that and you are in a down trend. Thats how you view price ONLY to tell you what to do when price does what price will do.

No need to ask for a box of crayons with the chart service to draw lines. t all is there on the screen without crayons...

Watchout. Many, many, will say this is not a viable method, therefore money CANNOT be made this way.

No need for much at all. But then you already know that.