Making money using price action is impossible

[NoDoji]

Quote from bighog:

TRUE.............. and it is technical analysis that predicts the price action which allows us to ANTICIPATE the coming price movement.

I was just about to post the exact same thing, you beat me to it.

When I see price approach a previous resistance point on average or low volume beneath a falling moving average and stochs are nearly overbought (technical analysis), I anticipate a pending reversal. If the price action then stalls or pull back just a bit, I jump on the short train with a low-risk stop in place and the vast majority of the time I buy back at a cheaper price.

TA provides a setup and price action confirms it.

 

[bighog]

Right, then we pull the ODDS of such a setup from our memory and either take the trade or pass.

Gets easier as we travel down the same road to our favorite watering holes. Many think trading is easy in the beginning because of the cash out there to be had. UMM, YUMMY!!!!


Then when the new trader gets slapped around a few times he/she either decides to beat this game or throw in the towel. I decided to fight and it was a battle until the magic day when it stsrted to gel. When that day comes the progress comes fast. many do not have the moxie to reach that point.............or they go broke a few times first.
:eek:

PS: Definition for college trader. hahahaha

mox⋅ie  /ˈmɒksi/ Show Spelled Pronunciation [mok-see] Show IPA
Use moxie in a Sentence
See web results for moxie
See images of moxie
–noun Slang. 1. vigor; verve; pep.
2. courage and aggressiveness; nerve.
3. skill; know-how.

 

[southbeach4me]

leave it to these college "know it alls" to instruct us veterans...LOL

Then they wonder why they keep having to ask mom and daddy for some spot cash to help pay the rent.....

 

[cashmoney69]

I'd like to see someone actually SHOW others here on ET HOW to trade with price action only.

I'll rise to the challenge!. WHO else?....no one?...ah haaaa :eek: .


I'm going to try and start making some short videos this week in real time, no posting charts of trades AFTER the fact.

eventhough pa only isnt really my break and butter, givin my experience im rather positive i can do it. Regardless of the results, I'll provide them to anyone interested as a learning experience.

CM

 

[rachid136]

i can understand where u come from OP ...movement looks random to most people when they start ...it just suggests that u gave up or ur almost there.
however, what u could have done is ask the veterans "WHAT IS PRICE ACTION ? " if u will trade ignoring the importance of price action i'd say u already rich enough that u dont even need to trade. but hey its with money like urs that scalpers make a living.

good luck.

 

[cashmoney69]

The OP should also read this thread by Ironfist. http://www.elitetrader.com/vb/showthread.php?s=&threadid=146764&highlight=price+action about price action. Whether he got what he was looking for in that thread im not sure.

cm

 

[Specterx]

Quote from college_trad3r:

Just because you think price thinks it is going somewhere does not mean it will.
Face it, price action comes from a magical fairyland, unlike real technical analysis and money management.

How is "real" technical analysis different from price action? Oscillators, trendlines, S/R... these are all price action (or derivatives of PA in the case of oscillators).

 

[college_trad3r]

Quote from Redneck trader:

IMO

Price Action = The tick by tick movement of price

RN

So out of this definition follows price action is real-time. This means there are no backtests possible and you have to believe people on their words you can make money with the magical guru-technique of "watching price action"

Quote from NoDoji:

I was just about to post the exact same thing, you beat me to it.

When I see price approach a previous resistance point on average or low volume beneath a falling moving average and stochs are nearly overbought (technical analysis), I anticipate a pending reversal. If the price action then stalls or pull back just a bit, I jump on the short train with a low-risk stop in place and the vast majority of the time I buy back at a cheaper price.

TA provides a setup and price action confirms it.

So you use technical analysis and money management to create a set-up and just price action for confirmation. Sounds to me you're making money not because of price action, but despite it.

If price action can only be spotted in real-time then break down the movement of the so called price action.

An example you have price at 900, it can move to 900.25 or 899.75 the two possiblities of the range. 900 is a support zone.
Those are the only two possibilities when price is 900.
Then you have the frequency at which it alternates between two prices like 900 and 900.25.
frequency and range are the only two possible attributes of price action, if you discard real-time volume.

However frequency and range do not predict movement of price in anyway. Let's take the example price goes from 902 to 900 fast, stalls at 900, and alternates fast between 900 and 899.75. The alternating to 900+ from 899.75 goes faster than vice versa. Does this mean price wants to go higher?

The answer is it doesn't mean anything. If it does go higher it's not because the frequency is faster, the alternating favors one direction, or because real-time volume increases only when the alternating goes higher on a support. It only goes higher because of the support zone.

Technical analysis trumphs price action, and you know it.

 

[mike007]

Quote from college_trad3r:

However frequency and range do not predict movement of price in anyway. Let's take the example price goes from 902 to 900 fast, stalls at 900, and alternates fast between 900 and 899.75. The alternating to 900+ from 899.75 goes faster than vice versa. Does this mean price wants to go higher?
: [/B]

What does that have to do with anything? It is clear that you have no idea what you are talking about. Price action is the chart. It is higher highs, lower lows and so on. It is the patterns that are setup such as triangles, flags, etc.... These patterns give you clear risk/reward points that no TA indicator could ever give. Based on a triangle, I can tell you my exact entry, stop, and target. You cannot receive this information based on RSI or MACD that TA people use.

Price action is not all "real time" These patterns or different market structures can be based on all timeframes and can have massive patterns ranging for years. I have no clue that you are talking about.

 

[Cheese]

The topic of this thread can fail to make sense if the semantics of this debate have different meanings to the beholders which this thread has shown to be the case.

What you're dealing with is that most amateurs in general either cannot comprehend or cannot comprehend sufficiently the patterns and probabilities which the markets present each day repetatively. You utilize the points which the market in its gyrations offers daily by using a sufficiently effective trading system. You go to volatile and liquid markets to trade where the points offered per day are greater (eg CL,NG).

However price action so-called may amount to no more than an inability or unwillingness to use or trust any indicators or market metrics. It means reading the patterns on the screen up to the very latest live price to make buy or sell decisions. This PA 'reading' may just be instinct or practiced observations.

By contrast you can always go to where the money is. The money is in the daily gyrations (the upswings and downswings which follow each other).