Nothing Beats Price Action, Everything Else is Derivative

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i traded futures for years without market depth because i knew the pit traders could get orders filled no matter what the size.

I have a question though for the stock traders about the dom ? Well 2 questions actually...

1. if you are watching the DOm to make trades.. aren't you basically trying to just scalp for a few cents or a nickel? Wht good does the dom do you after say 5 or ten minutes once into atrade?

2. I hav ebeen thinking about playing a couple of stock recently..intra day only. I look at time and sales and see thousand of 100 share trades.. (so small) is there really that much slippage in stocks that large orders need to be broken into 100 share to 500 share lots?

If i try to place a 3000 share order in (qcom) all at once or a stop will the mkt makers cause me like 5 cents slippage?

THanks
 
It seems like you can't find a trader that doesn't claim to use PA exclusively anymore. I agree that PA is king, but I find that indicators can tell the story of price quite well too. As long as you become in expert in how your indicator of choice operates under different market conditions, it can be beneficial. I think the problem may be that traders try an indicator for a few trading sessions without truly studying it and then discard it as useless.

FWIW, I have a standard setting MACD histogram setup (YES a derivative of a derivative :eek: ) that reliably makes money. I use it in conjunction with S/R zones (PA) to make it more effective, but even standalone, I've back-tested it to have a positive expectancy. This is the only indicator other than volume that I use.
 
I look at it this way.

Price action is the 'heart', and an indicator is the 'pulse'.
I'd rather have a doctor listen to my heart than feel my
pulse to determine my state of health.
 
Quote from bobh1140:

Speaking of price action there was an article by Al Brooks title five minutes to fame in the E-mini in the may 2008 Futures magazine
More...

Al Brooks has 4 articles so far in Futures magazine. All based on ES 5-min charts. He does use trendlines and a 20-ema. He also did a presentation at the Futures I-Trade Show for about an hour or so where he went into depth about his trading style. Paul Rotter seems to be his hero.
 
I prefer to say: How do you understand price action?

Understanding the action of the players is the key. Understanding what drives the players. Understanding the innate natural born emotions of human beings when confronted with the most basic of all human emotions of "FIGHT OR FLIGHT"

Fear and greed are a part of everyones life day in and day out. Take those same basic emotions, instincts coupled with trading and you have just multiplied then many fold.

Love, money, self preservation etc are what rules you and me. We have accepted a very high degree of risk when we took on the trading animal as a job. The job we accepted places all the other basic human fears and greed emotions in further jeopardy because of the difficulty of the job we accepted.

Thus as a trader you must understand the territory . Understanding what drives others in the same game you are in will allow you to get to "KNOW" the other players on a very personal basis when never meeting them face to face.

http://www.youtube.com/watch?v=JZ9U4Cbb4wg
 
The entire picture is price WITH indicators. Indicators are very valuable tools and should be employed along with price. Volume is an indicator that can be discarded. It falls into the categories of too subjective and too much information. Thank you for your time. :)
 
M,

Predictably this thread is stewing along nicely.

There will never be consensus here because some people can derive all that they need from PA whereas most people simply cannot. They remain trapped within their minds.

When many people limit themselves to the extent of their current thinking they immediately pass these limits on to other people, who in turn agree because it reduces the pain of learning to them, which in turn gives the author a warm fuzzy.
And so woolly thinking continues to describe a perfect circle.

IMO one of the really tough jobs in life is to become aware of that which you are unaware that you are unaware of.

regards
f9
 
Amazing.. the length of this thread.

If you trade long enough, you eventually get around to accepting the premise.

It's also amazing how resistant the "under-schooled" are to accepting this. After all, it's "Paragraph 1, Page 1, Chapter 1", stuff.
 
When will you folks learn?

ALL trading is unreliable and it's just the nature of the beast.

With indicators or with out - you will still not be right or make money all the time.
 
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