Nothing Beats Price Action, Everything Else is Derivative

[rickf]

Quote from gymratnyc:

Will this book teach me price action?
http://www.amazon.com/Price-Action-...d_bbs_1?ie=UTF8&s=books&qid=1210844242&sr=8-1

Books will help, sure. Websites and chats like this can help, too.

Best thing is to park yourself @ the screen and watch the tape/charts to see what happens and what the relationships are, and when/how they occur. Think of it as "market flight time" -- it won't come in a day or week, but after a long time of watching and observing.

Paper-trade what you observe and see how you do....reading about it is one thing, but there's no substitute for seeing a 'live' trade move to learn price action. At least if you blow out a paper-trade account, you'll still sleep well at night and won't risk anything but your time and brainpower.

 

[Epiphany]

Quote from MandelbrotSet:

Nothing beats price action, everything else is derviative and there is an inverse relationship between the complexity of the indicator (if one is used at all) and it's usability as a reliable trading tool (iow, if you do use an indicator, keep it to one, and KISS).

All indicators are a derivative of price, yes. And so then you jump to the conclusion that the derivative therefore must be less useful than price action itself

Consider the concept of 'NOISE' in a data series - which an indicator can help filter out

 

[Joab]

Quote from fearless9:

You must be another Sisyphusian struggle
devotee Joab.
Excellent example Gnome.

If I told you that my next ´n´trades should produce a set of ratios consistent with the last ´n´trades and the last 3* n and 6*n trade outcomes, would that expand your thinking Joab, or would it leave you scratching your head for yet another defensible position.

regards
f9

The only thing that I scratch is "my head" at how complicated all you folks make a simple process.

Trading is only a "3 horse" race - up down or sideways.

Figure this out and follow the path of least resistance and your golden.

But if you really want to add all that math then go for it.

I will be at my new 6000 sq ft cottage in Muskoka most of the summer relaxing while all you smart guys keep making life more complicated then it needs to be.

 

[MandelbrotSet]

Quote from rickf:

Books will help, sure. Websites and chats like this can help, too.

Best thing is to park yourself @ the screen and watch the tape/charts to see what happens and what the relationships are, and when/how they occur. Think of it as "market flight time" -- it won't come in a day or week, but after a long time of watching and observing.

Paper-trade what you observe and see how you do....reading about it is one thing, but there's no substitute for seeing a 'live' trade move to learn price action. At least if you blow out a paper-trade account, you'll still sleep well at night and won't risk anything but your time and brainpower.

Thanks for your comment, rickf.

The only thing that I would add is to realisticaly expect to spend 2 or3 years learning it. If someone can do so at a faster pace, so much the better for them, but IMHO it takes a while for people to really master anything.

 

[bighog]

rickf

But please inform the person that papertrading is fine to better grasp the mechanical workings of the order entry platform and can be used as a pre-flight check, internet connections, etc, etc.

BUT, papertrading needs to be limited. To much papertrading time can actually hurt a traders progress because it can create a false sense of security. I myself did like ZERO papertrading when i started, i was so excited i just went in with live bullets and let the chips fall where they may. Good training for sure, no fudging allowed.

To really understand price action at the core you must feel in your gut what a real mistake feels like. Papertrading should be viewed as kindergarten. The kindergarten time is limited and BOOM, you are thrown into first grade to start the journey of real life. then the GRADES matter.

Papertrading losses are not gonna slap you in the face, they will not make your retirement account look like you can not move to the sea shore and watch the hot chicks . Think of papertrading like shacking up with your girlfriend, now think of getting married to that same girl. Not the same deal. ..

 

[MandelbrotSet]

Quote from Epiphany:

All indicators are a derivative of price, yes. And so then you jump to the conclusion that the derivative therefore must be less useful than price action itself

Consider the concept of 'NOISE' in a data series - which an indicator can help filter out

I agree with you.

Which is why I included the use of one indicator if need be, and to KISS and said before that I am ecumenical in my approach to trading off of price action (there is always more knowledge to learn, knowledge to confirm, knowledge to share with other traders).

Thanks

 

[HolyGrail]

Quote from Jayford:

price action at EXACTLY R3 if using pivots.

Exactly!!! Not many rallies make it to r3 and continue to rise.

 

[fearless9]

Quote from Joab:

The only thing that I scratch is "my head" at how complicated all you folks make a simple process.

Trading is only a "3 horse" race - up down or sideways.

Figure this out and follow the path of least resistance and your golden.

But if you really want to add all that math then go for it.

I will be at my new 6000 sq ft cottage in Muskoka most of the summer relaxing while all you smart guys keep making life more complicated then it needs to be.

You silly boy Joab.

regards
f9

 

[fearless9]

Quote from bighog:

rickf

But please inform the person that papertrading is fine to better grasp the mechanical workings of the order entry platform and can be used as a pre-flight check, internet connections, etc, etc.

BUT, papertrading needs to be limited. To much papertrading time can actually hurt a traders progress because it can create a false sense of security. I myself did like ZERO papertrading when i started, i was so excited i just went in with live bullets and let the chips fall where they may. Good training for sure, no fudging allowed.

To really understand price action at the core you must feel in your gut what a real mistake feels like. Papertrading should be viewed as kindergarten. The kindergarten time is limited and BOOM, you are thrown into first grade to start the journey of real life. then the GRADES matter.

Papertrading losses are not gonna slap you in the face, they will not make your retirement account look like you can not move to the sea shore and watch the hot chicks . Think of papertrading like shacking up with your girlfriend, now think of getting married to that same girl. Not the same deal. ..

I agree with you bh.

I would suggest paper trading only to become accustomed to the order entry front end and of course the speed if you are on something like ES.
Everything else should already be worked out before hand.

regards
f9

 

[gymratnyc]

I'm not sure what you guys mean by price action. Is it like learning to read the tape like in Jesse Livemore's book, Reminiscences of a Stock Operator? So you guys don't use indicators to read price action? TA patterns? Resistance or support lines?

Quote from rickf:

Books will help, sure. Websites and chats like this can help, too.

Best thing is to park yourself @ the screen and watch the tape/charts to see what happens and what the relationships are, and when/how they occur. Think of it as "market flight time" -- it won't come in a day or week, but after a long time of watching and observing.

Paper-trade what you observe and see how you do....reading about it is one thing, but there's no substitute for seeing a 'live' trade move to learn price action. At least if you blow out a paper-trade account, you'll still sleep well at night and won't risk anything but your time and brainpower.