If one never bothers to test anything, then you are correct.
PA "Setups"
- Thread starter dbphoenix
- Start date
- Status
If one never bothers to test anything, then you are correct.
It has been proven to not work for most and proven to work for some. The deciding factors were the overall trading plan and the trader (as in you).
Simply, price action trade methods are just one component in a trading plan. Thus, if the trading plan sucks, the price action trade methods aren't going to work. That has been proven. In contrast, if a trader has a good trading plan, price action trading works because the trader realizes there are other important things in a trading plan that's needed to help the price action method to succeed.
To be a successful trader...you need a lot more than just a trade signal. That's a tough thing for most to figure out because a lot of traders think all they need is just a trade method and nothing else.
Football analogy: A trade signal method (PA) is just one of the players on the football field. If the other players are missing...that football team that consist of one player will never be successful on his/her own.
First, don't get involved in trading if you truly believe such.
I've spent a lot of time with institutional traders to realize most of us retail traders are approaching the trading plan and trade methods the wrong way. I've also come to the conclusion that most traders should have never gotten involved in trading in the first place because they were inadequately prepared and it has nothing to do with their trade methods or their trading plan.
Simply, its you. You are the biggest key that determines if you're successful or not. Its a scary thought for some and may seem like an impossible task for others.
Note: I did not say you're the only key...just the biggest key.
Last edited:
What are the results of your testing?
First test was on the NQ used a range break method.
91 trades over the course of about 16 sessions.
53% profitable trades
Average winner 4.5
Average loser -3.75
Not particularly encouraging numbers?
Also sample too small?
Currently testing other Price action ideas like 'support becoming resistance', trendline breaks etc.
Much harder for me to test, though. Too much ambiguity.
Also, some methods seem to work better on some instruments than on others?
At least that's what it looks like, although maybe i'm just being 'fooled by randomness' as was suggested.
Either way, CL has shown some good profits so far using TA.
Opened a very small LIVE FX account. Seems to often be very erratic and I fail to observe anything that looks like it has the potential to be a profitable repeatable pattern.
I'll keep watching
91 trades over the course of about 16 sessions.
53% profitable trades
Average winner 4.5
Average loser -3.75
Not particularly encouraging numbers?
Also sample too small?
Currently testing other Price action ideas like 'support becoming resistance', trendline breaks etc.
Much harder for me to test, though. Too much ambiguity.
Also, some methods seem to work better on some instruments than on others?
At least that's what it looks like, although maybe i'm just being 'fooled by randomness' as was suggested.
Either way, CL has shown some good profits so far using TA.
Opened a very small LIVE FX account. Seems to often be very erratic and I fail to observe anything that looks like it has the potential to be a profitable repeatable pattern.
I'll keep watching
Price movements aren't random, so you don't have an easy out 
The numbers are not particularly encouraging but you're just starting. At 53% profitable trades you're doing better than most.
As for ambiguity, you have to provide your own definitions, e.g., what is a "trendline"? what is a "break"? how much of a break must there be in order for you to act in some way? which are unimportant and can be left alone? There should be no ambiguity at all once you've completed this task.
Yes, some methods work better on some instruments than others. I find a mean-reverting instrument to be simpler and easier. But I also want it to move. That's why I trade the NQ.
At some point, better sooner rather than later, you're going to have to characterize your market. This saves a great deal of time. Until you have determined the structure of whatever it is you're trying to trade, you are essentially guessing. This may be fun, but it doesn't move you forward.
The numbers are not particularly encouraging but you're just starting. At 53% profitable trades you're doing better than most.
As for ambiguity, you have to provide your own definitions, e.g., what is a "trendline"? what is a "break"? how much of a break must there be in order for you to act in some way? which are unimportant and can be left alone? There should be no ambiguity at all once you've completed this task.
Yes, some methods work better on some instruments than others. I find a mean-reverting instrument to be simpler and easier. But I also want it to move. That's why I trade the NQ.
At some point, better sooner rather than later, you're going to have to characterize your market. This saves a great deal of time. Until you have determined the structure of whatever it is you're trying to trade, you are essentially guessing. This may be fun, but it doesn't move you forward.
Can you elaborate on the emboldened.
Re characterization, see Appendix E here. Re structure, AMT is one structure, and that's explained in the same link. If you don't find that useful, there are others, but I can't be of any help there as I've never pursued any others very far (and there are some that I haven't pursued at all).
I never said anything about methods beyond just saying there's more to successful trading than trade signals. Thus, I'm obviously talking about issues that's not related to methods. This is a great difference between professional traders versus retail traders. In addition, I'm very specific about the word you as being one of the keys to trading. That too implies I'm not talking about trade methods.
As to what I'm talking about considering I'm obviously not talking about trade methods, I've discussed those issues specifically in Yukoner threads, psychology threads, debates with many traders that thinks the only thing they need to know about successful trading is a trade signal.
We as retail traders spend too much time focusing on "trade signals" while the professional traders spend most of their time focusing on things that retail traders think is not important (e.g. proper capitalization, proper trading environment)...all the other things that one should have in place in their trading plan. Most retail traders don't have such and when they do realize its needed...its either too late or they think they can just "wing it" (get by) until they have those things in place. That's when the market circles like sharks around these types of traders that are bleeding in the water sort'uv speak.
Anyways, you need to read threads where I've posted or just review my post history here at Elitetrader because its all there. I'm well known here for not providing links to information that I've posted here because I feel someone can obtain it all on their own without any further assistance from myself.
Edit: Look at it this way, I've seen many topics here at ET on the stuff I'm talking about (proper capitalization, proper trading environment, money management, discipline, stress management, psychology)...these are not popular topics. Yet, start a thread about a trade method...this forum goes crazy and the trolls shows up. Yeah, I admit, talking about trade methods is an easy topic compared to trying to talk about those other things and keep interested in.
The fact is very obvious...trade methods is a seductive topic. Its what most traders really come to this forum. Its their first stop on the list when their own trading is poor because to actually sit down and discuss themselves as the cause in how they related to their methods and the markets...that's a movie they're not interested in.
Last edited:
- Status