"Price Action Only" traders - More likely to be successful?

Quote from pescador:

While it is very easy to distinguish between FA on one side, and TA and PA on the other, it is really difficult, if not impossible to distinguish between the latter 2.

For the sake of clarity let's assume that both pure TA and PA traders do not care for fundamentals at all. If they, do, they are not pure TA/PA traders.

Both make trading decisions based on what the price is doing at the moment, giving them probabilistic expectations on what is going to happen next.

So how we define what "at the moment" and what "next" means?
Is "at the moment" the current second, minute, hour, or day, or candlestic/bar?
Is the "next" the next second, minute, etc?

This is an important question, because PA and "naked" PA traders often pride saying that they exclusively care for what the price is doing "at the moment", and do not care for what price did historically. Many allege that both TA and indicators are about historical (therefore for them "irrelevant") price movements, and PA concerns only about "current" movements.

But even if we define "current" as buying when price is going up, and selling when price is going down, it is obvious that an element of comparison must be there: compared to what is it going up or down? Compared to historical price movement and levels, whatever that means: the last second(s), minute(s), hour(s), day(s) etc.

Momentary price alone is completely meaningless.
It gains its meaning, its possible interpretation useful for probabilistic expectations only through its relation to previous levels/movements, to its own historical context.

So the difference between TA and PA is neither in the timeframe (do you care for the "current" ticks/bars/seconds/minutes/years) nor in the relevance of historical data.
Nor can it lie within the use of charts, DOM etc. because all of these are merely visual representations of price data series.

Many cite the indicatorlessnes/nakedness/pureness of PA as opposed to the use of indicators by TA followers.
All indicators are merely representations of historical price movements/events/levels pertaining often to a higher timeframe, on the currently visualized timeframe.
Being that, ideally they can help to reduce the amount of charts etc. one has to observe at the same moment. They are also parts of PA, or at least of its context.

The problem with indicators is not their existence or use, but their abuse.
They can easily lead to an information overload, and distraction.
So the problem seems to me much more a problem of distraction and focus.

Obviously, how much information an individual is capable to process at the same time and amalgamate into a meaningful, useful information leading to reasonable probabilistic expectations, and how much information leads to overload and loss of focus, depends on the capacity of the individual.

It is obvious, that the optimum amount of information, that still does not cause an overload and loss of focus may lead to better trading decisions. May, but does not have necessarily to.
A lot still depends on the trader's psychological preparedness.

So I would suggest to rather distinguish between processable amount of information opposed to information overload, than between TA and PA.
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I do notice that people calling themselves PA traders do tend to focus on very, very short timeframes, but I actually don't think that's necessary. Like I said, I trade only based on price, but I actually trade much longer timeframes than the typical scalper, with many of my trades actually leading to overnight holds, so I agree that historical context can matter (and probably always does matter) even in PA trading, unless you are explicitly scalping, but that's only one type of trading.

But to your point about "information", I think that PA traders and TA traders would often differ about what even counts as information, as opposed to noise, so that what to a TA trader would count as just the right amount of information would actually be the same as no information for a certain kind of PA trader.
 
Quote from goodgoing:

Trading is not rigorous science and people can claim their own definitions and standards as long as they define them properly and are consistent with their use. I like the definition Michael Harris has offered for price action trading:

"Price action trading is a methodology that bases trading decisions only on realized price levels, current and historical."

http://www.priceactionlab.com/Blog/2010/11/price-action-trading/

This definition automatically excludes indicators and any other derivatives of price but retains chart, candlestick patterns and other micropatterns as well as any algorithmic trading that is based on traded price levels.
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I agree that all of the derivatives of price and anything which refers the trader to a price point which was not traded, i.e. trendlines, seems suspect.

But, again, the fact that I think those trading aids are conceptually flawed doesn't mean that they can work for some.

Even if PA trading adherents stick strictly to the elements Harris considers valid, though, and doesn't get led astray by tools containing conceptual flaws, does that make them better, on average, than traders who mix and match their trading inputs? Or are PA traders still going to fail at the same rates as others, even if they are less under the sway of conceptual mistakes?
 
Quote from logic_man:

I But to your point about "information", I think that PA traders and TA traders would often differ about what even counts as information, as opposed to noise, so that what to a TA trader would count as just the right amount of information would actually be the same as no information for a certain kind of PA trader.
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I personally do not believe that such a thing as "noise" (labelling "useless" or "uninterpretable" "random" price movements) exists at all.
I consider what many call "noise", to be actually a very precious information.

But I agree that "information" can also mean very different things to differently conditioned minds.
 
Quote from Zr1Trader:

His full position is 6 contracts, enter 3-2-1 approach.

These videos are of a guy in this brokers assisted trading room, the broker calls everything out and the ones in the room just follow. The guy on youtube posting the videos started with 50k and is now well into 6 figures. you can bash it all you want .....I was just posting a link illistrating how someone succesfully uses PA. I'm not here to force you into believing anything you don't want to. If you take the time to watch every single video you will change your tune.

Or should I just tell you what you want to hear, nobody can be profitable trading that way.
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Works well. His biggest position gives him the biggest gains. Gets stopped on smallest position.

Personally prefer ALL IN ALL OUT though.
 
Price is essential but I wouldn't exclude TA at all. Much of TA is based on price, just know that your indicators and other tools will be wrong in certain instances. There's no magic bullet out there; just use all the tools that you feel are helpful in achieving your goals.
 
Quote from athlonmank8:

PA by itself can be filtered. There's more potential in PA if not used by itself
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Interesting statement athlonman. Can you please elaborate? Thanks
 
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