price action systems

[flatron]

Quote from NihabaAshi:

You guys need to read between the lines about TraderZones...a walking contradiction or hypocrite about TA and SPAMMERS.

It's well documented here at ET about his past spam and TA debates via his usernames TraderZones and rcanfiel. It's just confusing to some when you see him bashing TA while supporting price action and bashing spammers while being a spammer himself in the past here at ET.

There are many branches of TA and he's talking about one specific branch involving indicators.

Simply, he sometimes gets confused when talking negatively about indicators via using the word TA. Thus, most price action traders use TA but do not use indicators...

That's true and is what he's really trying to say.

Another way to look at it, he's on record in stating that price actions like wedges, triangles, s/r levels are not TA because he considers TA only to be indicators.

Mark

Thankyou for that reply.
I definitely understand about the different ways people would manage a position, and the fear/greed element the accompanies it, but if everyone in the world understood for example that a certain candlestick pattern lead to an upmove (only an example) and everyone took the trade, would it still keep working the same?

Regarding the pa/ta thing, for what its worth I only really use price (not even volume) and I consider it TA (technical analysis)

 

[R. Raskolnikov]

Despite his name, TraderZones is NOT a real trader. Given his bitterness towards anyone who is successful it stands to reason he is probably not.

That being said to answer your question, IF something was revealed exactly to the whole world then THAT something would eventually not work exactly like that anymore but would evolve into another form of PA trading. PA would not go away, it would morph some.

That would be my best guess.

Quote from flatron:

that seems to be the general consensus among trading forums i visit. 'Traderzones' disagrees.

Doesn't really matter in realation to my question tho.

Would the markets somehow find a way to make something like priceaction stop working if someone explained it to the whole world on TV?

 

[flatron]

Quote from R. Raskolnikov:

Despite his name, TraderZones is NOT a real trader. Given his bitterness towards anyone who is successful it stands to reason he is probably not.

That being said to answer your question, IF something was revealed exactly to the whole world then THAT something would eventually not work exactly like that anymore but would evolve into another form of PA trading.

That would be my best guess.

Thanks.

 

[Kap]

Price - action to me is how market reacts to price, ie its movement.. grind, creep, pop, surge etc. after many screen hours you begin to read the signs. They are there, but it takes time to learn them and then to be confident in your actions. Over time the price movement begins to make sense. I dont have losing weeks, in fact i cant remeber the last -ve day. So no Indicators for me or Tech Analysis (whatever that is). In answer to the ops Q, if everyone did it then yes the market would be flat for the most part, but ther'e not, there still looking at macd, stoch, hh-ll or in search for some holy grail.

 

[bespoke]

PA is TA?

so if i look in the level 2 and I see an aggressive buyer who slowly steps up his bids and takes out offers, and i buy with him, i'm using TA?

i suppose the math i used was

price now > price before

cool, i'm a technical analyst

 

[NihabaAshi]

Quote from flatron:

Thankyou for that reply.
I definitely understand about the different ways people would manage a position, and the fear/greed element the accompanies it, but if everyone in the world understood for example that a certain candlestick pattern lead to an upmove (only an example) and everyone took the trade, would it still keep working the same?

Regarding the pa/ta thing, for what its worth I only really use price (not even volume) and I consider it TA (technical analysis)

The key here is that you're talking about a theory that everyone will do the exact same thing. That's not possible because of the discretionary nature we are as human beings.

Thus, your theory is only suitable for a mechanical system (not a discretionary trader) under the assumption that everyone will use that mechanical system...that too is not a reality.

Once again, reminder, for everyone to take that trade and get the same entry, exit et cetera...everyone must also have the same connection speed, same broker platform, same experience level, same discipline level and same everything...not reality...just theory.

Lets pretend we all used the same method, same broker, same connection speed, same computer, same personality, same experience, same everything...that implies everybody will be buying or everybody will be selling. Thus, how can everybody be buyers with no sellers or vice versa? The market will eventually stop functioning because everybody became buyers at the exact same time and then everybody became sellers at the exact same time or vice versa. Therefore, it's just one of those trading myths that if we share a discretionary trading method that's profitable it will lose it's edge.

Mark

 

[filter_sweep]

Also don't forget that different traders operate on different timeframes and with different amounts of capital to put to work.

For example, assume buying the bullish breakout from a flag pattern during a pullback in an uptrend was a setup that every price action trader took. A large fund may be buying that breakout on a 1 hour chart but it might look like chop to you on a 3 minute chart. The large fund cannot effectively operate on a 3 minute chart due to liquidity limitations, therefore their actions do not impact your "edge" on a smaller timeframe. Indeed they might be trading the same pattern as you, but since they're doing it on a higher timeframe, they're the ones actually moving the market from your entry to your exit.

 

[bobblong]

Price action can not stop "working" because patterns of price are actually the footprint or breadcrumbs the [institutional] smart money leaves behind once it has entered/left the market, and it can not control how the footprint will be created, due to sheer size and urgency of operation.

We get to follow the breadcrumbs.

 

[bobblong]

Quote from filter_sweep:

Also don't forget that different traders operate on different timeframes and with different amounts of capital to put to work.

For example, assume buying the bullish breakout from a flag pattern during a pullback in an uptrend was a setup that every price action trader took. A large fund may be buying that breakout on a 1 hour chart but it might look like chop to you on a 3 minute chart. The large fund cannot effectively operate on a 3 minute chart due to liquidity limitations, therefore their actions do not impact your "edge" on a smaller timeframe. Indeed they might be trading the same pattern as you, but since they're doing it on a higher timeframe, they're the ones actually moving the market from your entry to your exit.

The theoretical fund is not thinking like this. They will be the ones helping shape the market in the direction they desire, making the breakout happen, not buying the breakout with you.

 

[iuykcif]

Quote from R. Raskolnikov:

Despite his name, TraderZones is NOT a real trader. Given his bitterness towards anyone who is successful it stands to reason he is probably not.

That being said to answer your question, IF something was revealed exactly to the whole world then THAT something would eventually not work exactly like that anymore but would evolve into another form of PA trading. PA would not go away, it would morph some.

That would be my best guess.

Agreed. Envy and bitterness do not constitute a constructive attitude, especially if they degenerate in a distracting full time activity. [There is, in my perception, a similar attitude in some of the wikipedia guys (hopefully a small minority). ]

On the original question, my humble opinion is that it depends on the strategy.

In case of scalping strategies, it is conceivable (take it as an hypothesis) that a *good number * of traders all using the same strategy on a liquid instrument (with different entries due to contingent reasons, such as different time to start trading or strategy reason, such as entry randomization) would all experience an increase of performances.

I imagine that due to the nature of scalping strategies aimed to capturing market "noise". Several scalpers in action will probably not help the market having a definite direction for a long time. (The chaotic component would probably be reinforced against market making.)

Tom