Price Action Theory

Thanks for the input to all so far. I am determined to put a plan into action very soon. Here is what I know so far (or at least the direction I am headed):

I don't know the markets intent until after its over. Put another way, you need 2 points, and 2 reactionary points to deem trend or sideways, so 4 total points.

Therefore I want to concentrate on what the next 2 points are most likely to be. DBPhoenix commented that price is continous - wide range bars, short range bars, wide range, short range, etc is what it looks like.

Logic leads me to this. I'm too late to jump aboard trends and fade ranges (I'm referring to a 1 minute entry chart) from a R:R perspective.

Next, points 5 and 6 become head and shoulders (sideways) and 3rd push (trends). So fade trends and play consolidation breakouts on the short-term while going with the significantly slower moving longer term timeframe.

I will add an important distinction here for me is waiting for the 3rd slice of data points before acting.

Again, comments and PM's highly welcome. Happy Sunday.

BD
 
Quote from BobbiDigital:



Therefore I want to concentrate on what the next 2 points are most likely to be. DBPhoenix commented that price is continous - wide range bars, short range bars, wide range, short range, etc is what it looks like.
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That may be what it looks like, but that isn't what it is. If you find yourself getting hung up on bars, create a line chart alongside your bar chart so that you can at least see what's going on in price movement while the bars are running in place.

Remember that price movement is a movie, not a slideshow.
 
For me bars are a tool to give price context and quantify risk.

What you might be saying is noting price levels and how market participants respond is something I continue to overlook. That the bars are designed to cloud the key S/R levels (and I am still susceptible)
 
Quote from BobbiDigital:

For me bars are a tool to give price context and quantify risk.

What you might be saying is noting price levels and how market participants respond is something I continue to overlook. That the bars are designed to cloud the key S/R levels (and I am still susceptible)
More...

How traders react to certain price levels and price movements is certainly key to an understanding how to trade via price action, and if your thread weren't about price action I wouldn't be pursuing this.

But I must reiterate that bars have nothing to do with price action, and if you want to truly understand price action or price movement, you're going to have to get past them, even if you eventually come back to them.

There's a whole world of price action that goes on within your bars that you have no awareness of.

As for risk, there needn't be any if you understand how and why price is moving one way or another.
 
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