Price Action Traders

[bearmountain]

Quote from wrbtrader:

Thus, every trade I take is not the same size because every trading day is not the same especially when volatility changes...volatility that often do change.

Hope the above info helps.

Mark

Mark, if you think appropiate could you please outline how you read price action? do you look at classic HH/HL etc.

second how do you measure volatility, what factors go into your analysis of what type of trading day will it be, do you determine that before the market open etc.

Thanks, just trying to learn. Its good to hear how actual PA traders do it.

 

[Arthur Deco]

Hey Gabby, thanks again for the book precis. Saved me a bunch of money. So many people here like it that I was about to break my rule never to buy another trading book again. My profit stop triggered at 1821 so I am avoiding looking at the market until the close by annoying people here. Interesting conversation you are having with Mark. Sounds familiar, haha!

 

[deaddog]

How to read Al Brooks:

As NoDoji said start with the glossary.
Next read the “Trading Guideline”

Randomly pick a chapter and read it.
Spend 2 or 3 days looking at a 5 minute chart with no indicators.
Re read the chapter.
Re read the guide line.

Rinse and repeat.

It is a tough read and it takes a while.

 

[Arthur Deco]

Are you making (more) money using it?

 

[wrbtrader]

Quote from Gabfly1:

Immensely. I was under the false impression that you only traded TF. My mistake. Just one follow-up question, though. You mentioned possibly adjusting trade size, exit points and so on in TF based on the price action and volatility in other markets. But does not the volatility in TF speak for itself insofar as TF is concerned? Stated differently, how, exactly, would another market give you a more convincing signal about what to do with your TF trade than TF's own price action? For example, if you were long TF and it held firm, would you exit if ES began to falter?

Yeah...TF own volatility speaks loudly. However, it has its duration during the trading day where the price action is choppy, noisy or just darn confusing. When that happens...especially after I enter a position, other markets I follow can help clear the picture just as long as they too aren't doing the same thing.

If they are...I'm sidelined (not trading).

To answer the other part of your question...if I was Long TF and ES falter...I would not exit my position based upon the price action of one market outside of TF which is why I follow several different markets. Thus, I need to see the price action in several different markets...not just one.

Mark

 

[Gabfly1]

Quote from Arthur Deco:

Hey Gabby, thanks again for the book precis. Saved me a bunch of money. So many people here like it that I was about to break my rule never to buy another trading book again...

Don't necessarily go by my assessment alone. I only read about a third or so of the book and leafed through the remainder. I was thrilled with neither the content nor the presentation. But that's just me. Since other people here at ET swear by the book, perhaps there are nuggets inside that I missed. However, as deaddog and others elsewhere reported, it is a tough read. I find this surprising since one would think that a doctor should be able to express himself about something as relatively pedestrian as price action somewhat more clearly and succinctly.

 

[deaddog]

Quote from Arthur Deco:

Are you making (more) money using it?

If you are talking about the book.

Yes it has helped the way I think and trade and the bottom line.
I won't give all the credit to the book as my system was evolving and I may have ended up in the same place without it.

Every little bit helps.

 

[wrbtrader]

Quote from bearmountain:

Mark, if you think appropiate could you please outline how you read price action? do you look at classic HH/HL etc.

second how do you measure volatility, what factors go into your analysis of what type of trading day will it be, do you determine that before the market open etc.

Thanks, just trying to learn. Its good to hear how actual PA traders do it.

Sorry, I don't discuss the in-depth details of my trading approach other than just the general stuff I usually mention here at ET. There's many ways to measure volatility without using an indicator. You can use the price action of another trading instrument like the VXX exchange traded fund. You can use contraction/expansion analysis, you can use narrow range analysis, you can use HH/HL, you can use global economic calendars, intermarket analysis or whatever and in any combination. There's no magic bullet...pick a topic, learn and apply a few years and eventually you'll see the volume or volatility in price itself.

To keep it general, to answer the other question, I look at volatility after the close (hindsight), before the open (help with my initial positions) and during trading (adapting to changes).

Last of all, trade signals is just one chapter in the book of trading and not the most important chapter although it is important. If you haven't figure that out after a few years of trading...best to call it quits.

Mark

 

[Arthur Deco]

Thanks for your reply, DeadDog. I am an OldDog, nearly dead. Sometimes that final push to trading success comes unexpectedly. If indeed the book did it to some extent for you, it was a great investment.

 

[Gabfly1]

Quote from wrbtrader:

Yeah...TF own volatility speaks loudly. However, it has its duration during the trading day where the price action is choppy, noisy or just darn confusing. When that happens...especially after I enter a position, other markets I follow can help clear the picture just as long as they too aren't doing the same thing.

If they are...I'm sidelined (not trading).

To answer the other part of your question...if I was Long TF and ES falter...I would not exit my position based upon the price action of one market outside of TF which is why I follow several different markets. Thus, I need to see the price action in several different markets...not just one.

Mark

Okay, I'm just going to be a devil's advocate and general nuisance here. Since you follow other markets and at times trade them as well, then if you are holding a position in, say, TF and its price action is choppy and noisy, whereas one or more of the other markets you follow and occasionally trade are relatively clear, then why would you not switch to one of those other markets during such price action, even if it means exiting a go-nowhere TF trade? Personally, I can't see the virtue of remaining in a choppy, noisy and downright indeterminate market.

As for the other part, how many different markets would have to falter before you gave up on a performing TF trade? And if it is a multiple, then how often does that sort of thing generally happen in your trading, where these other markets collectively provide more usable information than the traded market itself? I'm not being argumentative. Genuine question.