Price Action VS Chart Pattern based strategies

[rajesheck]

In my experience, chart patterns for short term trading are not at all useful. Chart patterns in general are a result of the human need to create visual order out of chaos, and to provide some sense of meaning and stability where there isn't any.

For short term trading, what I call "Price Patterns" is far more effective. What is current price in relation to past price levels? What is current price in relation to past DAILY highs, lows, opens, closes? Has that Price Pattern repeated? For how long, and how often? And to what results?

Nail that with even a single instrument, and you'll be on your way.

Price patterns say something and time confirms it.

 

[Trading Education Buyer]

Nevertheless, people want to treat the world as if they could predict and understand everything. As a result, they tend to seek patterns where none exist and to invent the existence of unjustified, causal relationships. Traders don't want to trade probabilities. Yet trading is a probability and money management game.

At the most basic level, people must trade by processing information. Unfortunately, we're not very efficient information processors. We have a lot of biases that enter into trading decisions.

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[comagnum]

I am a classic chartist - always have been. Most equate to to a skill, not so much art. With stock indexes the market internals are very important - The up/down volume, new highs/lows, advancing/declining, tick, VIX, put/call options, etc.. They offer strong clues as to if the day may be a trend day or when a sharp turn is nearing. I think it gives a real edge - there are certain thresholds when the computer buy/sell programs kick in based on the internals.

 

[speedo]

People, use what works for you. If time and volume work...use them. If monitoring market internals help you ...use them but be careful about absolute statements. I used to pay attention to all that stuff but over the years have distilled down to simply price structure and my rules over a couple of time frames. That works for me.. The only thing you HAVE to do is be consistently profitable, there are no limit to the ways to do this.

 

[rajesheck]

People, use what works for you. If time and volume work...use them. If monitoring market internals help you ...use them but be careful about absolute statements. I used to pay attention to all that stuff but over the years have distilled down to simply price structure and my rules over a couple of time frames. That works for me.. The only thing you HAVE to do is be consistently profitable, there are no limit to the ways to do this.

Very True !

Art has no limit