So if price is manipulated (and I believe it), are the closes even that useful? Would an average bar behavior negating the close make more sense to follow? Hmm... will have to test.
Question regarding Brooks' book
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So if price is manipulated (and I believe it), are the closes even that useful? Would an average bar behavior negating the close make more sense to follow? Hmm... will have to test.
That is correct. Every bar has bulls and bears trading it. Thus every bar has a bullish and bearish case that can be made for it. The trick is finding which side has the slight upper hand and betting that way, with the stronger hand. That my friend is the nature of the market. It is an uncertainty we have to learn to live with and still make trading decisions. Volume represents $$$$ so if that means something to you it may be useful to you I generally don't use it because I just know for instance that a large bear bar closing on it’s low likely was made on larger volume than the previous bar so I don’t need to see the volume to determine that fact. Also any single big body bar, bull or bear, is actually a trend. To see this if you are looking a a big bear bar closing on it’s low on say a 5 minute chart dial down to a 1 min chart and it will be clear it is a bear trend. All big body bear bars can be considered to have been won by the bears and all big body bull bars are won by the bulls. There are ALWAYS, AT ALL TIMES, bull and bears trading, every bar. One side wins every time except in doji’s where they both are exerting about equal pressure on the market. That my friend is just the way it is, always has been, and will continue to be. The edge is determining correctly where the most pressure is and betting that way. And it must be done considering the larger context too as that too shows overall pressure and not just individual bar pressure.
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New terms for me, I'll look into them, thanks.
I'll keep away from discussing bar by bar / short term as it's not my expertise or interest.
However on a longer term trading situation if you were interested in finding trading contenders, low volatile stocks outperform high volatile over the long haul.
You can take this one step further; if you have a fairly large universe of stocks, those which close near highs summed/averaged over a long lookback period, they behave better than those closing near lows.
Breaking this down, low volatlle and those closing more in the upper bar range, they indicate better quality stocks.
Now some stocks for example might be in a prolonged drawdown, how do you measure?
The best way around it, just measure those which are above a typical MA, eg, 20 or 30 or 40 or 50MA. Maybe even a 200MA, doesn't matter, so long as you use a consistent yardstick for measuring.
Therefore, if you wanted to daytrade, then high volatile is better, so maybe better to trade dogs than quality.
Trading successfully over the long haul is extremely difficult. Thinking that being smart and buying a books and reading them adn analyzuing the mkt will make you money is a fools errand for sure.
It is a godo start but thats like saying you can read a book about flying then run a flight simulator and all fo a sudden youo can land a plane in a gale force wind at night on instruments. it is just not going to happen until you have real world experience.
I think your definition of edge is way too cut and dry. edges are definable but not always on a chart maybe you are your own edge along with a chart.
Prepare to lose when you start trading live real money. This is normal in games of skill with competition. Try to learn any sport do you think you deserver to win just because you read books and trained a lot? people are better than you in the beginning and maybe always but you wont know until you try. obviously you need more than price action if it isnt clicking for you and in demo you should be absolutely crushing it. this is one of the easiest mkts to trade in years especially right now.
It is a godo start but thats like saying you can read a book about flying then run a flight simulator and all fo a sudden youo can land a plane in a gale force wind at night on instruments. it is just not going to happen until you have real world experience.
I think your definition of edge is way too cut and dry. edges are definable but not always on a chart maybe you are your own edge along with a chart.
Prepare to lose when you start trading live real money. This is normal in games of skill with competition. Try to learn any sport do you think you deserver to win just because you read books and trained a lot? people are better than you in the beginning and maybe always but you wont know until you try. obviously you need more than price action if it isnt clicking for you and in demo you should be absolutely crushing it. this is one of the easiest mkts to trade in years especially right now.
I fear my biggest issue is not respecting the herd. The market makes absolutely no sense to me right now on a value basis. And so I'm missing out on all the hoopla because I don't believe in it. Irrationality is my kryptonite and I'm just going to have to learn to hold my nose I suppose...
Swing trading would fit better into my work life. I've been predominately drawn to futures due to their extended hours and high liquidity. I will look into swing trading quality stocks as you suggest, thank you.
Which I suppose is why I'm drawn to it. It's not about the value on a long term basis (which I expect is on average 50-80% less than it currently is). But for short term trades who cares?