Son of If You Can Draw a Straight Line . . .

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Quote from bmwhendrix:

Yes, I do need to clarify this. (Actually knew it did not read right when I wrote it, but was in a hurry.)

PA is based on price movement and how price reacts at points of interest.

After considering said movement and reactions a situation may have what a particular trader considers enough of a probability of movement in a particular direction to place a trade.
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As with so many things, yes and no. I stressed the probability aspect of this back at TL, but since so few people understood probability, I came up with the idea of the straight line because the whole probability thing is ancillary. And perhaps not even that.

Trading price is, among other things, about judging the balance between demand and supply, or buying pressure and selling pressure, and once one has determined which has the upper hand, he trades according to the path of least resistance. This has nothing to do with prediction or expectation or forecasting or anticipation or even probability. It has everything to do with understanding what one is looking at and judging which side has more traction at that moment. If one judges correctly, he wins. If he judges incorrectly, he loses. If he doesn't know enough to make a judgement, he does nothing.

The key, then, as I've said once or twice, is to understand just what it is that one is looking at, then determine who's got the wherewithal to make a move. If one doesn't understand what he's looking at, much less be able to make this determination, then he's just guessing, and it's not difficult to understand why he'd be looking for someone to tell him what to do, though why he's trading at all is a mystery.

Those who want to pursue this can read the pdf on demand and supply I posted yesterday. Those who don't want to are certainly not required to. But then they won't learn anything.
 
Oh, cmon teachers. Surely you can apply the same principles to daily/weekly charts? All this 'uncertainty' and price is still trending higher in the NQ, right? Not much of a retracement anyways (as of now)...
 
It is a shame to waste so many time and effort from DB and the rest trying to justify why the focus of this thread is not to provide a crystal ball. I guess some other methods like Gann planet cycles and stuff like that can provide an insigth into the future price of the market at a certain level (good luck with that :p ).

It is my humble opinion that it is IMPOSSIBLE to predict the future, because even in you could do it you would start buying and selling big time affecting it, and your prediction will be off as well. (I guess that is how Emmet Brown would see it).

Now, the focus of the thread is to understand what price is doing and acting accordingly. Following price as it moves in the direction one is expecting and closing the trade if it does not. If that focus is not what you are looking for then you can go somewhere else and get lucky.
 
Quote from BobbiDigital:

Oh, cmon teachers. Surely you can apply the same principles to daily/weekly charts? All this 'uncertainty' and price is still trending higher in the NQ, right? Not much of a retracement anyways (as of now)...
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Yes, you can. And we have, in many posts on the subject. And we've pointed out that the upper limit of the NQ trend channel is around 3450 and the upper limit of the ES trend channel is 1750. But so what? Price may not get there. All that can be said is that price reversed off the lower limit of these respective channels and the path of least resistance is up. For now. Five minutes from now, who can say? The nice thing is that it doesn't make any difference. All one has to do is follow where price leads.
 
Quote from niko:

It is a shame to waste so many time and effort from DB and the rest trying to justify why the focus of this thread is not to provide a crystal ball. I guess some other methods like Gann planet cycles and stuff like that can provide an insigth into the future price of the market at a certain level (good luck with that :p ).
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To some extent, you're right, and I don't waste that much time on it anymore, and I wish others wouldn't even try. It just makes the thread longer, and to no purpose.

However, BobbiDigital has been circling around these concepts for several months now and asking good questions. Whether or not the answers received have been nonsense or not remains to be seen. The market will tell.

Providing one knows and understands the basics, the first sixteen posts provide a template. If one doesn't know or understand the basics, then the post I made earlier (http://www.elitetrader.com/vb/showthread.php?s=&postid=3878127#post3878127) will be of use. Depends on what one wants.
 
Quote from bmwhendrix:

LF

Every PA trade is based on some expectation. No one is going to take the time to take eyes off screen long enough to post a potential trade, that, in my case I may cancel at any time before it gets filled. Think about what you are saying. Why should someone sacrifice their trading just to alert you?
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To be honest, I'm not expecting anything from anyone.

Unless you're scalping a 10 tick chart, a trading style I do not think is in line with what is taught here, it is certainly possible to post an entry in real time without sacrificing your own trading.

Place your trade. Write a post after you got filled and put your stop in. Easy. People do it in the ES journal all day long. What I have often done there is to post my chart in real time with the levels I look at and then what I intend to do if price acts in a certain way or arrives at a certain level.

Easy.

I'm just interested in knowing if this is a methodology that can be used in real time or if it is more suited to tell a story of what price did yesterday.

:)
 
Quote from niko:

It is my humble opinion that it is IMPOSSIBLE to predict the future, because even in you could do it you would start buying and selling big time affecting it, and your prediction will be off as well.
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Yeah, I'm sure your 1 lot will change the micro-structure of the market if you could predict with 100% accuracy. Don't embarass yourself...: )

Copy and paste from Wikipedia:

A prediction (Latin præ-, "before," and dicere, "to say") or forecast is a statement about the way things will happen in the future, often but not always based on experience or knowledge. While there is much overlap between prediction and forecast, a prediction may be a statement that some outcome is expected, while a forecast is more specific, and may cover a range of possible outcomes.
Although guaranteed information about the future is in many cases impossible, prediction is necessary to allow plans to be made about possible developments; Howard H. Stevenson writes that prediction in business "... is at least two things: Important and hard."[1]

Is this not what you do when you enter a long trade? You surely must have an expectation that price will go higher by the time you exit?

And conversely with a short?

I know you guys find great pride in being anticipators, but it's just semantics to be honest.

If you don't have reason to believe (hopefully based on historical testing) that there is a higher probability that price will move in a way that's favourable to you, why enter at all? You might just as well flip a coin.

No one said that predicting involves certainty. There's ALWAYS uncertainty.

Now, I'm sorry if I ask difficult questions and don't stroke everyone's egos, but I can't seem to help myself but being difficult lately.

Best regards.
 
LF

Please refer to my first post on this.

Prediction states something "WILL" happen.

PA trading implies something "may" happen.

Not semantics.

Have a good weekend all!
 
Quote from Trader.Fighter:

Hey DB,

what's your take for next week in NQ, up or down ?

:)
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Up. Unless it goes down. But then it could go sideways. I'll predict it all in hindsight. Maybe next Saturday. :)
 
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