"Everything works sometimes. "
This back to basic, price is random?
The no BS, obfuscation-free price action thread
- Thread starter 1a2b3cppp
- Start date
"Everything works sometimes. "
This back to basic, price is random?
Well I'm trying to figure out if it has predictive value.
One of my questions was why does price sometimes bounce off of certain S/R levels but other times go right through it.
If it's possible to answer that question, part of the answer probably involves figuring out what happens when it does reverse vs. not reversing, and part of the way to do that is to identify the places it does reverse.
So I will continue to annotate those points until I feel it either becomes useless to do so or until I figure out the answer.
As far as price action, in my experience CV bars miss the mark.
For instance you can not determine when activity slows or hastens via visual "pattern". Sure if you are sitting there watching each bar be drawn you might know one bar took 3 seconds and the next bar took 3 minutes, but live-time glancing and hindsight reviewing will be lost. More important, many/most schools of price action consider this aspect very important. And its definitely important for live real time analysis and trading.
For instance each instrument may require different sample size which is merely a factor of sample size: nothing to do with liquidity or trade-ability of the instrument. Using your size of 5000 on say TF you may not have a number of bars to provide actionable material. Yet, TF has plenty of liquidity and is certainly trade-able.
As for Pivots... not a fan, to each their own.
As for Opening range... not a fan. to each their own.
As for previous H/L... no need to display but available for reference only.
If you really want to go down this volume road, the first thing you should do is seek out info on VSA, Volume Spread Analysis... I'm suggesting this as a foundation of knowledge only, a terrific place to start, imo. You might then look at programs like MarketDelta, and familiarize with technical studies like Volume by Price and Market Profile.
Good luck
Trade On!
For instance you can not determine when activity slows or hastens via visual "pattern". Sure if you are sitting there watching each bar be drawn you might know one bar took 3 seconds and the next bar took 3 minutes, but live-time glancing and hindsight reviewing will be lost. More important, many/most schools of price action consider this aspect very important. And its definitely important for live real time analysis and trading.
For instance each instrument may require different sample size which is merely a factor of sample size: nothing to do with liquidity or trade-ability of the instrument. Using your size of 5000 on say TF you may not have a number of bars to provide actionable material. Yet, TF has plenty of liquidity and is certainly trade-able.
As for Pivots... not a fan, to each their own.
As for Opening range... not a fan. to each their own.
As for previous H/L... no need to display but available for reference only.
If you really want to go down this volume road, the first thing you should do is seek out info on VSA, Volume Spread Analysis... I'm suggesting this as a foundation of knowledge only, a terrific place to start, imo. You might then look at programs like MarketDelta, and familiarize with technical studies like Volume by Price and Market Profile.
Good luck
Trade On!
The thing thing that made the biggest difference to me was accepting that I cannot predict price, hence my journal threads. It completely changed the way I looked at everything.
But I'm trying to take another stab at this whole prediction thing and hoping I find another "biggest discovery" in this thread.
I agree with your 3 options above.
There is actually a "bar duration" indicator which does basically what you are saying, so you can look back and see how fast or slow a constant volume bar formed. So it's kind of giving the information you're talking about.
If volume bars end up not working out for me I may change to time bars or another time, but for now I will stick with volume.
I agree. The 5000 volume bars were just for ES. I wouldn't use them for YM, or gold, for example.
I'm still deciding how I feel about those but for now I'm going to leave them on my charts.
I've played around with some of those studies/charting styles before. It might be something to take a look at again in the future.
First you identify potential areas of support and resistance obtained from the years of research you applied studying past price action; which is what I gather what this thread is about, the finding of those areas, the search for areas with a higher probability of reaction.
My suggestion, you will discover these areas much faster, studying slower charts rather than faster charts, as the faster ones have more noise but less substance, and the slower ones more substance and less noise.
Now, the second stage, which is equally important and rarely recognized or discovered is the bar by bar analysis of price around these areas, price actually confirming to you, that you have indeed a key area of support and resistance.
Price agreeing with your area selection, which finally tells us, it is now ok to risk our hard earned capital instead of just giving in to hope.
My suggestion, you will discover these areas much faster, studying slower charts rather than faster charts, as the faster ones have more noise but less substance, and the slower ones more substance and less noise.
Now, the second stage, which is equally important and rarely recognized or discovered is the bar by bar analysis of price around these areas, price actually confirming to you, that you have indeed a key area of support and resistance.
Price agreeing with your area selection, which finally tells us, it is now ok to risk our hard earned capital instead of just giving in to hope.
The outcome of every single trade should be seen as random, but a large set of trades taken using the same rules can have a positive (or negative) expectancy.
What I have found in my research though, is that any signal taken systematically has a net negative expectancy after comms & slippage. So the key is to define in which context a signal can be followed, or faded, or ignored, to get to a net positive expectancy.