The Price Action Journal 2

[Slope Trader]

Brooks and Volman are okay. Murphy, Pring and Schwager are not okay.

Even with Brooks and Volman, they try too hard to make PA sound more complicated than it actually is, as if it were some voodoo magic that only the initiates can understand.

PA is and should be very simple IMO. It boils down to pattern recognition. All you need are lines: horizontal and diagonal. Other than that, you need only look at a few sample of patterns like 3 bar reversal (higher high/lower low), hammer or inverted hammer, etc.

Lastly, somewhat off topic, but you really need to understand these two important trading concepts. Without it, even PA is useless.

• You don't need to beat the market. You just need to stay ahead of the guy who is dumber than you. This might sound trite on the surface, but take your time and let that sink in for a moment.
• Market doesn't care whether you make money or not on a daily basis. But it will make damn sure that you go broke in the end. How will they do this? They do this by setting up TRAPS. Learn to recognize these traps.

Schizo, thanks for sharing your views on this.

Do you remember all those threads we had here several years ago that had titles containing the phrase "If you can draw a straight line"? (some are pasted below; not sure if it's all of them).

I remember that some past PA traders and frequent posters like Redneck and NoDoji participated in the discussions, which suggests there was some meat there, but I haven't really taken the time to read through them. Are you familiar with them and if so do you think there are similarities to the support and resistance lines that you are recommending... is there value there for learning PA...

 

[schizo]

Do you remember all those threads we had here several years ago that had titles containing the phrase "If you can draw a straight line"? (some are pasted below; not sure if it's all of them).

That thread was created by @dbphoenix, and if I'm not mistaken, he's a disciple of Jack Hershey. Sorry but I steer clear from anything Jack says like a disease.

I remember that some past PA traders and frequent posters like Redneck and NoDoji participated in the discussions, which suggests there was some meat there, but I haven't really taken the time to read through them. Are you familiar with them and if so do you think there are similarities to the support and resistance lines that you are recommending... is there value there for learning PA...

I know who Redneck and NoDoji are. But I don't recall any of their strategies other than the fact that NoDoji promoted Al Brooks on more than one occasion. As far as PA is concerned, I'm sure our methods overlap in many ways than one. I mean there are only so many ways to draw a line. It all comes down to individual's interpretation of those lines.

If you have any specific questions regarding PA, feel free to shoot my way.

 

[schizo]

Now that you've brought up the memory of Jack Hershey's trading method, I'm really not sure where to formally categorize his method, even though with all its convoluted lines it could (technically) be lumped into PA proper. One thing's for sure though. You want your chart to be as clean as possible. I would never be able to trade with a chart like this.

 

[Slope Trader]

Now that you've brought up the memory of Jack Hershey's trading method, I'm really not sure where to formally categorize his method, even though with all its convoluted lines it could (technically) be lumped into PA proper. One thing's for sure though. You want your chart to be as clean as possible. I would never be able to trade with a chart like this.

Same... I tried several times to get useful info from Hershey's posts but never could do so.

Regarding the "If you can draw a straight line" threads, I don't think they were based on Hershey's stuff but instead were drawn from what they called "auction market theory".

Apparently dbphoenix talked about it on other trading forums and even wrote a book about it:

https://elitetrader.com/et/threads/dbphoenix-posts-journals.299468/

 

[tiddlywinks]

Do you remember all those threads we had here several years ago that had titles containing the phrase "If you can draw a straight line"?

DBPhoenix produced the attached PDF to outline his method.
Note: There is no author listed in the pdf. Another ETer stated to me credit goes to DBPhonix.

DBPhoenix stuff is rooted in Wykoff, not Hershey. There are some similarities as Wykoff and Hershey are rooted in volume.

 

[tiddlywinks]

Now that you've brought up the memory of Jack Hershey's trading method, I'm really not sure where to formally categorize his method, even though with all its convoluted lines it could (technically) be lumped into PA proper. One thing's for sure though. You want your chart to be as clean as possible. I would never be able to trade with a chart like this.

What you are looking at is the parallel channel component/methodology of Hershey. It's only one method, and can produce profitable results by itself.

I am a Hershey disciple. Use it every trading day.
One thing for sure... in real-time, you do remain engaged with the market and the chart!!

 

[Sekiyo]

Now that you've brought up the memory of Jack Hershey's trading method, I'm really not sure where to formally categorize his method, even though with all its convoluted lines it could (technically) be lumped into PA proper. One thing's for sure though. You want your chart to be as clean as possible. I would never be able to trade with a chart like this.

This reminds me Oliver Kell charts,
This guy won the 2020 US Championship (+941%).

https://twitter.com/x/status/1578370817226047489

The best books to study PA are chart themselves.

PA isn’t a setup
We don’t trade Price Action,
We trade a positive expectation.
Not every action is worth reacting.

A good chart will forgive even the worst readers.
A bad chart will punish even the best readers.

If all you look at are naked charts,
Obviously, after decades, you’re going to find patterns.

Drives me Schizo. Done burnouts.
So many way to read a single chart.
All with their own costs and benefits.

Personally I use mostly horizontal lines,
Highs, lows and close. Faster and slower signals.

Agree.
Prediction isn’t necessary nor sufficient.
I am pretty sure it’s way more profitable,
To be dumb and follow price with the trend.

I’ve found that even volume is BS
Everything is already priced in.

Volume correlates with the True Range.
I’d rather have a nice Daily ROC than volume.

Plus volume doesn’t take liquidity into account.
I’d rather measure activity ADR wise.

Thank you for sharing @schizo

 

[schizo]

This reminds me Oliver Kell charts,
This guy won the 2020 US Championship (+941%).

Well, he must be one of Jack Hershey's acolytes. But if he made +941%, he obviously knows what he's doing.

Anyway, thx for your insight.

 

[schizo]

Same... I tried several times to get useful info from Hershey's posts but never could do so.

Regarding the "If you can draw a straight line" threads, I don't think they were based on Hershey's stuff but instead were drawn from what they called "auction market theory".

Apparently dbphoenix talked about it on other trading forums and even wrote a book about it:

https://elitetrader.com/et/threads/dbphoenix-posts-journals.299468/

I went over a few pages on that thread, but all the images he posted were deleted so it was quite hard to follow. I'll check out the other thread. Thx.

 

[schizo]

DBPhoenix produced the attached PDF to outline his method.
Note: There is no author listed in the pdf. Another ETer stated to me credit goes to DBPhonix.

DBPhoenix stuff is rooted in Wykoff, not Hershey. There are some similarities as Wykoff and Hershey are rooted in volume.

I do remember DBPhoenix and Spidey as the main proponents of Hershey's method. Believe it or not, I too tried to digest Hershey's teaching at one point, which turned out to be an exercise in futility. Trading, in my view, should not be so convoluted. But if you're able to pull it off and profit by it, kudos to ya.