Trade on nothing but price action

Hello:
I read Livermore's story a long while ago. Later I read a second text that elaborated on his life. Frankly I found the man (and his family) to be rather tragic figures. I would not want to emulate him. Ultimately he was a failure personally and professionally.

As far as the issue of trading without indicators, I think a skilled trader could do that as long as he or she knew their levels. In my opinion, indicators (all of them) provide a psychological crutch of sorts, making it easier for the trader to pull the trigger. This is why traders use pivots for instance and execute trades by "leaning" on them (just one example).

Lefty.
 
Quote from LivermoreRisen:

don't use news, don't use fundamentals, nothing but your charts, no politics, no economic numbers. Just price action

anyone do this successfully?
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LivermoreRisen;

Lot of truth in that, however he would not ignore trader personalities;
remember Livermore expressed a respect for good traders who he observed had better saving habits than himself.

Too bad he wasnt taught/ learned gun safety principles.

However he also observed, certainly by newspapers for sure;
market reaction to news.:cool:
 
Quote from Baruch:

No, you are wrong. Livermore started that way, but his losses taught him to trade the fundamentals.
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Livermore failed not price action failed. With your logic, fundamentals is crab as all the mainstream media using fundamentals and 90% are lossers.
 
Quote from Lefty62151:

Hello:
I read Livermore's story a long while ago. Later I read a second text that elaborated on his life. Frankly I found the man (and his family) to be rather tragic figures. I would not want to emulate him. Ultimately he was a failure personally and professionally.

As far as the issue of trading without indicators, I think a skilled trader could do that as long as he or she knew their levels. In my opinion, indicators (all of them) provide a psychological crutch of sorts, making it easier for the trader to pull the trigger. This is why traders use pivots for instance and execute trades by "leaning" on them (just one example).

Lefty.
More...

I just use macd for confirmations. To me indicators are like training wheels. Doesn't hurt :p
 
Hey Andy:

I'm all done for the day, so I thought I would check in here before I turn in to get some sleep. I use MACD as well. In fact, I use whatever I can find, including volume, ticks, etc. I have no problem with use of indicators. Good luck everyone.
Lefty
 
Quote from Lefty62151:

Hey Andy:

I'm all done for the day, so I thought I would check in here before I turn in to get some sleep. I use MACD as well. In fact, I use whatever I can find, including volume, ticks, etc. I have no problem with use of indicators. Good luck everyone.
Lefty
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I don't find anything wrong with indicators either. They're just tools to me. But if you don't know how to use them properly these tools are worthless. have a good sleep

Andy
 
I've done this. There are pros and cons. On the plus side, I've got some good trade signals just from looking at price action, and I find they are generally better signals than ones I've got from indicators (far fewer false signals). On the downside, indicators can help give a more objective interpretation of the market, which can help dissuade you from hesitating. For example, an MA crossover is an objective signal, whereas a judgement of "hmm, this market looks like it might be breaking out" is much more open to uncertainty and hence confusion & indecisiveness. Just watching price action can make it difficult to time entries and exits. Then again, you could say that this is a psychological problem, and that the precision of timing offered by indicators is an illusion and false comfort. If entry and exit are imprecise by nature, then you should accept this and trade accordingly, not try to hide it by using indicators.

There are a couple of major issues with price action. One is that looking at a chart showing previous price action simply cannot be compared with having watched that price action as it occured. I get a much better "feel" by watching price each day, than I do by just looking at a chart at the end of the day. However, if you cannot or did not watch the price action as it happened, I find that indicators can give a reasonable approximation of what has gone on. If I was looking at a stock that was in the news, which I didn't normally follow, I would definitely bring up indicators to get some kind of feel for the action. The second issue is that just watching price action gives you a much purer and less cluttered vision of what is going on in the market right now. Having a chart with 2 MAs and Bollinger Bands on makes it incredibly easy to focus more on the indicators than the price. For this reason, even when I use indicators, I always have a chart with no indicators on, and follow that first in realtime before I look at the 2nd chart with indicators.

Overall, I'm still not really sure whether I ought to use indicators or not. Currently I focus first on price, and use indicators as a backup and confirmation. So I would say try the various options. Use indicators alone for a while, then use price action alone, then use both together, and see which works best and performs best in back or forward testing.
 
Quote from Lefty62151:

Hello:
I read Livermore's story a long while ago. Later I read a second text that elaborated on his life. Frankly I found the man (and his family) to be rather tragic figures. I would not want to emulate him. Ultimately he was a failure personally and professionally.

As far as the issue of trading without indicators, I think a skilled trader could do that as long as he or she knew their levels. In my opinion, indicators (all of them) provide a psychological crutch of sorts, making it easier for the trader to pull the trigger. This is why traders use pivots for instance and execute trades by "leaning" on them (just one example).

Lefty.
More...

Livermore certainly did have a sad life, at least in the final years before he took it. As for his trading, from what I've heard he was extremely successful until the downward spiral of family and other problems started. The family problems took a toll on his trading/judgement, though, and he was a huge spender (he had a yacht; mansion; full-time maids, cooks, etc. who worked at his mansion, etc.) so I don't think he left much money behind.

I believe his trading success is more widely accepted than that of other gurus, like Gann, however. One of Gann's sons said he really was a great trader while the other son said he made all his money from selling courses and books...And Gann was another huge spender who didn't leave much behind, so we'll probably never know...Maybe there's a lesson here about using your trading to achieve a comfortable/balanced/simple life rather than trying to be a gazillionaire celebrity, but that's fodder for another thread.

As for trading methodologies, I strongly prefer Livermore's focus on price action over Gann's esoteric stuff/angles/insistence that time is as important as price/etc. though I'm not a disciple of either.
 
Quote from LivermoreRisen:

Other than the greatest trader of all time, that is, Jesse Livermore
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Actually that is only how he started.

You should perhaps know a bit more about him than you do if you wish to use his name?
 
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