Trading is easy
- Thread starter dozu888
- Start date
All trading is based on hindsight, whether charts or the ladder, unless one is trading without looking at anything at all, e.g., buying or selling based solely on fundamentals. Even if one is scalping, he is at least aware of the last trade. As to what's going to happen next, nobody knows. A successful trader has to learn how to trade in an environment of uncertainty. But that uncertainty can be turned to one's advantage if he understands why price is moving as it is, and who is most likely causing that movement. All of this can be done without regard to methodology, as the OP did in his first post. Knowing what should be done about what it is that the trader is looking at is the next step, but he isn't going to know what to do if he doesn't understand how price got where it is.
I posted some resources having to do with this subject here. Yes, the resources are "old" (or one can view them as "classic"). But they address the subject of analyzing price movement without regard to method, and there isn't a single "price action" guru who is able to do this without pushing a method, usually at considerable cost (and, often, confusion). Note that while the OP uses colors, there are no indicators, no patterns, just price movement -- with the accompanying volume -- with a series of hypotheses regarding why price is doing what it's doing, or rather why it's being made to do what it's doing (by important money). Without this understanding, the trader will most likely spend a great deal of time lost. And most likely he won't recognize his trading opportunity when it comes.
"Easy" is perhaps not the right word. But "simple"? Yes.
In another thread people were talking about Al Brooks and I made a comment there that the Brooks stuff can be frustrating intraday, as all you have is the price... but you see here, by applying the same principles, but with the aid of the news stories - trade wars, inflation, what not, and back in 2015 and 2016 we had China slow down and the oil collapse.... plus the timing with the earning cycles, plus the retail sentiment (retail long/short ratio), plus some additional stuff like VIX and AAII sentiment... these things added together can paint a picture with better clarity..... to me at least.
no... not that..read my original post again, slowly
the question is - who is pushing this news? why? and if the news is bogus? why the bogus news? how credible is the next news story? what is the bigger plan behind pushing the bogus news stories?
so, applying this to the volatility since Feb, I have this type of interpretation:
The retail sentiment turned neutral in Jan, (from bearish in most of 2017), so a shake down is due, we just didn't know exactly when.... as it turned out it happened in Feb, violent sell down... but it was worth a bottom fishing near the 2/9 low as a rebound was high probability.... then the 3/12 high negated the inflation story... further evidence that it's just a shake down, instead of the start of a bear market.. then the next news theme came (the trade war), at that point you'd have more confidence to put a 'bogus' label on it as the inflation story was bogus... therefore a 2nd bottom pick around end of March/early April should be safe... also timing wise the earning run was about to start. Then we had the dry up days in May... and once the June breaks out happened and negated the 'trade war' story, now these guys have been caught with hands in the cookie jar twice in a row, so what is the true intent? could it be the price target is much higher???
This is the poker type of thinking I was talking about.
Most people just have too short attention span. Now they have all forgotten how they were fooled by the inflation story and the trade war story. And I will give you 1 more - the AAPL rumor of iphone sales down... then what happened after the earning came out?
So again, applying the price action principles on the daily chart is easier as these news stories are like bluffings/tells in poker that provide many clues.
I'll stick with price action. When I look at a chart of price and volume it shows not only every bit of information available but also how the market interprets it. I don't need to know why the market is moving I only need to know that it is moving.
You can certainly win with online poker, looking at cards and bets only.
What I have here is sitting at the table, looking at extra stuff - is the guy getting chatty? or is he getting quiet? are his eyes getting shifty? are his hands shaking?