Trading with price action

I recently got an e-mail from someone who looks at S&R levels. He looks at the pivot points, todays high and low, yesterdays high, low, and close, and the weeks high and low. in addition to this he looks at cci, volume, moving averages, linear regression, and a few others. I kid you not.

Phil
www.sp-levels.com
 
Quote from bone:

DB:

Better yet, which one do you think is more effective?
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If by "effective" you mean "profitable", it's nearly impossible to say. It's easy to backtest indicator-based strategies because they can be put in language that a computer can understand. And on the basis of those results, some of these strategies do well. The problem is that the practitioners rarely (never?) practice the system as is. Or they lie about their results. Or both.

On the other hand, there are as many opportunities for second-guessing using indicator-based strategies as there are "SOMP" strategies since the trader can be so far removed from the price action. He may, of course, trade solely by what the indicators are telling him, even to the extent of eliminating the price plot entirely, but I wonder how many people can do that?

Reading the "stochastic" thread, for example, it does seem as though there are a number of people who are near desperate for some sort of recipe that they can follow, but that's always been the case to at least some extent. I doubt that that's the prescription for long-term success, but who knows?

==Db
 
shorter ma's whipsaw more than longer ones;
shorter time intervals whipsaw more than longer ones;
shorter ma's on shorter time intervals really whipsaw more than longer ma's on longer time intervals.

I like longer ma's,
longer intervals too.
I like trading long term,
And takin' my kids to the zoo!

Okay seriously, I use the 40sma on daily and weekly charts. It works just fine, by that I mean routinely puts you in nice profit positions, on shorter time intervals. But I prefer the daily and the weekly and aye yi yi I am looking at the monthly right now!!!!!

You put these daily and weekly charts on line setting and look for candidates that are still in the 40-80 dollar range and you will not see any 4-5 time whipsaws. I mean stox like mrk, ibm, pg.

Now with the 5 minute chart on the ES or the 2 min chart on the ES, there will be a lot more trading. There will be smaller profits per trade. More commissions. More chances for error.
 
Quote from dbphoenix:



I can't help but wonder what's more difficult: understanding demand and supply and applying that understanding to a chart, or applying three sets of stochastics and two sets of MACD and several MAs and Bollinger Bands and so forth and trying to make a decision based on all these lines?

--Db
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Using a minimum of focused indicators and price and volume seems to work best in the context having sequence lists of indicator, price and volume signals.

It is like a tree where the sequence is continually advancing and at branch points you eliminate the alternatives that could be coming up. Finally, It appears that a set of end effects are in play.

Obviously, there is stops for protection but stops are not in an exit strategy that is optimizing capital appreciation.

Vis a vis entries, Market tools replace sequences as a risk minimization strategy. Before market tools become useful, it is best to use a minimum of forced indicators and a very limited set of rules which primarily keep you out of the market.
 
You really ought to reconsider your little slogan. "You must be in to win" shows serious naivete about how the market works. On the contrary, you must be willing so sit and watch at various times, or you will surely wind up on the road to trading perdition.
comprende amigo? :cool:
 
Quote from doctoroe:

You really ought to reconsider your little slogan. "You must be in to win" shows serious naivete about how the market works.
comprende amigo? :cool:
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Day trader doc, interesting you're giving advice to inandlong, I believe he only made a few hundred percent last year. I wish we we're all as naive as him.

Quote from inandlong:

I made just under 130K last year with a 50K acct. That was higher than usual because of two big winners I had last summer. Usually I'm in the 80-100K range. Decent but not stellar. Three weeks ago I decided to up the ante to 200K. Now I am just looking for a 50% annual gain instead of 150% or better.

Unfortunately I put it all on AMR at 3. It is 1.58 now. But it will be back, I'm sure of it. I'm still holding MSFT at 98, CSCO at 80, and SUNW at 75. I figure a couple of good quarters and those stocks will pop right back up and I can get out. Right?
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Quote from links:



Day trader doc, interesting you're giving advice to inandlong, I believe he only made a few hundred percent last year. I wish we we're all as naive as him.
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Lots of claims are made. Few if any are supported.

--Db
 
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