where can i learn PRICE ACTION trading ?

[Tradex]

I'll trade you 100 hours of screen time for 1 hour of backtesting.

Yes, but you need both: The screen time will give you the trading ideas, the computer backtest will test those trading ideas on 20 or 30 years of historical data, on many different markets/timeframes, at warp speed, saving you months and months (if not years) of tedious and mind numbing manual testing.

 

[Tradex]

Do you think in days of old backtesting could replicate a pit trader's performance?

The pit traders from the old era are probably living on welfare now, at least those who did not adapt quickly.

 

[Spooz Top 2]

Back in the day the great traders drew their own charts. They traded off the tape.

Gomez always knew when the tape felt heavy heavy.....

 

[SimpleMeLike]

Yes, but you need both: The screen time will give you the trading ideas, the computer backtest will test those trading ideas on 20 or 30 years of historical data, on many different markets/timeframes, at warp speed, saving you months and months (if not years) of tedious and mind numbing manual testing.

Tradex,

And how does a trader acquire skills to program trading ideas after view hours and hours of screen time with Only price action? No indicators, just candles.

I do not believe there is a way to program price action and then back test with a computer. Sounds like alot of work. Better to watch the charts

 

[SimpleMeLike]

There's no substitute for "seat time" watching volatile charts go up and down for years. You eventually learn timing and pattern recognition skills.

I agree KCalhoun. Scalping helps too.

 

[Tradex]

And how does a trader acquire skills to program trading ideas

To test his trading ideas the trader must learn a computer programming language like C++ or Python, or learn how to use backtest software like TradeStation, there is no way around this.

I do not believe there is a way to program price action and then back test with a computer

Of course there is, you can program and backtest tons of price action systems, even though some subjective trading strategies, like the ones that use breakout of a trendline for instance, are indeed more difficult to program.

 

[SimpleMeLike]

To test his trading ideas the trader must learn a computer programming language like C++ or Python, or learn how to use backtest software like TradeStation, there is no way around this. Learning to program and then test what? Here is chart of Crude Oil today.

What is there to program and test on this chart for the past 20 years?


Of course there is, you can program and backtest tons of price action systems, even though some subjective trading strategies, like the ones that use breakout of a trendline for instance, are indeed more difficult to program.

There is a chart below, please show me some strategy to test. Write it in IF and THEN statements or whatever simple language so i clearly understand. Use entry, exit, or trade management too.

Using this chart, tell me a trading strategy using price action to program and test.

Also, please let me know if you need more charts so you can tell me some strategies to back test via price action only, (no indicators). Just show about 3 strategies to get the brain to thinking.

Thanks,

Thanks for response.

See responses in red

 

[Tradex]

Thanks for response.

See responses in red

View attachment 239775

Well, on your chart we could test the following price action strategy : can I make money shorting the market after 2 lower highs and 2 lower lows (with a stop located at the previous swing low), and vice versa for long positions?

On your chart the answer is YES, we could have made tons of money (depending on the size of your position), with a short position around $41.15!

This is just a simple example.

You could add more what-if scenarios, for instance : "can I make money shorting the market after 2 lower highs and 2 lower lows when the trendline is also down, or when we also have 2 lower highs and 2 lower lows on a higher time frame ?"

Trading does not have to be complicated, we can create a lot of profitable trading strategies with very simple price-action-only trading rules, and then backtest these systems, automatically or manually.

 

[Poljot]

Well, on your chart we could test the following price action strategy : can I make money shorting the market after 2 lower highs and 2 lower lows (with a stop located at the previous swing low), and vice versa for long positions?

On your chart the answer is YES, we could have made tons of money (depending on the size of your position), with a short position around $41.15!

This is just a simple example.

You could add more what-if scenarios, for instance : "can I make money shorting the market after 2 lower highs and 2 lower lows when the trendline is also down, or when we also have 2 lower highs and 2 lower lows on a higher time frame ?"

Trading does not have to be complicated, we can create a lot of profitable trading strategies with very simple price-action-only trading rules, and then backtest these systems, automatically or manually.

Hi Tradex

When back-testing, do you compare results with a stop and without one?
Have you tried automating a rule similar to this ?
...and place a stop order below the last swing low or above the last swing high.
I am wondering if % is better then fixed distance/pips to avoid stop hunting.

 

[SimpleMeLike]

Well, on your chart we could test the following price action strategy : can I make money shorting the market after 2 lower highs and 2 lower lows (with a stop located at the previous swing low), and vice versa for long positions?

On your chart the answer is YES, we could have made tons of money (depending on the size of your position), with a short position around $41.15!

This is just a simple example.

You could add more what-if scenarios, for instance : "can I make money shorting the market after 2 lower highs and 2 lower lows when the trendline is also down, or when we also have 2 lower highs and 2 lower lows on a higher time frame ?"

Trading does not have to be complicated, we can create a lot of profitable trading strategies with very simple price-action-only trading rules, and then backtest these systems, automatically or manually.

Yes, I went short today at $41.15 and exit for $200. and went short later on for another $120

Thanks for the example.

Good conversation.

Think about it. If it was that easy to just program a trading idea and make money, then EVERYBODY would be rich.

You think Goldman Sach have not tested every trading idea there is. They hiring the best programmers on earth to back test at a rate 1000 times more faster than me or the average person.

hmmmmmm, i am not buying man. Sounds like bullshit this programming stuff. There is no way I can program or test better than institutions. Waste of time of trying to compete against Algos much smarter than me.

I actually tried programming trading strategies in Ninja trader about 2 years ago. I spent about 1 year doing it. Too much work and learning and found nothing that made money over the past 10 years year after year. Also, sometimes the strategy makes money and sometimes it does not. Just seems like too much work and very easy to click optimization. But I was using indicators, not just price action. I just do not believe in automation, if it was that easy we all be millionaires by now. Also, noone to learn from either. So spend all that time and no results to show for it.

All the time spending programming and clicking back testing or optimization takes away from actually screen time and study and actual trading.

I learn far more watching the charts and actually trading then programming strategies and back testing. Waste of time. Best to understand what the market is doing day to day, minute to minute