I am currently in the process of trying to master price action to trade profitably. Forget all the holy grail indicators, they don't work. Just trend lines, drawings, fibs, etc. Where can I learn more about what I should look for and practice?
Where/how can I master price action to trade it profitably?
- Thread starter AvestroTrades
- Start date
You need to code and test your ideas or spend 10 years mastering it. No easy way.
Indicators work if used properly.
You learn by doing. Select one or two instruments with decent volatility, and spend a few thousand hours (not kidding) watching their charts in both 5 minute and daily time frames.
Understand why they move, when, and how.
Once you think you have a good feel for them, place your bets and start small.
I believe more into eye to hand of drawing charts day by day, even after I got first PC in 1986, I continued to draw my own charts for another 12 years.
Bulkowski is best on charting
http://thepatternsite.com/chartpatterns.html
Indicators work if you understand the relationships to price, but if you seeking Holy Grail, you never find it. If you don't know how to draw trendlines, they are useless as well.
Bulkowski is best on charting
http://thepatternsite.com/chartpatterns.html
Indicators work if you understand the relationships to price, but if you seeking Holy Grail, you never find it. If you don't know how to draw trendlines, they are useless as well.
Use multiple timeframes, 3 is good. To start, focus on identifying trends and observe how the visible trending action on a larger TF is built by the PA on a smaller one. Notice that trend pullbacks on a larger TF at some point create a reversal on a smaller one, which is where textbook TA concepts and patterns (trendline break, double bottom/top, 123, LH/HL, head and shoulders, asc/desc triangle etc) come into play.
Over time (a lot of time) you'll get good at seeing "when the market is done trying to go one way and needs to try the other way", and when "the other way" is the direction of a prior larger-TF trend (or possible new trend if you think the larger TF may have reversed) then you are good to go.
If you are just starting out my advice is to work backwards. Don't memorize patterns or setups from a book and focus on finding them, instead focus on the places on the chart where the direction changed and pullbacks/retraces that offered good entries until the next direction change. Over time you will see how these places relate to setups/patterns/concepts described in books or elsewhere, but if you focus on "setups" you'll miss developing the feel for context and subliminal cues that are critical to a discretionary trader's edge.
Good luck.
%% IBD [Investors Business Daily/weekly] helped me more.
I still draw my trend lines by hand ; but a 50 + 200 week moving average helps me much more than the trend lines i draw by hand.
Remember rule of 72; work 6 days times 12 hours a day+ do that 7.2 years or 50 years.IF Rich Dennis showed you strong trending market, in the next 2 weeks,+hired you, or fired you for breaking battle tested rules- you could do it in QQQ trend . But he, most likely,would never do that in leveraged stuff, again.So figure on mastery taking 7 years or 50 years, even if you make a profit, nest 2 weeks, A trades..............................................................
Or you can read through this thread to get a sense of what is obvious. I read through every posts and still cannot figure out what is obvious but do get a feel of why price action might work:
https://www.elitetrader.com/et/threads/why-is-the-obvious-not-so-obvious.151802/
Like lindq said, I stared at 1 min, 5 min, daily and monthly charts for hours everyday to get a feel of how things might develop. Still after hundreds of hours, it is still hit or miss.
Hello lindq,
This is really great advice. I don't believe there is any other way, especially this part "Once you think you have a good feel for them, place your bets and start small."
Like lindq said, I stared at 1 min, 5 min, daily and monthly charts for hours everyday to get a feel of how things might develop. Still after hundreds of hours, it is still hit or miss.
You are absolutely correct, hit or miss guessing even if you are in trend as NO ONE has crystal ball. But we all need a starting point, we can only control for most part is risk which covers a great deal, how to get to breakeven stop so it becomes a risk free trade with exception of holding over night and gapping.