OK, let's continue... first hyoothesis that market patterns are a kind of self-fulfillng prophecy received neither enough ositive nor negative confirmation so far. In tries to understand the market I ask myself now: what makes a trade profitable? Obviously enough volume of activity in our direction AFTER we enter. So, to be profitable we must know patterns of behavior leading in certain direction. Now the questin is: can price alone show typical action of big money to relably conclude them accumulating or distributing? Or price is not enough? Then what else? Volume? DOM? Fundamentals?
i found few links in material to video of author, only 1 with right password: public . there is many more vide links but they require other password i don't have
Hey ADK I had to go back a read it Investment Bank makes a whole lot more sense than Interactive Broker Well duh Thank You Sir RN
So other than the other quick page showing the 3 candles does anyone else have info on the author? Now I am interested after coming back to this thread If so, my bad, I must have glossed over it while flipping through the pages on the thread..
I'd like to briefly expand on what ND said about 3 points determining market structure. I try to remove myself from the price bar structure and think in waves (still observed using price bars). OHLC's are nothing more than benchmark points to observe waves. What is the lowest risk trade you can make based on this? When the buying/selling wave (in the opposite direction) is greater than the prior buying/selling wave. Visualize this on a 5 minute chart: Price opens and goes straight up then closes at the 50% point. Next bar opens, if price moves nears the low and bounces back through the open towards the high we expect range, but if that bar were to have stayed above the open and moved towards the high we would expect a measured move trend. I generally like to wait for confirmation so wait for that 2nd bar close before entering. This is how I objectively determine what price is telling me at the level it is trading.
If a PA works, one does not need to risk more than the reward. Now, bad traders will sometimes risk for example 25 ticks to make 5 ticks. So even if their win rate is high, a small mistake will destroy all of their profit. However, as noted in the ES forum, I was able to trade ES futures this week with a 100% win rate using equal risk vs reward. Since if the PA works, then there is no need for a big stop, you already as JH says know where price is going to move and need to risk very little. If you are in the zone, there might actually be just 1% risk, but that is different that statistical trading which I do. I am not at JH's level where I can see how price is moving at all times, so I will wait till I have a better % chance of being right.
TA works just fine, assuming one has the patience and discipline to actually follow some setup rules and risk control vs. reward metrics. My personal experience is that I have changed a lot of charts and indicators over the years to perpetuate my denial about lack of personal discipline. As far as the patterns go, IMO they are simply repetitive expressions of the simple truth about price: If after several attempts to go lower, the price can't seem to go any lower, it is more likely to rise short-term. Conversely, if after several attempts to go higher, the price can't seem to go any higher, it is more likley to fall short-term. These retests happen a lot more around S/R and trendlines, so they self-fullfill patterns as buyers or sellers become more aggressive based on the dominant big trend. ---------------------------------------------------------- My personal statistics are that TA only gives me a 60/40 right vs wrong edge - when I trade with patience and discipline. A 10% entry accuracy edge doesn't seem like much, but as long as I am a few ticks bigger on wins vs losses on average, it is quite enough to profit from (I trade intraday futures, scalps and pivots)