The key here is

**probability **. PA trading makes sense if you can get a prior estimate of probability. Then it turns into a very powerful method but not easy to execute because it involves quant analysis.

One of the PA gurus is undoubtedly Michael Harris. You will find many examples in his blog of PA analysis and very interesting and counter-intuitive results. For example before the open last Tuesday he posted a blog about a pattern in SPY, an inside day breakout and analysis that showed that historically the underline PA had a bullish bias based on two samples of 60 and 98 trades.

Here is the link.

It is interesting that the market gapped down on Tuesday at the open and since then SPY had a 3-day winning streak for a gain of $2.20 per share.

This is a style of PA analysis that I like. There are other styles based on s&r, pivots, etc. but in those cases it is hard to estimate prior probability. Of course in the case of Harris his program helps a lot but it's too expensive for most.