Then you must really appreciate Brooks' books and courses, as he tells you exactly what you should be doing to be highly profitable. I think the reason so many ET-ers dismiss Brooks after perusing "Reading Price Charts Bar By Bar" is because the book "is a comprehensive guide to understanding price action and is directed toward sophisticated traders and market professionals. I didn't realize that on my first reading because I skipped the Preface where he makes this statement. So there I was spending half an hour scratching my head over most of the charts and analyses and moving on to the few I grasped. There were quite a few concepts I could grasp as a beginner in price action study because Brooks also states in the Preface that the book "uses many of the techniques described by Edwards and Magee" and that their "system works, and it always has". That's correct, price action works and on every chart I've ever looked at, regardless of time frame, I see the same price action concepts provide positive expectancy. Brooks also makes a good case for why he, personally, avoids indicators, but he's not derisive toward those who use them. For anyone who has enough trading experience to understand trendlines, channels, support and resistance, and basic breakout patterns, Brooks' education offers comprehensive methods to move to the highest levels. If you don't have time to commit to it, though, it's obviously a waste of your money.
Price action works better in the direction of moving averages , trend lines and price direction , otherwise it is no better than coin toss.
You've just listed two excellent tools for successful price action trading. Of course it works better when you trade the method using tools designed for it.
I don't trade t/a or p/a failures , they are low probability except when they happen counter trend . http://www.elitetrader.com/vb/attachment.php?s=&postid=3665484
This still does not make it easy to implement , the proof is in trading educators not making money by trading p/a due to their own inability to implement it , but pretending to trade and making money by selling courses on it. You see all these pretenders on E T with their two pip stops and 6 pip stops , their inability to understand setting stops probabilities.
There is a very good article about system and education peddlers.Read the ugly truth. http://www.dailystocks.com/turtlerules.pdf So if this price action is so good , why isn't he making money from trading it? If he can't make money from it , why can somebody else?
>> This still doesn't make it easy to implement... How did you come to think that trading would be easy? There are certain inescapable realities in modern life. Jobs that are easy to master are jobs that almost anyone can do. Jobs that are easy to learn require no special skill sets and more importantly do not pay well. Accordingly, the greater the compensation the higher the degree of difficulty. How many professions that compensate in the amount of your expectation (lets say > $100,000), do not require > 4 yrs of advanced education and several years of on the job experience? Not to mention the outlay of several hundreds of thousands of dollars in educational/living expense just to acquire entry level knowledge. Why is trading the one profession on the planet that is the exception? For trading to exist at all, the degree of difficulty has to be such that the majority of those who try it will fail. Why? How many independent traders are there on the planet that net > $100,000/yr ? < 1,000?, < 5,000? < 10,000? In the real world a winning 10 point/30 contract trade is made possible by 100s of neophytes on the wrong side of a 5 tick/1 contract trade. For one trader to succeed many others have to fail. If it were easy to succeed then everyone would do it. If the majority who traded were winners, where is the money coming from? In this life you can have a profession that is easy to master and you can have a profession that compensates you well. You cannot have one profession that is both.
this is actually not true. neophytes do not have any part in liquidity or directional move. only institutions do. and the market wouldnt look or feel or do anything different if small mom and pop day traders dissapeared.
To the extent that institutions are on the other side of every trade of any size at every price and simultaneously filling long and short trades then that would be true. Is it possible that an institution filled the 30 contact buy at the start of the trade and that a 2nd institution took the offer to close the trade. Of course it is. Is it also possible that the two institutions profited in the trade. If the 1st was closing a profitable long in selling the 30 contracts and the 2nd covering a profitable short by helping the trader close his trade then you have a win/win/win situation and over time, how often can that occur and the markets remain in existence. Is it reasonable to assume that in general, institutional trading, along with bots and HFT are net profitable? If so, where are the net gains coming from?. Is it arguable that if 90% of traders fail, then at any given time the majority of those traders are on the wrong side of the market. Of all the traders who were in the market during at various times and directions during the hypothetical 10 point move, were all of them profitable? Isn't it likely that the largest number of traders who lost during a move that may have seen a turnover of 50K contracts were the neophytes with their 1 contract trades? They got long but mismanaged their stop loss placement or attempted to pick the top at every minor resistance level all the way up in the move. My earlier comments may have implied that a direct trading relationship existed between the 30 contract trader and the 100's of neophytes and that was not my intent. But if you regard the institutional, bots, HFT trading as primarily liquidity providers, then does that not suggest that they are directionally neutral. That is how I considered them in my comment. And if this group is net profitable, isn't it reasonable to consider that the gains made by the 30 contract/10 point trader came from the group that is net unprofitable?