Al Brooks - Trading Price Action Trends

Discussion in 'Educational Resources' started by mark_mm, Jan 2, 2012.

  1. wrbtrader

    wrbtrader

    Yep...

    To a price action trader, price action is primary and indicators is secondary for those that may have them on their charts. In contrast, to an indicator trader, indicator is primary and price action is secondary.
     
    #281     Jan 20, 2012
  2. cornix

    cornix

    It also tends to become kind of a bad habit and puts those negative people in the pathological circle of negativity so they have less and less chances of becoming happy as situation develops.
     
    #282     Jan 21, 2012
  3. Cynics will always become more cynical , they have seen the few snake oil salesmen generating huge revenues from p/a training education with very little benefit for noobs.In fact they taught the noobs the wrong things to look at.
     
    #283     Jan 22, 2012
  4. cornix

    cornix

    What is the criterion of "wrong" thing to look at in trading?
     
    #284     Jan 22, 2012
  5. Some of these mentors teach their losing breakout systems , static trading systems which have no earnings often for for years ,gambler's logic , renamed-rehashed price action into more confusing thing, teaching noobs into trading bar by bar unfiltered noise .
     
    #285     Jan 22, 2012
  6. cornix

    cornix

    Breakouts can be very profitable. Honestly I can say I even prefer good breakout to a reversal signal.
     
    #286     Jan 22, 2012
  7. cornix

    cornix

    #287     Jan 23, 2012
  8. BCE

    BCE

    Not sure if your line was meant to be humorous. :) But was just making an observation, not being critical. :)
     
    #288     Jan 23, 2012
  9. cornix

    cornix

    #289     Jan 23, 2012
  10. SteveH

    SteveH

    While I don't trade the Euro Dollar futures (Globex 6E contract), I hand-checked what stop I would need to trade it intraday on a mid-level volume chart (350-400 contracts per price bar) with a nice volatility study. I found all of the winning trades, recorded the MAE (Maximum Adverse Excursion...aka the drawdown) and the MFE (Maximum Favorable Excursion...minus 1 pip)

    Sure enough, it matches what cornixforex is saying. A 6 pip stop would have kept me in 95% of the winning trades.

    That same study on the CL, which I do trade, requires a 10 tick stop to capture 94% of the winners. The average winner on the 6E was 18 pips ($225) and 29 ticks ($290) on the CL. About the same on a ratio basis. 50% of the 6E winners are 12+ pips while 61% of the CL winners are 20+ ticks. No great surprise. The CL is more volatile and is a better reward for the risk on a per contract basis.

    Here's the bigger picture. EVERY winner has a measurable MFE / MAE. Focus on THAT when you're researching your possible edges. You know what all the winners are paying out and what you had to risk to capture a significant pct of them.

    Look. We all know that the hard part is finding a way for the losers to not overcome the winners on a monetary basis (duh!). But from reading trading forums, I get the impression that the majority of trader hopefuls cannot even tell you something similar to the above. The MAE stat will stand out in your research and tell you what your best stop area is to catch 90-95% of the winning trades. For example, On the CL, everything which works out well for me on a 5 min chart and below over 100's of trades doesn't need more than 10-15 ticks [heck, 65% of the winners in the study above only need a 6 tick stop!]. Any more and my risk of throwing money away needlessly goes up because the few big winners I may get from a bigger stop is going to get eaten up by the losers on the average trade which never needed that much of a stop to begin with.

    Summary to newbies: Your winners tell you how much to lose on the losers.
     
    #290     Jan 23, 2012