Every trading day is different. One day your profits or losses may be due to money management. The next day, your results may be due to discipline. The following trading day your results may be due to your trade signal. The day after that, your results may be due to position size management and the day after that your results may be due to luck, the day after that your results may be due to your ISP connection when other ISP are having connection problems and another day your results may be due a global economic event and the day after that your results may be due to any combo of variables just mentioned and others not mentioned. My point is that for discretionary traders (those not using automation trading)...profits and losses are dependent upon many variables. Therefore, if a price action trader or trader using indicators were to have consistent profits or consistent losses...its primarily due to how the trader manages (exploits) those team of variables...dependent upon the skills of the trader in managing those variables. Thus, there's a lot more to profitable trading than just trade signals which is something most newbie traders don't understand. Its just pointless to see so many traders say all I need is discipline or all I need is money management or all I need is volatility or all I need is good fundamentals when in reality there's other important variables in one's trading regardless if we talk about them or not talk about them. So yeah, one day a profitable price action trader's profits may be due to money management and intuition while other days it may have absolutely nothing to due with either and is completely dependent upon the trade method or some other combination or variables. Anyone that says I use one thing only or something is the only edge needed and nothing else...that person will have a very short trading career. I'm just not a fan of one hat fits all trading days.
This is actually not correct. It's always about the money/risk management (cutting losses short and letting winners run with proper position size). --Always--
Are you in the Van Tharp camp that says you can be profitable with random entries...as long as you manage your trades and money correctly?
I don't know that I am in someone' camp--but yes certainly prudent risk management with random entries is profitable.
Here's what typically happens when you objectively test a "pure price action" pattern: http://www.priceactionlab.com/Blog/2015/07/double-inside-day/ And I realize the irony...the blog is called "priceactionlab.com." However, it has nothing to do with the stuff DB, et. al. do--except to debunk it. To quote from the article: "Therefore, this double inside day is a random pattern with no clear directions bias as it should because it is formed during times of uncertainty. As trade samples increase, it will become even clearer that such patterns have no predictive capacity but in fact are random. This is true with nearly 95% of all patterns. Especially classical patterns, such as head and shoulders, wedges and triangles, have zero predictive capacity regardless of whether or not they are confirmed."
I would venture 100% of all price patterns on a intraday basis are nonsense. Add in the fact that patterns can ONLY exists in the past adds another layer of ridiculousness to the idea.
An edge (positive expectancy) can be derived through study of patterns. For example, if one were to buy or sell "yesterday's close" based on a certain distance price had to travel to get to that level (such distance determined through studying charts and logging statistical analyses of varying distances combined with varying MAE/MFE combos) with a stop loss and a profit target also determined from the MAE/MFE analyses, the only thing preventing the positive expectancy studies from translating into actual consistent profits is the inability of the trader to find a way to consistently trade every appearance of the pattern according to the positive expectancy rules.