I am sorry I have a totally different opinion on Gary Smith's book: How I Trade For A Living It is one of the worst books on trading that I had read. He mostly wanted to boost his own ego (he talked about his "performance" a lot in his book). In a printed book! He hasn't told how he trades. And he trades MUTUAL FUNDS! I don't know what kind of trader he is categorized as. Price action: If you purely look at price action, then you shouldn't even look at moving averages or Bollinger Bands. Only price bars. Conventional OHLC or candles. No derived indicators of any sort. I don't think support/resistance are considered "indicators". They are actual price points where supplies overwhelmed demands or vice versa. But support/resistance are all subjective - depending on one's time-frame. A support on a 1-minute chart can be resistance on a 60-minute chart, etc.. And so are fibonacci, Elliott waves, trendlines and channels. They are all interpretive artifacts. You make them what they are. Hopefully if there are more traders looking at the charts the same way you do and act in unison, you can have your edge.
What I've learned in my nooby year and a half of trading is that price bars paint pictures of exuberance, disdain, boredom, indecision. Avoid trading boredom and indecision. Trade the exuberance or disdain that breaks out of periods of boredom and indecision, or join the exuberance/disdain when price pulls back to a strong trend line. If you're an experienced cowboy, fade the exuberance or disdain as it reaches its climax. If you want to play counter-trend more safely, wait for the HL or LH. Al Brooks wrote Reading Price Charts Bars by Bar and I'm still working my way through it, but so far it's it is the best technical trading book I've ever read.
So if I had "predicted" the opposite of your choice, would I have been "right" most of the time? Joe.
Oh, come on. That man was owned and seriously debunked when he started haunting YouTube in Jan 08 or 07 (whichever), and his shills started appearing on ET to worship him. A number of people on ET hammered his shills when they appeared here, seeking free publicity. Everyone who questioned the reality of his claims, was removed from posting on their site. He is a failed pit trader. And people should avoid him.
I can see there's still a lot of debate about what price action really is. My possibly wrong, but my simple definition of price action is simply looking at candlestick or bar charts without generating indicators that involve calculations -- only visually-inspired drawings allowed which I consider to be support / resistance and trendlines. That's what I meant by historical data, just looking at price and volume plotted as candlestick charts. But I don't have to adhere strictly to that definition, just looking for somthing that works and "price action" seemed most directly and one popular method here. I appreciate the book references and advice. Smurfie, what indicators do you use to assist your price action analysis?
That was my subjective observation, maybe it was closer to 50%, I just generally felt like the current price behavior was not telling me much.
Al Brooks "Reading the Charts Bar by Bar" was mentioned in a previous post. I want to second that recommendation. Unfortunately, the book is poorly edited and a difficult read. The good news is that if you can get through it, you'll learn a lot about price action trading.
One of my favorite threads: http://www.elitetrader.com/vb/showt...perpage=6&highlight=price action&pagenumber=1 Read the entire thread if you want, But I would start by reading all of Dustin's comments first.
Price Action for me is watching bar by bar and how it closes relative to the last bar. Along with S/R and trend lines. Also trying to realize the general mood of the market. News is a huge factor in the market mood from the 8:30 releases and the 10:00am releases. till about 11:30 AM after that it get erratic. That's it for me. Put some good money management into play with discipline, and if your psych is in check the money will flow. TT