Most new guys make trading so complicated, because they don't know any better. The problem is they need a strong base, or starting point. I just provided them that in an incredibly simple statement. "ONLY buy strong stocks, ONLY sell weak stocks." Do I ever do countertrend trading? Yeah every day, but I can tell you it's 2-3X harder then trend trading and about half as profitable. As a new trader they should forget the idea completely. In fact they should ban themselves from it. Forget the proof. Take the idea and trade it small for a week. If you (anyone reading this) aren't profitable yet then what's the harm? Don't try to backtest, just trade it small. I can't stand backtesters. You don't learn to trade that way. Take all the indicators off of your charts except volume. Forget T&S, LII, Open Book, ticks, candles etc. Forget anything else you think you know, and just try it. And use charts, lots of them. I know from reading this board for ten years that nobody will actually do this, but I was compelled to write it anyway.
Synic is correct, most use minute bars but then again, most lose money too. Any chart that is grounded in a variable environment will produce varying results. Charts that are grounded in a fixed & stable environment should give you consistent results but will AT LEAST give you less noise to make your decisions from.
Correct? Hey why watch HD TV when you can watch the same movie on an old analog low definition screen.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=29005&perpage=40&pagenumber=1 Here is one of them.
The problem I had with them was that the range bars always gave "false" signals, false breakdowns in an uptrend and false breakouts in a downtrend. However, when I compared range bars with minute bars in side-by-side RTH analysis (somthing I highly recommend for any and all of the categories that you are interested in) I found that I was able to interpret the range bar action much better, and the signals were so consistent that the proof was indefatigable. The bottom line? It's really about the signals you're getting in your brain, not on the screen.
Candlesticks need to be interpreted and price movement needs no interpretation. No candles for me. Nix the time too. Yuk! Agreed, it distorts price action. Agreed as well that some like the combo of Volume Bars/Range Bars and some like Volume Bars/Time Bars. Whatever floats your boat an makes seeing the price action easier. I simply like CVB charts.
Yeah, I remember the books he wrote. They're professional quality and do a perfect job of describing the different types of traders and their mindsets.
* Volatility Analysis * Intermarket Analysis * Support / Resistance Zones (not levels) * Position Size Management * Yearly Seasonal Tendencies * Intraday Tendencies * Japanese Candlestick Analysis (above in order of importance to me) All the above under the umbrella of Technical Analysis due to the fact I derive the info via analyzing what I see on charts. In addition, I use minute charts and I do not use indicators (e.g. cci, rsi, macd et cetera) nor volume. Yes, it takes thousands of hours of screentime (not hundreds) to put the entire puzzle together and the above is just parts of the puzzle because there's other stuff that price action traders use as a critical aspect of their trading. Last of all, I mention in the list above Position Size Management. I just want you to understand that profitable price action traders that don't use indicators usually see other things that are more important than their entry signals. In fact, I'm a strong believer if those other variables (e.g. position size management, proper capitalize, proper trade management after entry, proper trading equipment, discipline, market experience or trader psychology et cetera) are not in place... You are at a huge disadvantage before the appearance of any Entry Signals. Mark
Most traders lose money period. There is no evidence that traders who lose use minute bars and that those who win use something else. Indeed, minute (time-based) bars provide information that volume bars do not. If volume bars work for you, great. One must be careful not to confuse correlation for causation.