I think you are making day trading way too complicated. Price action means letting price take you into a trade. Briefly, the way to do that is: 1. Turn on your trading platform, bring up a 5-min chart. 2. Look at price. Using your chart as an example, you wake up at 06:20, look at price and say, "Price just made a lower high and 1896.00 is the last support zone. I will short this puppy and target 1896.00 or better." 3. Short and take your 1896.00 profit when the break of that level fails. 4. Look at price and say, "That was one weak-ass breakout. Epic fail! I will buy this puppy and trail a stop below each bar's low because I can't see the left side of the chart prior 05:40 to determine if there's a previous high that is likely to be tested." 5. Buy and and take profits based on some method that makes sense such as a fixed risk/reward target or previous S/R breaks, etc. This goes on throughout the day and no indicators are necessary. One warning though: The best moves of the day will occur whenever you step away from your trading platform, so it's best to trade with a laptop that you can carry around with you.
I am so old and ugly I can't tell you when the last time I had some doji was. Keep up the good work saving lost soles.
GS, this is excellent advice, although I would like to offer an amendment: "The best moves of the day will occur whenever <u>Nodoji</u> steps away from <u>her</u> trading platform, so it's best to <u>be nice to her so she warns you in advance</u>". http://www.elitetrader.com/vb/showthread.php?s=&postid=2922915#post2922915 (Congrats on your day, Nod )
I have a question about the 5m chart: It seems lots of people using price action strategy are using 5m chart, however, if I recall correctly, Anek recommended using volume chart instead of 5m chart as the latter was too slow in reflecting the price movement; and he only used price action to guide his direction, and he actually used INDICATOR for his entry. He would be probably the king of Price action on ET (I didn't follow all the forums at ET, so I could only say so based on what I have followed at ET), still no one beats his record of 6 figure gain trading only about 20 ES contracts.
I use PA primarily but found that using an indicator helped more. The only thing is that there are few indicators that could have predicted this morning's rally but PA as NoDoji mentioned would have got you in once the market rallied in the first 5 mins after making a low.
There are many ways to trade and many time frames to trade in. I found the 5-min chart to work well for the way I trade at this time. I don't even know what a volume chart is. I use price action to guide direction and some other things to cheat my way into early entries at times, though none of these is necessary to trade well. I have a bag of tricks that are my own and constitute the particular sharpness of my edge. Having looked back at the moves in ES in the fall of 2008 (nice how that phrase appropriately refers to both a season and a market event), I can see how 20 ES contracts traded up and down on certain days could easily produce a 6-figure result.
I haven't updated in the last 2 weeks because I did not trade good. I started adding few indicators to see if that will help filter out the trades. It just made things worse. Now I am going back to basics and trade based on PA only. No indicators, just 30 min, 5 min and 1 min chart. Will start posting results from Monday again.
Even if you don't post here, at least keep your "did not trade good" trades/charts in your own personal journal so you can refer to them regularly and remind yourself what not to do. I kept a journal here through the good, the bad and the ugly, because a lot of experienced traders gave me great advice through that journal. Really, that is the reason for keeping a public journal in a trading forum. When I got to the point that I knew how to trade and manage risk properly, I closed my journal, because the hurdles I now face are not how to be profitable, but how to trade as a true professional. That is something that must be worked through individually. Neither the finest mentors nor the finest authors can make that journey for you. On that note, I'm currently reading "Trading in the Zone" for the 3rd time.
I have saved the charts. My PA method gives 1-2 signals at most. Basically I am buying the break of support on 30 and strength on 1. I use the 5 min for filter. If the 5 min breaks the 20 p low, I do not take it. I am going to just trade this set-up and not switch between strategies or add indicators to it.
That is a really interesting strategy and feel free to tell me "none of your business", that won't bother me one bit, but why buy a break of support rather than a break of resistance? I would normally look to sell a break of support unless some kind of bottoming/reversal signal is put in.