gymratnyc Kind of early to ask such tough questions. .. Let me try to answer as i understand price action in my world of a daytrader on a 5 minute chart trading the ES. Looking at price on the screen your job is to identify what has happened during the day and interpreting that with a view what is coming next. Myself i look at where in my mind the different price levels caused fear and greed within the other traders minds. There are many different players in the game with varied tactics etc but one common thread that runs through all traders heads are those two basic human emotions. That can not be denied. My job is to "ANTICIPATE" what the other players will do when price does what price will do. I care less WHY price will do what price will do, thats not my problem. My problem is to predict the next level either up or down based on price relative to the fear and greed from others. Follow? If i see a trend day as example and notice we have had 2 legs up and with narrow retraces along that intraday trend i am anticipating a 3rd leg as a continuation and might even consider to "add-on" if we get a "HOOK" up past the previous high. A 3rd leg up will cause more fear from those that are in losing trades and might throwin the towel. A 3rd leg up might cause greed in others like myself might consider doing ad-on, others might decide to jump on the trend because the peers are outperforming them. Price action is all you need to be in the other players shoes. Have fun, hope this helped.
Bob Pisani on CNBC explained the reason for the sudden decline yesterday. VIX was too low, and traders got complacent. So next time, if the VIX goes too low (whatever that means), we can just short the market like crazy.
So if you are using price action you can't trade too early in the day, because you can't read peoples emotions or know where price is going? You have to wait for a trend to be established? Let's say you were trading S&P500 futures, 10:30am might be a bad time to get into a position versus 12pm, when the trend has been established.
Accept it, if you need indicators you can't read price action well enough. Nothing wrong with using indicators to complement your readings just accept the fact that you will be slower and by definition, inferior. NN
Area of least resistance is easy to find. The problem is holding in those inner demons for most people.
I am going to wade in these waters and risk sounding like a fool, which probably happens often, however: there are many factors to the lag that we are discussing here clean data is one, filtered data is another, if for example you use a PATS data feed and compare it to another, like RealTick, Tradestation or eSignal or otherwise and watch the two sources of T&S side by side (obviously this is an exercise for your personal down time, not during a trade or waitint to take a trade) then you will see lag in its purest and raw form. Choose from there which gives the best unfilitered data on the same high volume contract, whether you trade it or not. Pick any high volume contract on CME or CBOT or NYMEX and watch the price data being reported. Now that you have selected whichever is best, whether the dome, or your charting package, or your broker's feed, then proceed from there. Now, T/A lag (technical analysis indicator) the micro fraction of a second that it takes to assemble a bar and calculate the Close, or HLC/3 or OHLC/4 or wait until bar close and then calculate is all the lag that one can expect... secondly, when you magnify that delay along with a filtered feed of tick or time/sales data, then you have a visably significant delay in chart recognition of what has happened and is happening at present. (hope I haven't lost too many people thus far) shoud I continue and finish this? it might be surprising what can be derived from a honest expose' ((pm me))
Could not have said it better and those true scalpers who consistently make money each week have mastered this... I am still working on the "master" part with my manual trading even after 10 years in the business.
The important thing is that you found what works for you/Makes Money. That's all that counts. Good job