Hey everyone, I have been a "pure" price action trader for some time now and I am looking to get others' input and collaboration on my style of price action trading. I do actually use a few moving averages, but only as trend identifiers; I don't use them all the time. So, I just wanted to start a thread on everything related to price action trading; current setups, theory, teachers of price action..etc.
I have been practicing a method on the 1/2 hr. bars. It is just so hard to keep my eyes open. I am in the (mst) time zone and this method starts at the London open and goes into the next days session for the USA. ElectricSavant <object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/2KM4-T2p-Ak?fs=1&hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/2KM4-T2p-Ak?fs=1&hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object> <object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/BhUkqRBpi10?fs=1&hl=en_US"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/BhUkqRBpi10?fs=1&hl=en_US" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>
Couple of things I didn't like about that method. 1. Your entry bar is traded on a live bar. The low and the high of the bars have not been set yet. 30 minutes is a long time for plenty of reverses to form new highs and lows and get stopped out at. IMO a finished bar is a better entry signal. 2. A lot of the gains in this method are lost when the market reverses. Instead of just selling at the close of the bar, I think it is better to incorporate some kind of risk to reward method. If your risk was 10 pips, then take a profit at 40 pips (1:4). I saw gains of 40+ pips only to reverse and take a loss or smaller profit. Yes you will lose those 100 point pip gains, but those are rare. 3. I didn't understand when he said the close of the signal bar should be close to the open of the entry bar. Aren't the closes of all bars very close to if not the same as the opening of the next bar?
I had the same observations on point # 3....there are no gaps... Another observation is that the signal to enter can come when there is only a few minutes left to the entry bar...there should be a rule for that. ES
. Exactly, you gotta get a jump on the computers or anticipate the bar and put in a stop entry above it. Either way it's getting difficult.
a great trader can jump in anywhere and either win outright or minimize his losses to in consequential
The happy medium would be to close half the position at your RR objective, move stop to BE and ride out the remainder till close of bar. Personally, in that case, I'd set my second target at the high of the bar as statistically with a high close(>75%) the odds are well in your favor of price revisiting the high resulting in a few more pips in the bucket. Thanks for sharing. JMO 2. A lot of the gains in this method are lost when the market reverses. Instead of just selling at the close of the bar, I think it is better to incorporate some kind of risk to reward method. If your risk was 10 pips, then take a profit at 40 pips (1:4). I saw gains of 40+ pips only to reverse and take a loss or smaller profit. Yes you will lose those 100 point pip gains, but those are rare.
in similar fashion a great poker player could take any hand and either win the pot or minimize the loss
The strategy in the videos can easily be coded in most trading software packages. I did the basics and not surprising turned out to be negative expectancy. God damned snake oils.