Price Action

illiquid. Can you elaborate on this part that I underlined above? I'm interested to hear what you mean by this.

Thanks!

 

Geez . . . OP asks for something, then doesn’t get it.

Konviction warns of what will happen, then proceeds to make it happen.

Illiquid tries to help, then gets it wrong.

Price action is how price acts. Pretty obvious isn’t it? If price is analyzed in any manner at any point in time without a bunch of derivative tools – ie, indicators - then you're observing price action. There are no threads on ET that don’t overcomplicate the simplest of things.

Most famous PA thread on ET? probably the AHG Thread

It’s basic, but insanely long. If anybody needs help with a consolidated version, just PM me. It’s actually very high-level if you absorb it all. If you want detail, go read Al Brooks stuff . . . talk about painful.

I read everything I can get my hands on re: price action just to help myself evolve my strategies because it's my version of keeping it simple on the important stuff. Price action is what it is . . . if you debate it, you are not a successful trader – you are still trying to figure it out.

Keep trading.

J. Scott

 

Price action is the usage of price to unbiasedly determine the following points or actions:

- Areas of support / resistance
- If those areas are holding / breaking or consolidating
- Interconnectivity between multiple fractals to recursively determine trends within trends

 

For now, read my post in that thread that begins with this:

Someone PMed me and asked me to post specifics of the problems I'm having in this thread.

It's a long post, but it sums up the major conclusions I came to while studying PA as a result of that thread.

 

All I can say is that there aren't too many elements of the tape to use -- best make good use of them all (if you're drilling down that close on your time frame that is). There's alot going on between bid, ask, price and time, it's up to you to triangulate and see where things may lead. This is more pertinent in equities rather than futures.

Memory, that's useful in any market. The tape is just a footprint, you pay attention long enough and you really have no use for charts. All the pertinent levels should be in your head. When I used to trade euro futs every day, I could remember breakout and support levels months earlier. And charts just aren't accurate enough in the time frames where they are most useful. A single solid candle might look like a simple breakdown, but within that one bar alot of info might be hidden. It all depends how deep u want to dig.

 

PA is simple Buy/ Sell @ Price Levels.....if you have Buy next time when
the price hit this level will be Sell ....some times you can pass on Buy and go in @ Sell

 

well, yes, the right moving average can give perfect entires and exits.

Unfortunately, it's impossible to know beforehand what period of moving average is going to be "right."

 

Well replied. However, it does not just stop there, look at how his system responded when the market consolidated or was undecided, quick flashes of red and blue at the top and the color bars doing the same, the infamous chop monster.

It's actually quite telling when a user posts a chart with indicators and claims superiority or ease of use when in fact the person is just showing that he is a member of the "Amateur Club LLC".

Some indicators look pretty when the market is trending, others require a sideways market, and so it goes, nothing works on all scenarios as the gold is to detect incoming chop or incoming trend, if you know that, you are made, sort of like knowing before hand the correct moving averages, what you said

Using indicators is for the learning stages, eventually you graduate such stage and you mix them up (the next stage) until the day comes when you realize you are better off with price and volume alone because eventhough it will fake you a lot too at least it does so less often.

One chart is not enough to prove anything, a great collection of continuous ones without tampering with the settings would be, and the conclusion would always be the same, an utter waste of time, which is why indicator deverlopers or sellers never do this in their presentations.

 

I said superiority or ease of use, you left the other half out.

Then what was your intention for posting such crap, doing harm ?

That leave us with two possibilities in your intentions A) Amateur B) Malign

The moment you add indicators to highlight price action is the moment you add crude oil to Whiskey, you basically, fu** it up.

 

Price action is O,H,L,C and everything that is directly related to it. For example, higher high, consecutive lower closing prices, gap open, etc.

Indicators are derivatives of price action.

The reason is simple. If I have just the value of an indicator, there is no unique solution for the price action that created it. As a matter of fact, a 30-bar MA = X is an equation with 30 unknowns if you want to resolved it back to price action.

This is one of the many reasons that derivates of price action do not work. They correspond to multiple solutions. On the other hand, price action, like a higher high, h[1] < h, is a unique solution.