Hi guys,
I’m trying to write a suitable basic trading system based on price action where I can later revise as I backtest and gain more experience. But I feel that price action is so subjective for every scenario I’m having a hard time writing a concrete system based on it.
Just wondering if anyone has some suggestion on how I could go about brainstorming for this. I would like to start backtesting as soon as I can complete this.
Thank you,
Clark.
google it
utube it
see if that gives you a ton of ideas.
Interesting, I was on a webinar earlier today and the instructor was saying how he believed to really trade price action properly, it takes years and years. He was saying there is no short cut for understanding price action and screen time was needed…
I think that that is a pessimistic view. PA works well alongside trendlines, support and resistance lines etc.; as long as you keep it simple and don’t get too ambitious you can be consistent way before you have invested ‘years and years’. You then just find that you are improving for years and years thereafter, is the theory…!!
Very possibly true. That was just the opinion of the instructor, personally, I have no idea as my trading method doesn’t look at that stuff!
ha, yes, just to be clear I was saying that the guy doing the webcast was being pessimistic, not you! I just don’t think that the basics of PA are that complicated, it is trying to run before you can walk that catches people out, more than that they have not pit enough years into it, imho.
I wouldn’t doubt one bit that to fully apply price action or any type of analysis for trading consistently would take years and years of practise. But I’m currently just trying to find a place to start with where I can later expand on as I learn. I guess confluence would be a good place to start. 
Thanks again,
Clark.
Confluence is a GREAT place to start. But then you need a trigger, and an exit strategy.
Price action is a lot simpler than one would think. It doesn’t take years either. All you really need is one siple setup, and to then be able to spot it in your sleep. Base your trades around that everday action, and stick to ONE currency.
You can shoot yourself in the foot monkeying around the charts and accidently compounding a bad situation by either hedging yourself by losing the gains on one with a bad trade on another.
There are a myriad of possibilities that show up daily for opportunities. Learn to spot them, and don’t hesitate when you see it’s time to jump in.
Most importantly, size your positions correctly.
You can make all the money you’ll ever need if you don’t try to make it all in one trade.
Cheers!
I think the amount of time to learn Price Action depends on the start point. For somebody who has little or no experience with charts, Price Action will come easier than somebody who has used indicators. The indicators have probably created a dependency and expectations that takes time to overcome. Somebody fresh to Price Action has no preconceptions and can grasp it quicker.
Thank you for the advice Master Tang, I appreciate a lot and I definately understand what you mean. Currently, I’m not focusing as much on the actual nitty-gritty of trading, but more on risk management and managing my account. In my opinion, price action trading seems to be fairly straight forward, you see a possible set up, get triggered, set your SL and TP’s accordingly and hope for the best I guess. Now, I’m not looking for 100+ pip gains per trade, I’d be quite happy with making an average sum of 20-40 pips daily.
CodeMeister, I am having a hard time understanding what you mean when you say you disagree? And thank you for your opinions. Luckily, I’m still fairly new at Forex trading, so the dependency of indicators haven’t kicked in yet before I took them out of my charts completely! =P I agree with what you were saying in the fact that students of price action who have not dealt with indicators are off to a much better start!
PS, it’s glad to see someone from Calgary as well. =) Thought I was the only person freezing my a** off on this forum. =P
I think the instructor is not a trader… he does not understand price action…
I guess the instructor could have meant it would take years and years to “master”?
But to be fair, finding candlestick patterns or general PA signals are not hard at all… Only my opinion of course. Considering 15 minutes ago, my 9 year old brother pointed out a pin bar on my charts… I guess he grasped it simply by creeping my YouTube videos over my shoulder… Haha…
Clark.
I suggest that you do a google for price bar patterns, you will find a bit of material…select two or three patterns. start to watch for them on charts, learn what precedes them and what follows them. especially what precedes them… You will find that you will be able to spot them with some practice…, gradually build your inventory of patterns… Determine the success rate of each… use pencil and paper to record each occurrence and the number of pips traveled… Very rapidly you will be an expert… As you gather information about each occurrence you will become confident in a few of the patterns and those will be the ones you work with. One thing you may become aware of is the first lower high after an uptrend and the first higher low after a downtrend…(multibar), Those are usually confirmation of the trend change and actually may be the only pattern you need for great success as a trader. I don’t think any of this will take much longer than a month as long as you are willing to keep good records.
I have been studying PA in-depth again. Anyone know some good info on PA? And what do you think of harmonic patterns?
Thank you for the advice Blaiser it is appreciated and I will definately check out those diagrams once I have computer access. =)
Zaboon, I’m glad to see other beginners explore PA as well. I’ve been closely studying ICT’s thread and his video lessons. I’ve also used the free articles and videos from Nial’s website. (I am not endorsing him at all, but his articles are pretty decent.)
Clark.
I am collecting all the patterns now. I think I know most of them, but I am greedy! The basic price formations work pretty good though by the way.
Any more significant S/R lines?
Have you seen ICT’s thread? He has just recently added a new video describing support and resistance perfectly. I strongly recommend reading the whole thread, it’s not very long, only 11 pages. His videos are also done very well. =)
I started to notice after 2.5 yrs of trading that the simple 1-2-3 has added +pips for me on the 4H TF. I’m not greedy and use a TP of 80% of the 14 period ATR; SL of 40-50%. I do adjust if there is a S/R zone nearby or I don’t take the trade at all if there is no room to grow. Go to tradeprofitablycom, a learning resource. Lots & lots of good stuff there; I got the URL here on a BP thread someplace & find it very valuable. d.
Got covered that. That video was very basic. I just want more of those price patterns I guess. Harmonic price patterns are ones I have been curious about. I have the indicator but never used for trading yet.
So far, I have been using basic patterns such as triangles, flags, or trend lines, significant S/R lines, etc. I also have my version of patterns based on the Bollinger Band.
Like I said, I am too greedy to know every min. of trading opportunity lol. In fact, I can almost recognize an entry point at almost any time. The tight range would be the period I can not trade due to the super low volatility. Or the range period with super high volatility where price goes up and down too fast like crazy.
I just want to add more price patterns to confirm my entry rules better. 
