Pure price action makes your beloved candlestick indicator. It shows a referenced start(open) price the support level (low) the resistance level (high) and the period end time (close) on a lower time scale. What it doesn’t show is what happened during that time scale. Pure price action practitioner’s look to these levels to make their decisions. Not to the voodoo powers candlestick patterns might hold.
No quite bro. What we are saying is the way we perceive a chart varies with the individual blending their motivations and goals. I trade tick charts using PA and all I’m concerned with is what’s happened on the chart in the past 3-4 hours and what time of day it is. Yet I have built/found indicators that represent what "pattern"s I find. And a candlestick trader would recognised the pattern I trade as an inside bar, double, triple even quadruple inside bar but only on a higher timeframe. There are many many tools that a trader can draw from. It’s up to you to choose which ones. Price action but is the Higgs Boson to all these "tools.
I failed, then failed miserably, then failed again.
The way I understood Johnathan fox’s thread was that this was all factored into the candle patterns.
Is price action not just looking at the sequence of candlesticks and trying to see if the market will do the same as it did a previous time at a support or resistance level.
@_Bob, you mention ‘content’ in your post…what exactly does that mean…sorry If it is a dumb question.
No dumb questions bro. Content/context is simply the environment the instrument is trading in. It is an intangible concept making it hard to define with set parameters and is extremely subjective. The multi-timeframe anaylsis I went though early was a process of defining content.
No offense to anyone who has previously posted, but I have to disagree about what was said regarding ‘price action’. Price action, IMHO, is looking at a bare chart with candles and by reading it and determining on your own where s/r levels are, detecting patterns, trendlines, etc., you make decisions on your trades without excessive use of indicators and ‘strategies’. I do NOT think that candle stick patterns are something made up to scam you at all! Every thing that the price does leaves a clue. It’s our job to piece it together and make a conclusion. I very much agree with the fact that you need to ‘zoom out’ and do top down analysis, but if you are not analyzing down to the candle - you’re missing an opportunity.
[quote=“cndlstckchic, post:25, topic:116816”]
I do NOT think that candle stick patterns are something made up to scam you at all! Every thing that the price does leaves a clue. It’s our job to piece it together and make a conclusion. [/quote]
I don’t think the message was that candlesticks themselves are a scam, rather that they are often used by persons to sell products based on candlestick “magic”. As with all things, it is down to the individual trader to understand what a candle is showing in the context of the timeframe that one is using and the other price “clues” that the market is offering. "clues is an excellent term for that!
The problem, as always, is not in the indicator or PA line or pattern or candlestick formation, it is in the trader not doing sufficient homework to understand what they are suggesting. It is no good just saying “aah look there is a Doji, therefore the market is going to do this…”.
A 5m candle formation is invisible on a 1H chart, and a candlestick on a 1H chart is invisible on a Daily chart. If a candle is to be of value then it should be viewed either purely within the constraints and limitations of the TF being used, or, preferably, in the overall context of the situation in a higher TF.
There is nothing magical about candlesticks. The price flows in a constant stream. Candlesticks just break that up into a series of arbitrary time-based units each with its own OHLC. If we like, we could say that candlesticks are like looking at price as a series of still shots rather than as a movie. But if you flick through those still shots as a series then you can, and do, still see a pattern that is significant.
Your first price action analysis was pretty good. I wouldn’t have opened an order on this pair at that time, because I think it was still too indeterminate and therefore risky. If you ever want to talk price action, feel free to hit me up whenever I am on here. I’m not claiming to be a master trader, but I do have several years experience - and believe I can offer feedback in a constructive way. I also started a trade journal and have commented on jseymoure’s journal quite a bit. If you want to check it out to give you an idea if we might be on the same page as far as trading style goes. There’s a HUGE variance in the way people trade, so often threads break down into unhelpful nitpicking which is extremely frustrating when you’re trying to learn. Good luck with your trading journey.
…and I thought we were just trying to show PA trading in the bigger picture along with some cautions about its limitations. It does have limitations as demonstrated by the huge number of loser Newbies who have tried it.
I think we were only trying to help, but…oh well.
BTW I do think your journal is very good and well-written.
I suppose in my nievity I started this thread hoping that is post a bit of analysis and people would comment on it, but like you say…everyone one is different and see the market in their own view. It’s all very subjective and like simple_simon says, seeing an x pattern does mean it’s always going to do y.
appreciate the offer of help…ill try not to make you sorry for offering
[quote="_bob, post:4, topic:116816"]
Looks like 148.550 is the magic number. If the price breaks above that I believe your analysis to enter a long will be confirmed. But don’t forget the fakey. They occur on all timeframes
If not go short and go hard. Best of luck bro.
[/quote]
Sorry I meant no offense and actually wasn’t referring to you at all. I agreed with your comments. I was just expressing my own frustration with forums in general, because there are such a wide variety of approaches to trading and new people are given advice from so many different types/styles of traders that it leaves them more confused and lost than when they came in. At least that my own experience.
[quote=“cndlstckchic, post:34, topic:116816”]
Sorry I meant no offense[/quote]
None taken, CSC!
[quote=“cndlstckchic, post:34, topic:116816”]
I was just expressing my own frustration with forums in general, because there are such a wide variety of approaches to trading and new people are given advice from so many different types/styles of traders that it leaves them more confused and lost than when they came in [/quote]
I can sympathise with what you are saying, although I have had very little experience from any other forums besides BP.
The problem you describe is indeed frustrating to new traders. There are no official schools or training courses or qualifications for traders as there are with other professions and that creates an open opportunity for all and sundry to offer all kinds of methods, techniques, products, etc without any quality verification or performance certification!
But there is also a tendency amongst newbies to try and seek the “easy” route to a million by simply blindly piggybacking someone’s method or signals and not bothering to understand the real principles and concepts and limitations and constraints underlying them.
You have surely also seen how often someone appears with a “winning” method and immediately attracts an eager band of loyal followers. It usually starts of ok, then a few problems appear, then the band of followers start “improving” the original idea, then the originator disappears and the thread dries up - and no one ever reports their first million earnings from it…haha!
But you appear to be a very sensible trader and you have clearly worked very hard at understanding the principles behind your approach (as everyone should)- and you have confidence enough to go far with your work! Keep it going and the very best of luck to you!
Haha…thanks I would describe myself as ‘over the hump’, meaning I am past the hardest part of the learning curve - but by no means where I want to be. Which is rich and working from home or the beach - or wherever! LIVING THE DREAM. Sorry for hijacking your thread datam, I’ll get back to my area now…hope to see you around!
Hello Datam, I will second on _bobs concept of “context”. I learned this years ago when I was just a little snake with an eggtooth. I picked it up from J Yu, of Underground Trader fame. This concept along with “premise” has helped me to coordinate my thoughts in a rational way. Sometimes I walk the trade through verbally.
So my observation is that before taking a trade, a trader should be able to explain it, what is the context, in other words, what kind of market overall, Bull, Bear, Range, Consolidating, Tight consolidation, Wide consolidation, Choppy, etc. Then the premise, or reason for the trade, honestly, if you can’t explain it in a sentence or maximum, two, don’t do it. Now and I am not talking about a four paragraph run on sentence either. A Quick succinct explanation.
I agree that there is an element of people just wanting an easy route to riches…but there isn’t one. That’s probably why ‘Copy a trader’ sites have been appearing. But I would like to say that I’m truly looking to improve my understanding so that I can make a bit of beer money and some.
I do value everyone’s contribution to this thread and I hope that me asking questions helps others. let’s try to keep on topic.
I thought you might appreciate the following quote regarding when and how price action setups should be applied. It kind of ties in with what has been said above.
The quote is from Nial Fuller’s site and I am sure he won’t mind me posting it here:
By learning to master one “setup”, we mean you learn to master trading that particular setup in a particular market context. For example, you might learn to master the pin bar strategy in a trending market and only enter or exit at confluent levels within the trend, this is an example of how a “setup” can mean the actual price action setup itself and the market conditions that it is traded in. So, in order to fully master one price action setup you must learn to master this setup in one particular market condition
It is not sufficient just to recognise an engulfing candle, pin bar, a pattern or a line. These can all be significant but need to be analysed within the surrounding other factors concerning trend, range, timeframe and so on in order to evaluate them as trade opportunities.
Are most of you trading full time or are some part time traders. For me I don’t have the luxury of looking at charts all day. So I need to do my setups either beginning of the day or the end of the day using New York Close charts. Anyone else in a similar position.
Also due to my constraints, I’m only really looking a daily and 4h charts… But now will follow _bob’s recommendations for looking at higher and lower timeframes to get context (see bob, you have taught me something already).
For the higher TF traders, do you have a target pip number for each trade or due you just look at support and resistance levels when placing SL and TP points.
