Hi,
New to forex, I want to learn everything about price action, any resource recommendations? books, sites etc.
also, is price action of stocks and equity the same as forex? when i type price action in google, stuff comes up, but most of them doesn’t say if it is for equity or forex, does it matter? or price action for any investments follow the same science and patterns?
bump. …
There’s not a whole lot to learn at the basic level to be honest.
Price does 1 of 3 things.
It moves up
It moves down
It moves sideways.
They’ll be a lot of real smart people on here & other sites all ready to tell you that it’s not quite as simple as that, & you can cook any which way you choose, but that’s all there really is to it.
The object of the exercise is to lay down a long bet when prices are motoring from bottom left on your chart towards the top right.
If you want to try profit from a short bet, then you want to be looking for your price bars to get motoring from top left on your chart towards the bottom right.
Doesn’t matter what kind of bar you’re watching, from tick right through to monthly – principle is exactly the same. Neither does it matter what type of instrument class you intend trading, they all look the same with the lights on.
If you really want to impress your friends, then tell them that whichever time frame they intend using as their primary entry, management & exit tool, be sure to check a couple timeframes up to ensure that one is headed in the same direction.
If your primary timeframe is the 1 minute chart, then it would be really cool if your ¼ hour & perhaps your hour charts were headed the same way. Buy pullbacks in an uptrend, sell rallies in a downtrend.
For a ¼ hour primary, then look up to your hour & 4 hour timeframes before pulling the trigger.
Whatever you do, try extremely hard to resist the temptation to decorate your charts with all the pretty colored wavy lines & weird looking indicators.
They belong inside a childs coloring book, not on a working technical chart.
What exactly do you mean? Do you mean for example, if there is an upward trend on the 4H chart you should buy when there is a pullback on say the 30Min chart?
To be exact, for price to move there has to be a difference in price therefore price can’t move “sideways”. Price is either moving up, down or not moving at all. I am more of a “right brained” trader. I am not a technical trader at all. I see pictures. You call them charts. There is time and price on the chart. At time t, price is p. Call it p(t). At time t1, price is p1. Call it p(t1). I do not need to look at different time frames. I note the price p(t) at the beginning of the week. During the week, I notice if price is above or below the weekly open price. I can calculate the difference with simple subtraction p(t1) - p(t). If I want to get fancy, I can calculate the percent difference, using multiplication and long division 100 * [p(t1) - p(t)] / p(t). You may want to do the same for last week’s open price, the current month’s open price and current year’s open price.
The “right brained” people may not need the wavy lines and weird looking indicators but the “left brained” people might. It would be condescending of me to tell you what you need or disparage you for the tools you use. I am happy to show and tell you what I do and let you decide if you can use it for your trading.
Price action is how price moves over time. Pick a price point on the chart and price will either be moving towards the price point or away from it. As mentioned above, the weekly open is my reference price. Price is either moving towards the weekly open or away from it. You can keep track tick by tick, minute by minute, hour by hour or day by day. That’s what the different time frame charts do.
Take a look at Nial Fuller’s videos on youtube. Works for me.
I will take a loook
Pick a pair, an active one. Start watching it during the London, New York overlap. Place some demo trades. Watch the tick chart as well as the candles. Sit in front of your monitor all day, for as long as you can stand. Then you’ll begin to get a feel for price action and get in tune with the pair you are watching a bit.
After a while, if you can remain objective and not emotional and see what is there and not what you hope for, you may be surprised how many times you can be right about where price is going. This only comes from screen time and experience.
A lot of people don’t want to sit for hours in front of their monitors to trade. IME, watching price and movement and getting lots of screen time helps immensely.
IMO, new traders who only want to devote 5 minutes of screen time to setting up a trade and then walk away are doomed to failure. More experienced traders who have screen time under their belts can set it and forget it, because they have lots of screentime to draw from.
I also recommend using pivots and or fibs and or ichimoku to help see how price move and reacts to support and resistance.
Price does move sideways. It’s called ranging. As in ranging sidways for a while between support and resistance tightly. Price trends or ranges. You have to trade both differently.
If price only moved up or down, trading would be rediculously easy.
You are incorrect. You are “conceptualizing”. I am talking about reality. If price stays the same, it has not moved. There has to be a change in price to detect movement. Ranging means “moving between support and resistance” which means price IS MOVING UP AND DOWN. There is nothing to debate, it’s a matter of fact. Trading is a lot less complicated than most traders make it out to be.
If price ranges for many hours or even days it has in effect moved sideways as it has not moved a [B]significant[/B] amount either up or down. The up and down moves within a range are so tight that one move negates the other. Therefore…price has moved sideways.
No I am not, “conceptualizing.” You do not understand commonly used trading terms, that actual traders trade on.
Yes, in a sideways range, price does move up and down, but price is still effectively sideways.
Nothing complicated about it, that is how actual traders who trade and make money look at a range, “price is moving sideways in a range that it may break out of either way.”
Trying to say price is always moving up and down is only going to confuse noobs. And frankly you are splitting hairs and arguing a rediculous point.
Recognizing actual trends and [B]ranging[/B] and consolidations is critical to any successful trader or methodology, as each type of market behavior requires different trading tactics to be successful. Or at the very least recognize when to stay out because the market behavior isn’t right for your method.
Actually, you are the one who is going to confuse noobs. 95% of “actual” traders lose because they believe in fallacies like “price moves sideways”. Most fund managers cannot beat the index, they are no better off than the noobs. What you call “splitting hairs”, I call reality. I fully understand “commonly used trading terms” and that is why I avoid using them because they are conceptual and lead to losses. My methods work because price moves up and down whether the market is “ranging” or “trending”, which are once again, conceptual terms. I think we should agree to disagree. I don’t wish to trade insults with you. That is the direction you seem to want to take this.
Just as I said in my reply to your private message sorry you are just plainly and matter of factly… wrong.
And now you are talking about things you know nothing about, such as: “Most fund managers cannot beat the index, they are no better off than the noobs.”
Really? You know most fund managers and their results? Doubtful. Also, fund managers aren’t day traders or even swing traders, they are long term investors who hedge many instruments against one another. So, that point is really no point at all as most retail traders rarely take on more than a few currency trades at a time and many just one trade at a time.
There is HUGE difference between retail traders and fund managers.
No I will not agree to disagree, I will just point out that you are absolutely… wrong. Price does move sideways. Even your argument that in a range price always moves up and down is wrong. I’ve seen price sit for hours within a 0-5 pip range or even tighter, if that isn’t the very definition of sideways…
Frankly, just because you decided to reject commonly accepted trading terms and, “concepts,” is just silly. I’m quite sure it hasn’t made you any more successful than anyone else.
I also doubt you’ve gone beyond demo trading for any length of time, as know from experience that anyone who can’t recognize: trending markets, ranging markets and consolodation, AND trade them with relation to that type of market movement, will eventually get their but handed to them as you need a different approach for each type of market or at the very least stay out until your desired market behavior is present.
ThePhoenix:
You told me in a PM that you have been trading live for 2 years. Does that make you an “authority”? You said:
[B][I]
"And now you are talking about things you know nothing about, such as: “Most fund managers cannot beat the index, they are no better off than the noobs.”[/I][/B]
Are you sure I am the one who doesn’t know what they are talking about?
Active Mutual Fund Managers Still Can’t Beat Indexes
Posted by: Lauren Young on April 20
To paraphrase Joan Baez, where have all the active managers gone?
During the five-year market cycle from 2004 to 2008, the S&P 500 outperformed 72% of actively managed large-cap funds, the S&P MidCap 400 outperformed 76% of mid-cap funds, and the S&P SmallCap 600 outperformed 86% of small-cap funds. (For small-company investors, that’s a huge difference!)
These results are similar to the five-year cycle from 1999 to 2003, according to Standard & Poor’s Index Services. (S&P, like BusinessWeek, is owned by McGraw-Hill.)
What about international funds? Among international stock funds, indices outperformed most actively managed non-U.S. equity funds during the past five years in all four categories studied, including emerging market funds. In fact, emerging markets funds failed to beat their benchmark nearly 90% of the time during the period. That’s surprising, given that fund companies bill the foreign markets as more research intensive, and, thus, worthy of higher expense ratios.
Finally, S&P’s benchmark indices also beat a majority of actively managed fixed-income funds in all categories during the five-year horizon. The magnitude of underperformance ranges from 2% to 3% per year for municipal bond funds to 1% to 5% per year for investment-grade bond funds.
To put it simply, active funds failed to beat major indexes in every fund category.
Score one for Jack Bogle. (For more investing advice from Bogle, check out this BusinessWeek story.)
How have your actively managed funds performed lately? Which funds have delivered, and which ones have not? Indexers: let us know what you think, too.
And…
The Secret Fund Managers Don’t Want You to Know
by Jason Unger on April 23, 2009 · 5 comments
If your investments are being actively managed, your fund manager is likely keeping a big fat secret from you.
He doesn’t want you to know it, because he’d lose your business.
But it’s costing you money every day — your money.
The secret? Most active managers can’t even top the index they’re trying to beat.
Index Funds Outperform Actively Managed Funds, AgainAccording to new research from Standard & Poor’s, in the past 5 years, more than 71% of large-cap fund managers couldn’t beat the S&P 500 index they’re benchmarking against.
From the MarketWatch report:
The failure of active management is replicated across almost all categories, not only U.S. stock funds but also bond funds and even emerging-markets funds. What's more, those numbers are similar to the previous five-year cycle. From the close of Dec. 31, 2003 to Dec. 31, 2008, the S&P 500 dropped 18.8% — but that was still enough to beat 71.9% of U.S. actively managed large cap funds, according to S&P Index Services. "We consistently see that once you extend time horizons to five years, the majority of active managers are behind their benchmarks," said Srikant Dash, global head of research and design at S&P.We’ve talked plenty about index fund investing before, and how even if an active fund outperforms the index, fees will likely eat up the difference.
There’s a reason why VFINX, the Vanguard S&P 500 index, is one of the largest mutuals fund in the world (disclaimer: I invest in it). It’s got a low expense ratio (0.15%) and it invests nearly all of its assets in the stocks that make up the S&P 500.
But your fund manager doesn’t want you to know that you’re paying more and getting less. He doesn’t want to tell you that a nearly automated process can beat his “skills” in fund management.
Imagine a salesman telling you that you could get a better quality product for less money from his competitor. It would never happen.
Next time use a search engine so you can avoid looking like a fool in public.
YESSS, LET ME GET MY POPCORNS!!!
come on guys, let it go, different opinions, be the bigger men and walk away from each other.
A reasonable offer was made and rejected.
If price changes, it has moved. Price will either increase or decrease unless there is no change. If there in no change, then there is no movement. Sideways does not exist. Those who know the least shouldn’t call others names.
Ok, I guess I’ll point out what a fool you are.
If there is no change in price, and time moves forward which it does, then price has moved sideways. Price position isn’t just judged by where it is up or down, it is also judged by the time.
Time is very relevent to where price is. If price stays at x for 5 hours (or any amount of time), then price has moved sideways for five hours through time hence sideway, thus you are moron. (Thank you for making me, make myself get another infraction by the way)
Sorry, but anyone who’s trying to be a trader and rejects commonly accepts concepts and terms because they think are special and mentally above them is a fool.
Quit blowing hot air and trying to come off as some guru with a magical new way of looking at things.
If there is no change in price then there is no price movement. Time passes but if price has not changed then price has not moved. Price does not [B][I]move [/I][/B]sideways. Price may stay the same and if it does then it has not moved. That is simple physics. May I suggest you learn what the word “moves” means.
Your ignorance is exceeded only by your arrogance. You should learn to debate the issue without resorting to name calling. Your omission of the fact that you were shown to be incorrect about fund managers proves who is blowing hot air. You should apologize. There is nothing magical or new about looking at things how they really are rather then conceptually.
I wasn’t shown to be incorrect. Some articles you copied and pasted from google aren’t hard evidence of how fund managers make out. Also, as I stated before, comparing fund managers to retail traders is straight up stupid. They are two tottally different animals.
Getting back to the main thing we were arguing about. Sorry you are wrong, price moves sideways. I’m done with this argument I’ve already stated the obvious, that anyone with half a brain would understand.
[I][B]
“One thing kids should be taught at a young age is that when someone belittles another person’s words and dismisses him as a kook, an entertainer, or “not a serious person,” it’s usually a sign of fear, jealousy, or both. Intelligent, mature adults of goodwill do not dismiss opposing viewpoints. They listen, weigh what the other person has to say, then, if warranted, express their disagreement in a civilized manner.”[/B][/I]
Comparing fund managers to retail traders is appropriate in context.
Some articles are not hard evidence? Oh please.
You have stated the obvious? Hardly.