Hey guys so I’m getting to the point now where I need to fine tune my trading in order to progress as a trader, however I seem to be flitting between price action trading( chart patterns, Elliot waves, candle stick patterns) or using indicators( manly MA’s and RSI and MACD). So which one is better because I seem to be flitting between the two and it has affected some trades and it’s bit annoying because it feels like a newbie problem this, I’m going to try and work on joining them but I don’t think that it’s possible todo to be honest, so I need to get the figures later so that I can see which one I’m more successful with I think.
Why do you think this?
I do not believe there is any need to divide PA and indicators into mutually exclusive camps simply on the basis of their definition. Neither type of TA will function 100% of the time, and anything you do use will only point to a higher probability of what might happen next and not a certainty. This means that whether you lean more towards so-called PA or towards indicators, there will always be trades that would have worked better with one approach rather than the other.
There are many ways that PA and indicators can and do work well together and can be blended into a whole. For example, many (maybe most) PA traders also use an MA for confirming a trend and its strength. Equally, a trader using indicators may well include S & R levels and candle patterns without cluttering their charts.
I think the solution here is to carry out a thorough individual evaluation of each of the analysis methods you are applying and identify why you are using it - what is its purpose and what is it telling you, and under what circumstances.
For example, are your indicators telling you something new or just used to confirm another indicator’s message? A common reaction to discovering the fallibility of one indicator is to add yet another indicator to “confirm” the first one (and then another, and another, and another……). But the end result is often the so-called “analysis paralysis” where you don’t know which “signal” to follow as there is always another which is saying “no”. A better approach is to just use your risk managment to resolve the fake signals and thereby limit your losses but run your winners.
Here is one example of a multiple-indicator screenshot that I picked off this forum. I am not in any way criticizing the author of this model. It may well work well for him but for me it just gives me a headache and I cannot see anything here at all clearly. Then compare this with the same chart period underneath that has minimal additions of only a couple of MAs, some horizontal lines and a typical candle pattern showing a failure off the (already tested) support line and an MA crossover.
I have put these here only as examples to demonstrate that PA and indicators can co-exist provided they all perform a unique and individual, contributive function on your chart and all other non-essential and/or repetitve clutter is removed:
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MA, RSI, and Stoch are still powerful indicators to determine market trend…
It’s not about which one is better. It is about which one you like and understand the most. You will find people who price action and vice versa. You have to do a lot of experiments to find what is best for you. What works for you may not work for me and vice versa.
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Hey everyone thanks for you replies and from @anon46773462 example I can see how you can effectively join the two. So I’m going to give it ago and like @Anderson007 said I need to experiment with different things and do what I feel is more understanding to my self. Thanks very much for the reply guys.
Rob
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For me 2nd one, yes PA trading strategy! But, if anyone is comfortable with the indicator based system, then I have no objection at all.
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