Hey guys,
Been reading Chris Capre’s thread on price action (pretty good i must say!) and also checked out his website. But somewhere among all those pages it says that to be profitable trading price action, all you ABSOLUTELY NEED to know is the 6 BASIC candlestick patterns, is this true, is forex really that simple of a beast?
I just find it hard to believe that you can be consistently profitable using just those 6 patterns, yet SO many people go bust in this game…
Thoughts?
Cheers
Anthony
Hello Anthony,
First off, thanks for the positive comments on my thread. I’m glad you enjoy it.
Second, where do I say ‘all you need to know’ is these 6 patterns? Reason I ask is, I don’t believe all you need to know is 6 patterns.
The market is more complex than this. And you are correct - if it was just down to these 6 patterns, banks wouldn’t be spending tens of thousands training their traders.
In fact, I generally say in my thread, that learning basic candlestick patterns does not = trading price action.
My general methodology to approaching price action, is you have to learn to read the ‘price action context’ first before anything else (yes, before levels and patterns).
Price action patterns (like pin bars, inside bars, engulfing bars, etc) are reactive patterns to the market, and often give sub-optimal entries. I’ve stated this in the thread many times, especially more recently, and on my site.
Again, if patterns were all you needed (as they are easy to trade/learn), then why do so many go bust? Why dont banks just write programs to trade those?
Because the market is more nuanced than 3 simple patterns. This is why I suggest learning to read price action context first.
This is also why I suggest starting with my base model for understanding price action - that of learning to read the impulsive vs. corrective moves.
By doing this, you can discover the following;
So this is why I start with this as my base model, because it helps you to understand the price action context first.
Hopefully this clarifies things a bit further.
Any question - do not hesitate to ask.
Kind Regards,
Chris Capre
After revisiting the pages, i cant seem to find it, but i could have sworn it said to be profitable you would definitely need to know those 6 patterns to get started. Obviously there is a lot more to that. But I was half asleep when browsing, so it must just be a misunderstanding. I offer my sincerest apologies
Loving the thread, and the site, very possibly going to sign up for your course soon Chris, you have the type of knowledge i aspire to have
I look forward to hearing from you,
Anthony
Ha - I know about reading this ‘half asleep’ as I was doing that this morning waiting for my families 6am flight to come in.
But yeah, there is a lot more to price action then some simple patterns. This is something I’ve been trying to communicate for a long time.
Glad you are liking the site/thread.
And in terms of the ‘knowledge’, I’ve spent 40K+ hours behind the charts, and been doing this for 14+ years, so hopefully picked up a few nuggets here and there.
But in the beginning I was no different than you, so definitely you can make it from here to there.
Kind Regards,
Chris Capre
Excellent! It’s great to see an educator who doesn’t try to package trading price action as identifying a simple reactionary candlestick pattern. I feel many new folks try to over-simplify the markets by seeking out tactical shortcuts such as solely relying on PinBars or whatever Bars are out there, firing-off a subjective horizontal support/resistance line to justify a position.
Hi Chris,
I have emailed you via your contact form on your site (to avoid advertising etc)
Anthony
There are as many profitable trading strategies as there are profitable traders. There is nothing 100% one way or the other. It is best that you spend the time and money to develop what works for you.