Hi Brucey
Yes price action is the one it tells you what is happening in the moment and past but the indicators can help you confirm the PA
cheers Eric
All those claiming to trade price action are infact trading an indicator. Candlesticks are no less a valid indicator than that of MA stoch MACD etc. There is only one relationship you need to worry about. Price vs time. What is the price now. Where was the price n bars ago. So so simple. Buy high sell higher I say
Indicators are a part of and used in technical analysis.
Technical analysis is a vast topic, which indicators are just one large sub topic within TA.
Technical analysis is a method of evaluating a security by looking at statistics generated by market activity eg past prices and volume. Technical analysts are not trying to measure things like the intrinsic value, instead using charts and other tools (indicators) to identify future patterns.
The field of technical analysis is based on three assumptions:
- The market discounts everything.
- Price moves in trends.
- History tends to repeat itself.
Basically TA is anything to do with charts, indicators are tools one can use in conjunction with a chart, you cant really use an indicator on its own.
Tools and trading styles are either part of technical analysis or fundamental analysis.
I am a newbie but have studied the forex for 18 months and traded every day with a small account which makes it very difficult i have achieved it and like you say PA is the main indicator of them all and I have found it is also very difficult for a pro trader to help you in my eyes its impossible to do, it is predictable but it can change just like that .and if you dont have a good STOP loss of about 30 pips ,which means you need a large account it makes it difficult if you got a small account but i have grown my account but it takes ages you need a ton of patients trading, i must say, and can get boring after awhile.
Position sizing and money management is the key.
Whether one uses the fixed dollar amount (or whatever ones national currency is ) or percent amount (usually 1-2%), keeping ones risk amount constant and adjusting the size depending on where one is placing the stop loss, the number of pips can change.
Agree completely. Similar situation to eric de witt. My trading has turned from losses to wins since I stopped focusing on TA and put that effort into money management. Still a long way to go but for me
I take the point that candlesticks are just indicators, but not all indicators are created equal 
By definition, those indicators that use an average of price movement over the last N periods will never give us the more immediate state of affairs, which we get from the latest candlestick movement. I would also agree that this is then a subjective analysis…but the use of the word indicators by the PA guys is just a way to group things…at least that’s the way I see it. Semantics really…
I have always understood trading “pure price action” to mean that these guys place more emphasis on the more recent movement in price vs average movement in price. Candlestick vs MA for instance.
And as others have said, they’re ALL “lagging”, anything other than lagging is…well…the future! (by the way, if anyone has a non-lagging indicator, please get in touch haha)
PS. totally agree that if any of these guys even showed a small account on fxbook, it would go a long way towards giving PA more credibility. I have heard all the arguments explaining why they don’t,but quite frankly don’t get it. The effort required is miniscule compared to the countless postings,charts etc. and would drive massive numbers to their websites, which seems to be the underlying aim in most cases.
Antcurious, excellent points and well said. I know you can tell from my previous posts that this has been on my mind for a while and I like to believe I am responding on behalf of a number of new traders who say they are so confused by all this and who somewhat perceive that we are in two exclusive camps. I think that is an artificial dilemma quickly resolved by bringing our definitions and semantics into harmony.
Another concern I hear is whether the tremendous investment of time and energy asked by these pa threads is worth the effort. The only way I know to answer is that everything you do results in learning one way or another. If, as I have, you plow through a ton of information on a subject and come away with a bad taste in your mouth, at least you know what you don’t want to do.
I must say, though, that the introduction of those pa threads, where they tell me how many subject areas I will need to master before I understand pa strikes me as presumptuous. My doctoral syllabus was not that lengthy. I have generally found that those who overcomplicate things and are unable to communicate their ideas succinctly are either wanting me to admire the speed of their synaptic transmissions or they’re just lost in their own catacombs.
As additional fodder for this thread, I will state that a 120 period ema is no more lagging than a current price bar, especially if the ema is applied to the open. The ema incorporates data from the current bar, which makes it just as up to date. Hey, they’re just looking at two different things. One is no more lagging than the other, but if you prefer to use your eyes to glance back at a little price history (don’t tell me you don’t do that), that’s your call. But, can you honestly say that a jagged, bouncing, what happened here price chart tells you as much/more than a smooth line or a nice heiken-ashi?
With regards to the time and energy investment…I have resorted to taking bits and pieces from the main threads and trying to learn that way, while trying to pay respect to the different philosophies and contexts of each approach, which actually in my opinion ends up being not that different from each other…even though the gurus are eager to differentiate themselves from each other…
Absolutely agreed on the 120ema point, another reminder of how important it is to know how your tools are designed and use or not use them accordingly.
A small point on MA’s and the like. One thing that bothers me about using a system that relies heavily on them is that your broker can have a corrupt data feed from time to time (dodgy candles are quite common) which can throw these out to the point of rendering them useless…
I feel (only slightly) more comfortable deriving a system from things that are transferable from one platform to another, such as basic candlesticks. Or even just price! I am personally still finding my way on this subject and have no firm conviction one way or another…for instance it still bothers me no end that different brokers show very different candlesticks on the same timeframes etc. I mean I get it…just don’t know where that leaves me haha…
Antcurious, concerning questionable data, I just have to tell you this story. It will reveal how dumb a presumably smart guy can be. I’ve been looking into Renko bars off and on for some time, hoping to find them useful in some way. As you probably know, a typical Renko chart is constructed offline from an m1 chart online. Well, I would go to the Renko and see these nice, long runs of same-color bricks. I even posted some pictures on another thread and asked participants to verify what I was seeing. At length, getting my head out of my butt, I looked back at the underlying m1 chart only to find huge chunks of missing data. On my IBFX platforms, for example, there is a gap in the eur/usd m1 data from 3/7 to 4/1 of about 100 pips. On the Renko, that ends up looking like a nice ten-brick run. Red-faced, I ran back to the thread, deleted and apologized. My personal jury is still out on Renko and I know I need better tools. Heh.
I fully agree with you MR Woof
But what makes me mad ,is this all over the net advertising Forex learn to trade in just 3 steps ,what a joke ,like i said i had the time to trade and learn and did a course on trading that cost me heeps of cash ,and going on blogs and seeking information my bible is babypips.com and me back testing back years found the secret on gold mmmm.Forex is the only internet buzz that i have made money all the others i have tried failed and cost me thousands made nothing only the forex.
This is why so many that start forex fail in the first 2 months it takes alot of work to find the SECRET of trading.
I now do it on my own and check my news and my PA with a exponetial 50 EMA and a 150 EMA ,with a stochastic Indicator So Please tell all those guys that advertise LEARN TO TRADE IN 3 STEPS Tell the Damn truth there is noway in hell you can trade in 3 steps they should all be shut down .mmmmmmmmmmmmm
On the part regarding EA, fair enough regarding the chess analogy, but as you have pointed out as well, the market is an evolving market which would naturally require an EA with an evolving algorithim…no ea with such an algorithim exists today. So that means that the trader would have to depend on the developer to update the ea with software patches…and the reason it goes belly up is on account of the fact that only a few ea developers take the time to patch up their codes.
As regards lagging indicators, all said and done, Indicators do lag, irrespective of whatever vanillafied version the trader opts for…but the ref to omens and premonitions did make me smile…lol
You must know how they all fit together in the big puzzle. Trading an MA cross by itself is very foolish and is the sign of a beginner. Buying a Expert adviser system for $197 and hoping to become a millionaire is even more insane!
Yes you right this is one puzzle that is huge and very very difficult i am almost there though but one piece of the puzzle can destroy your account, so learn and be careful my mate trust me, take care over and out to Monday