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Why do mentors teach price action, but they can't trade it themselves to make money?

 

If it worked they would be billionaires!

 

http://www.trade2win.com/boards/foyer/165180-compounding-billionaires-t2w.html

 

https://priceactionvolmanjames16.wordpress.com/those-who-can-do-those-who-can-t-teach/

 

https://www.elitetrader.com/et/threads/al-brooks-al-crooks-charlatan.294067/page-6

 

Does George Sorros or Warren Buffet trade price action?Why are these gurus wasting other people's time, when this type of trading does not work?

 

https://www.elitetrader.com/et/threads/do-trading-education-scammers-99-99-of-the-industry-ever-feel-guilty.312818/

 

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Oilfxpro, no two traders will analyse every single piece of price action in exactly the same way. This is why a lot of traders find the whole idea of price action so difficult to understand and apply.

 

Traders who use price action keep things very simple when trading. They are sort of technical traders who rely on technical analysis but they do not rely on the normal indicators that would point them in the direction of the trade. Price action traders would rely on price movement, chart patterns, volume amongst other things to establish where or not to enter a trade. You could call it a very simple way of trading but I am not suggesting it is easier or better than any other method. The trader still needs to understand how the market works which it is trying to trade but in theory should work in most markets such as equities, commodities, etc. 

 

I would state that at times I am a bit of a price action trader. People may have heard of the term 'tape reader'. Jesse Livermore was a very famous one. Of course he lost money but he also made money. Reminiscences of a Stock Operator is an excellent book to read to familiarise with his story if you do not know about  it. Tape readers don't generally need charts though I tend to use them. Tape readers generally would not use any indicators or oscillators. I tend to use 20, 50 and 200 moving averages and oscillators. One must use a system that suits them. Their profits and the money they make and wealth they create will determine whether the strategy is a correct one or not and whether it is successful or not. I don't really care what other people do as we are all different. I would be a terrible value investor as I would have to buy something which I think is undervalued and hope that it goes up. Now I would have very little edge in this style as simply I would not have access to information that the likes of the 'big players' would have. In trend following based on historical price action (no guarantee that it will continue) but it increase my chances based on probability to hit a profitable trade. 

 

These mentors merely bring the real life stories and techniques to a niche audience around the world. They do not state they trade it themselves to make money as you have to be extremely disciplined.

 

If price action does not work and I am someone who uses price action then I must either extremely lucky or doing something right. I am certainly not a billionaire but I have been relatively successful using such techniques. I am no super professional expert either but I can certainly advise that if used properly based on your personality, with a sound trading plan, strong risk management, strict set of rules that you must follow, always knowing your exit before you enter the trade, amongst many other things then profits can be achieved. It is all relative to the amount of time you have.

 

Value investing works and many have made millions if not billions using it. I have no issues with any different trading or investing styles and have respect for each of them as they all have a place. I respect all the strategies out there and there are many.

 

I am a firm believer in price action and frankly who cares if these so called mentors (marketing people) do not trade and make billions. It really is not important and does not matter. The most important thing to remember is to adopt a trading style that suits your mentality, time horizon, aim and objectives, etc. There is a place for price action traders and there are many successful ones who have made millions and billions. The mentors are just someone who can write about them, put it in a book and sell them to make money and courses. No one really cares about the Michael Covel's of this world.

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Thanks trend follower

 

The successful speculators that I have read about Soros  and Buffet .traded fundamentals.I have yet to read about successful wealthy price action traders, any names ?

 

When traders apply price action, they are betting they know what is going to happen next, Mark  Douglas philosophy' which I agree with, contradicts the price action trading beliefs.These are

 

 Trade free of expectations of being right or wrong.(price action trade requires trader to believe he is right  abou a trade).He is relying on reading price action

 

. Beleive in uncertanity (The market can do anything).Once you enter a price action trade , if you are wrong ,it is psychologically impossible to cut your losses.Why should you take a loss, if price action works

 

 

. Be careful what you project into the future because nothing has got the potential to create more misery and unhappiness than unfulfilled expectations.When price action breaks down, it is difficult to exit at a loss.

 

Sometimes price action works, in your case you use moving averages, moving averages are smoothed out price action, so  it could be you are trading  the price action of the moving averages and not price action candles.

 

If one understands trading psychology,  price action and human mindset are not compatible.It can only lead to high levels of stress. 

Trading price action candles arouses high levels of stress and emotions  along with a lot of psychological issues.This  is why places which market price  action education, don't have psychology sections..It makes it easier  to market the educational price action courses.

 

 

In the absence of evidence of successful price action traders, I have to assume there are no successful billionaires of price action trading .I am waiting for your evidence.

 

How do you know you have no cognitive biases in your beliefs about you trading raw price action and not moving average price action?

 

 

 

 

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Oilfxpro wrote,  

When traders apply price action, they are betting they know what is going to happen next, Mark  Douglas philosophy' which I agree with, contradicts the price action trading beliefs.These are

 

Everyone is betting on what is going to happen next. So what!

 

 Trade free of expectations of being right or wrong.(price action trade requires trader to believe he is right  abou a trade).He is relying on reading price action

 

If market shows you are wrong just get out!

 

. Beleive in uncertanity (The market can do anything).Once you enter a price action trade , if you are wrong ,it is psychologically impossible to cut your losses.Why should you take a loss, if price action works

 

If market shows you are wrong just get out!

 

 

Be careful what you project into the future because nothing has got the potential to create more misery and unhappiness than unfulfilled expectations.When price action breaks down, it is difficult to exit at a loss.

 

If market shows you are wrong just get out!

 

Sometimes price action works, in your case you use moving averages, moving averages are smoothed out price action, so  it could be you are trading  the price action of the moving averages and not price action candles.

 

Moving averages just show direction and momentum!

 

If one understands trading psychology,  price action and human mindset are not compatible.It can only lead to high levels of stress. 

Trading price action candles arouses high levels of stress and emotions  along with a lot of psychological issues.This  is why places which market price  action education, don't have psychology sections..It makes it easier  to market the educational price action courses.

 

Have faith in your (back tested) strategy, just pull the trigger and ask questions latter!

 

 

In the absence of evidence of successful price action traders, I have to assume there are no successful billionaires of price action trading .I am waiting for your evidence.

 

No one is obliged to provide you with anything, you would just say it was photo-shopped anyway! If it works it works.

 

How do you know you have no cognitive biases in your beliefs about you trading raw price action and not moving average price action?

 

Repeat, if it works it works!

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Everyone is betting on what is going to happen next. So what!

 

This is incorrect statement.There are probabilistic traders who don't trade on the outcome of the next trade.These traders trade probabilities like a casino, the casino does not know which punter is going win  next i.e what is going to happen next.

 

Developing a Probability Based Mindset for Trading

 

 

If market shows you are wrong just get out!

This is a lack of understanding of practical human behavior during trading.First the guru says "price action works , but if it does not work get out".So why should he believe it works, other than the charlatans who sold the books and courses, if it worked there would be a software , so everybody would use the software to place automated price action trades.In the meantime there is none and it does not work , until proven otherwise.

 

If you believe price action works, why take a loss ?It should work!

 

 

A  study by finance professors at Massey University in New Zealand examined more than 5,000 technical trading rules to see if they added value. The authors found "no evidence that the profits to the technical trading rules we consider are greater than those that might be expected due to random data variation."

 

Is Technical Analysis a Waste of Time?

https://www.cbsnews.com/news/is-technical-analysis-a-waste-of-time/

 

If market shows you are wrong just get out!

 

 

 

Cutting losses does not work, when a trader is told that price action trades he put on work!

 

If market shows you are wrong just get out!

 

 

Moving averages just show direction and momentum!

 

So the moving averages are making profit not the price action!

 

 

 

Have faith in your (back tested) strategy, just pull the trigger and ask questions latter!

 

Use heads or tails coin toss instead of price action 

 

 

 

No one is obliged to provide you with anything, you would just say it was photo-shopped anyway! If it works it works.

 

The books written are evidence?The price action courses are evidence.The gurus not trading are evidence.People not using it to make money, but selling courses and books is evidence.

 

Price action is the holy grail , that is why you can get it all free by doing google searches and you tube videos.

If it was worth anything with an edge , most people would not bother selling it, they would be using it.

 

https://priceactionvolmanjames16.wordpress.com/

 

 

 

Repeat, if it works it works!

 

If it works you would not need to take losses and there would be a automated software for sale

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Not everybody trades on the outcome of what is going to happen next.

 

The Psychology of the Winning Trader Think in Probabilities

 

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Correct, it is all about probabilities. Your tested strategy tells you what is the most probable next event and you back it, when the market tells you are wrong just get out, the market will always be bigger than you and the market does not have to act rationally. Trying to rationalise the market is psychologically damaging.

 

Many can't cope with being wrong as often as happens in trading. Most everyone have come from a career where they must be right to a very high percentage or they lose their job. Successful traders talk about being right 40 - 50% of the time, but with a risk reward ratio of 1:2 or more then that is profitable, that's how much you need to be right, which takes most people some time to get use to.

 

Price action reveals patterns that are often repeated. Thomas Bulkowski has published a mass of statistics to prove this point, the positive probabilities of a tested strategy (strike rate against risk reward ratio) is all there is. Psychology should not enter the equation  and some go to great lengths to negate it, even to the point of basing their whole strategy around avoiding it. 

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Oilfxpro, if the price action changes and thus the trend reverses then it is very simple. My trailing stop / stop loss would be triggered as I am following a set of rules (knowing what my exit is before I enter the trade) and attempt to minimise my losses. This will take any emotion out of the trade.

 

I try and keep things very simple. Sometimes there is no need to complicate things. If I have a long position on a trade mark then I will add as the price increases (pyramid upwards rather than adding when price declines). I have done nothing clever or complicated and have let the trend do the work for me. Human psychology is to buy when something which comes down in price and investors tend to average down thinking they are getting better value. In terms of balance of probability and chance then I would rather have stronger odds by buying something actually going up in value than something that is going down in value. However, I totally respect different strategies and no one strategy is 100% correct or foolproof.

 

In terms of some of the best trend following traders then try looking at the following but remember all traders will have drawdowns and that is something that every trader has to accept, embrace and not get bogged down on.

 

Ed Seykota

Bill Dunn

John W Henry

Bruce Kovner

Michael Marcus

David Harding

 

They will all have lost money in certain years so do not get fixated with that. These guys have been very successful in trend following. However, it does not mean that this is the golden answer and everyone must trend follow to successful make big profits. Different strategies will suit different people depending on a lot of variable factors. 

 

 

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Caseynotes, I agree probabilities play an important role. It is about adopting a strategy which can increase your chances of successful and profitable trades. 

 

I like to invest in high risk capital growth investments. Trends change / reverse and trend following or price action cannot be 100% correct. One must understand that.

 

Therefore if a trader makes 10 trades and on 7 of them he loses and only on 3 of them he makes a profit then this could be viewed as a 30% success rate and 70% failure rate.

 

Now if in the 3 trades that he was successful on he made more profit (much more) than the 7 he lost on then that is the key performance indicator that is the most important. In trend following it is about cutting your losses quickly and minimising losses. It is also about letting your winners run and not selling too early and maximising your profit.

 

In this example the trader would have been wrong 7 times of of 10 but who cares if his 3 trades make him enough profit to cover all the losses and much, much more. I accept this is very difficult to digest for some but I have been doing this for many years and I am sure (not been counting) but I have had far more losing trades than winning ones. However I am still here stronger than ever and it is down to having big winners that cover all the losses and a lot, lot, lot more.

 

The secret to this success is strong risk management and discipline in following some strict rules. There is nothing clever, complex or special that I do.

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The secret to this success is strong risk management and discipline in following some strict rules. There is nothing clever, complex or special that I do.

 

The secret of successful traders is, they know their markets, risk management is their key skill, like casino which will not take on large bets eg you go and place £10m on a single bet

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Casey 

 

I don't recommend any normal human to agree with the following

 

Psychology should not enter the equation  and some go to great lengths to negate it, even to the point of basing their whole strategy around avoiding it. 

 

These are the sort of statements coming out of  the industry,  we are all humans and we are emotional beings.No  statements in words, from people in the industry,  will ever change our physiology.

 

Humans are emotional creatures

 

http://blog.davidlawrencepreston.co.uk/2016/08/humans-are-emotional-creatures/

 

https://forexfactory2017.wordpress.com/trading-psychology-videos/

 

 

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Casey

 

There is my new photo :smileyhappy:

 

No heart no emotions no psychology anymore

 

new picture.jpg

 

Psychology is 100% of trading success. This is because the human with a mind is going to execute the trades  and a trader’s brain command center makes all the trading decisions.The brain’s command center can shut down due to stress responses , in the middle of a trade. Emotions can override rational trading rules, systems and methods .

 

https://forexfactory2017.wordpress.com/stresss/

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,  yes, that is precisely my point with regards the win/lose strike rate verses the risk reward ratio. , a tested and trusted strategy removes the fear (psychology). The 'some' I was referring to in the last sentence of my previous post was you and your options strategy (that removes the psychology factor from trading as you have inferred in the past) but most don't need to go that far because they know 'psychology should not enter the equation'.

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Oilfxpro, your discussions lead to a classic discretionary vs systematic trading argument.

 

There are pros and cons for both. There is a lot of literature out there on both which I won't repeat.

 

Hedge Funds were extremely successful and some of them still are using systematic trading with algorithmic 'black box' to assist in extremely quick speed execution on buying and selling. This helps to take emotion out of the trade. It helps from your 'psychology' perspective.

 

The issues you have highlighted would apply more to discretionary traders. That is where someone mindset, mentality, personality, education, upbringing, environment, background, experience all and much more come into play. It is extremely complex and not every trader even a successful one could even begin to contemplate such difficult matters.

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Casey

 

a tested and trusted strategy removes the fear (psychology)

 

When markets change, the system does not perform, losses incur and other contrary events occur, the mind reverts to default programming.Default programming is ancestral programming.

 

 

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Yes, you are both right  & ,  you can choose a systematic approach as does OFP or a discretionary approach as does TF. It is wrong to suggest though that either approach must fail.

 

The problem with a systematic approach is that the system needs to be made flexible enough to cope with changing market conditions or to simply recognise change and stop trading till the market changes back, but then that becomes discretionary.

 

The problem with discretionary is the absolute requirement to precisely define risk before entering a trade and be willing to accept that risk and so remove fear. Fortunately the risk is easily defined, it is the stop loss amount on entry and during the trade and the stop level should be obvious on the chart in that if that level is breached you have been proved wrong in your assessment.

 

The market will do this regularly but that is not a problem if you have tested your strategy over many trades and know it to be profitable, this applies to both types of strategy. And you must do your own testing and not rely on others to do it for you as we can never all execute a strategy exactly the same. There is a degree of discretion in any system.

 

 

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Here is one to enjoy!!:smileylol:

 

Nial fuller is know as one of the Gurus of price action.He is now moving the the Warren Buffet buy the Dip strategy.

 

http://www.learntotradethemarket.com/forex-articles/profitable-traders-nothing-99-percent-time

 

Profitable Traders Do Nothing 99% Of the Time

 

:smileylol:

 

http://www.learntotradethemarket.com/price-action-trading-forex

 

Profitable Buffet trading strategy BUY THE DIP

 

https://community.ig.com/t5/General-Trading-Strategy/Profitable-Buffet-trading-strategy-BUY-THE-DIP/m-p/16794#M797

 

I have nothing against people using this strategy, to sell education on this strategy and write books about it.I do not like people who waste other people's time and lives with snake oil.

 

amy.gif

 

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I've clicked thumbs up on all this thread because it is so entertaining.

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Price action trading and Buy The Failed Dip (BTFD) are not mutually exclusive. BTFD is the oldest and most used strategy since the creation of markets. BTFD is a trend following strategy.

 

Nial Fuller won a million dollar prize in a trading competition last year, that was completely open and transparent, using price action principles. I posted on it last year, you can read about it here;

 

https://community.ig.com/t5/General-Trading-Strategy/Million-USD-Competition-Winner/m-p/5194#M403

 

 

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Thanks genius  I have added this to my favourites box and will read later.

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Where is buy the failed dip strategy?

 

It is a reversal of failed dip or trend retracement strategy.

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Good pick  I read about this guy many years ago - he used to work for Sabre Fund Management. He's the closest thing the UK has got to what you read about in the book "Market Wizzards". All his interviews make very good reading. If only the UK had more like him!!!!

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121, That's right. Not many people know that he was a futures trader at Sabre Fund Management in the 80's I believe. I think from memory he was only there for a couple of years but he certainly made a very strong impression. He is very well educated and I believe he studied Science at Cambridge. He founded the AHL at Man Group before setting up Winton Capital Management which has been going for around 20 years now. He is a strong advocate of quantitiative trading.

 

David Harding is a billionaire and his wealth has been created from trend following using a quantitative approach. He was a successful trader. He used a combination of high level mathematics and science. 

 

Not everyone can replicate what he has done because not only is he a very intelligence and smart man but his education plus experience makes him unique in the UK and most of the world. This is why people like Covel can only write about them and share his story rather than replicate. The odds are against anyone even trying to copy him. He has got stronger over the years because he has -re-invested the wealth he has created in employing the smartest brains around and using the latest, fastest and best technology available. 

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Agree, yes he did all those things and keeps pushing his work up another degree. He was just one of those geeks who was in the right place at the right time doing the right thing. There's not much he hasn't got covered, or, can't access.

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Casey

 

Nial Fuller won a million dollar prize in a trading competition last year, that was completely open and transparent, using price action principles. I posted on it last year, you can read about it here;

 

Where are the audited certified financial account to prove this ?Give me the excuses.

 

Who was part of this marketing trick, to dupe suckers into opening a live account with Axit?

 

Why it's about to get harder to post fake reviews online

http://www.telegraph.co.uk/business/2017/07/31/get-harder-post-fake-online-reviews/

 

Did he place the trades after the event and place hindsight results?Were other competitors allowed to place results after the competition?

 

 

Anton Kreil Annihilates Retail Brokers and "Trading Educators"

How many other fake traders were involved in this competition?

 

If Neil Fuller could make 350% a year , he would not enter any such competition,  I would be surprised if he made 10%  or 30 pips.

 

This is how you catch the fake gurus

 

http://www.trade2win.com/boards/foyer/165180-compounding-billionaires-t2w.html#post2056584

 

Most FX traders cant even make 30pips a month (or year) let alone per day. 

But lets consider a profitable trader who makes a very modest 30pips a week:

 

When is I G introducing such competition?

 

The winning trader, Nial Fuller, who is a renowned trading author and professional trader, ended the competition with an impressive 369% return on investment and collects the first prize of a USD $1million trading account with AxiSelect.

 

Anton Kreil Annihilates Retail Brokers and "Trading Educators"

 

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