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Why it is possible to predict price movement?

Excellent posts so far, CJ.

I fully agree about seeing price for what it really is. Too many cooks spoilt the broth. Likewise, too many indicators screw our mind.

Personally, I trade by observing how price reacts to critical s&r levels. And price's reaction to these levels give me a good idea to go long/short. Insofar as support/resistance holds, it increases my probability of win.

I'm looking forward to what you have to say about how you see price Keep going!
Quoting Captain Jack
It may, but if I make a mistake in plotting price, I will know quickly as PA will not follow my "map" and I close it out quickly. If I have plotted PA correctly, there is little chance of price going against my trade. When I do use a stop, I will place it 10-20 pips above or below the last swing high or low, but I monitor the trades closely. So far, my biggest loss has been to the crooks at PFGBest, who stole the funds of many traders, and not by a bad trade.

CJ
Hello, your EURO/AUD trade obviously doesn't go according to plan.
Quoting Mike Haran
Sometimes it is possible to predict price movement to the pip, but only sometimes. Although there are traders on this community that can and do predict price levels, they are not always able to do it under all circumstances.

Understanding why and when price becomes predictible is an interesting topic. A better understanding of when a market might turn will allow a better estimation of price. Here I have shown a low to low swing on the eurusd on the weekly chart, you can see that the low to low swing was perfectly timed on an 84 week basis. Now...
In your second graph, you've drawn the lower channel line below a price swing low, then marked up a pointer to the price low and proclaimed that the trendline "works"!

You could only have drawn the trendline after the price swing low was already formed.

I see this over and over again in these forums.
Quoting kk007
This sounds a simple question, but it is not indeed. There are a lot of trading methods claim working. Nevertheless, I wonder in general what logic these methods based on in predicting price movement.

Can anyone give me a good answer?

Thanks,
kk007
I haven't read through his thread so forgive any repetition in this post but my guess is that a lot of people have given you the old "you don't need to predict price, just react" rhetoric. Which I guess I agree with to some extent.

But what you really want to know is... "How or why is it possible to profit in the market". i.e; What makes the market "non random" and how can I capitalize on this.

Sentiment breeds buying and selling habits. When that sentiment changes different buying and selling preferences will be present and the market will change to represent this. There are ALWAYS 2 sides to a coin. There will ALWAYS be buyers AND sellers present.

Example... Boom times, market hits a solid uptrend, it's not so hard to buy dips in such times, as long as the underlying security remains valuable and preferable to it's failing counterparts people will keep buying it, preferring it to something else.

If that sentiment reverses we see the other side of the sword, the double edge sword. What was once "hot" is now "not" and it's not so hard to sell rallies on an overvalued security.

If the sentiment is largely unknown, much like the uncertainty surrounding the past year and more then what we get is higher lows and lower highs at the same time. Representing the disinterest in commitment or risk to one side or the other.

In between the peaks and vallies you have profit taking, scalping, hedging, central bank intervention, shake outs, shake ins, commercial noise and all that's in between and you end up with a random walk, confined though by a defined path in which clever people can actually take advantage of.

Some people say price follows a random walk. I tend to agree, I would relate it to a drunken man who walks to his letter box everyday. In order to profit you can determine 2 things

1) The drunken man will walk out his front door (People need the markets)

2) The drunken man will venture to his letterbox. (As a result price will go somewhere)

Now those 2 things are easy to determine. What's not easy to determine is the actual steps he will take from A - B. Some days he may be "more drunk" than others and he may stumble off the normal path. Other days not so much and he may walk in a more straightened line to the letter box.

Some days the guy might be so wasted he passes out before he gets there only to wake up later and keep going.

As system traders and profit seekers we always wish this man to be sober and walk straight to the letter box (i.e our predictions to be correct with no BS shake outs fake outs, market noise, stop hunts, games).

Unfortunately our man is usually drunk and hence follows a random walk.

But WHY then is it possible to predict price movement?

Basically because the postman comes everyday and people need their mail.

Obviously if you could consistently predict the mans steps you have found the holy grail.
Time hides Nothing
Quoting CindyXXXX
I haven't read through his thread so forgive any repetition in this post but my guess is that a lot of people have given you the old "you don't need to predict price, just react" rhetoric. Which I guess I agree with to some extent.

But what you really want to know is... "How or why is it possible to profit in the market". i.e; What makes the market "non random" and how can I capitalize on this.

Sentiment breeds buying and selling habits. When that sentiment changes different buying and selling preferences will be present and the market will...

tend to agree somwhat,but would add,depending upon which path he starts from ,concidering also he has no memory of previous routes taken,we have gained valuable information as it now iliminates various other possible routes,even in this random walk home.as he walks more ,more routes become possible but again eliminate previous possible routes,from this information we have started to narrow down his possibilities,

not sure that makes perfect sense but cant quite put it into words
  • Post #146
  • Quote
  • Edited Jul 20, 2012 12:24am Jul 19, 2012 11:51pm | Edited Jul 20, 2012 12:24am
Quoting diceman555
tend to agree somwhat,but would add,depending upon which path he starts from ,concidering also he has no memory of previous routes taken,we have gained valuable information as it now iliminates various other possible routes,even in this random walk home.as he walks more ,more routes become possible but again eliminate previous possible routes,from this information we have started to narrow down his possibilities,

not sure that makes perfect sense but cant quite put it into words
lol yeah I really shouldn't drink... It sounded better in my head at the time, but I too struggled to explain what I was trying to say.

The main point I think is that an underlying current will always exist, a momentum, that will push even noise in it's direction. Successful trading (something I'm still trying to master) for me is to find that engine, the momentum source. The rest is timing.
Time hides Nothing
Quoting Captain Jack
Price can and is "predicted" and "predicted" accurately. Without any lines, indicators, S/R levels, fibo levels, moving averages, volume indicators or any other "dirt" that obscures your vision of price. Look beyond what lies on your screen and view price because price is your guide. It is all that is required.

All systems and EA's work some of the time, but none work all of the time. Very few work "most" of the time and most work seldom of the time. The reason for this is because they are programed to look for certain conditions...
Well then ,
Let me be the first to say " You are going to be the World's First Trillionaire " .. It's only logical ....Carlos slim $69 billion should be looking like 69 cents to You Pretty soon..lol
  • Post #148
  • Quote
  • Edited Jul 25, 2012 6:51am Jul 24, 2012 1:14pm | Edited Jul 25, 2012 6:51am
Always comes down to that Question - If you can Predict Price on a regular basis , How come you are not a Gazillionaire ? lol


Being Trying out some other ways to Predict Price , and still can't Figure it out..
Here's my Prediction for GBPUSD . Use at your own risk ...

1.55478 , 1.55520, 1.5561, 1.55758, 1.55697, 1.55543, 1.55775...

Update :

1.55271
1.55407
1.55031
1.54988
1.55148
1.55206
1.55248
1.55282
1.55517

Will Close Trades @ 1.555's ..........

I opened up a Trade explorer to test it , under water at the moment.........
Attached Image
. ...1.555's ....Trades Closed ..
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Quoting taomql4
. ...1.555's ....Trades Closed ..
And what did you conclude from this experiment? That you can predict price or that it is best to be on the right side of the trade when Draghi vows to save the Eurozone?
Nothing worth having is easy.
  • Post #151
  • Quote
  • Edited at 10:27am Jul 27, 2012 8:48am | Edited at 10:27am
Gu
1.5659
1.5645
1.5683
1.5693
1.5671
1.5668
1.5645

Update :

It's a friday - so I don't know If we are going to see .5645's , but I 'll close Trades @ 1.566's
Attached Image
when bernanke talks market moves ..... I only trade when he talks .....because market start moving around 50 points
let the chart to be your chauffeur ... -Forexmnstr-
Quoting taomql4
Gu
1.5659
1.5645
1.5683
1.5693
1.5671
1.5668
1.5645

Update :

It's a friday - so I don't know If we are going to see .5645's , but I 'll close Trades @ 1.566's
- Still working on the darn thing .. I think the low was @ 1.5671 not 1.5668 . I'll continue , maybe early updates might cut down on the mistakes ..
Quoting taomql4
- Still working on the darn thing .. I think the low was @ 1.5671 not 1.5668 . I'll continue , maybe early updates might cut down on the mistakes ..
Spoke too soon - Turns out Projections are correct @1.56653, too bad ship has sailed on that Trade..
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Quoting Captain Jack
Those accounts are like any others, they show past trades, which really have little use to most. I prefer to post charts with "live" trades as I enter them and indicate on those charts what I expect PA to do.

When I retired, I had a large lump sum pension as well as a 401K that I rolled over into a self directed IRA. These are the funds I use to establish my trading accounts. I tend to trade large lot sizes and do not use stops most of the time. Like my opinions on price, my opinions on risk management differ from the norm as well. But you can...
Personally, the answer to your question in over 4 years of trading, is never. Certainly not in an inproper way anyway. i have used Alapari and Oanda US and then Europe during this time and have never once had price clearly manipulted by the broker that does not mirror the three other platforms that I run in demo (to verify the cleanliness of the feed i'm trading with.

Maybe there are brokers who do indeed do this but I really shouldn't think any of the larger retail brokers would take the risk. All I would do is screenshot all the other feeds, show them how it fails to mirror them and then demand my account be refunded and then piss off. it may cost me one trade at 1% risk but that would be it. I could live with that.

Trading without a stop is a personal choice. certainly not one i'm comfortable with, I like to know my risk but hey man, if it's working for you to trade without one and you're making epic returns, keep on keeping on
bit late in the day-
Working on my crystal ball is driving bats ..lol
BTW , it has nothing to do with Order Flow ..

1.55221 - current low@ 1.5497
1.55297
1.55375
1.55476
1.55641
Attached Image
Now , Watching my order flow chart - The Prediction Kinda makes sense ..
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I don't think it is possible to predict... look at EU today... I mean how many times have you seen such a massive move up and then bang the bottom falls out?

The penny has finally dropped for me! When you are wrong, you are wrong, admit defeat and move on and look for next opportunity.

Keep losses small and let the winners ride... stress free trading for me!

Happy Pipping.
  • Post #159
  • Quote
  • Edited at 4:49pm Aug 5, 2012 4:38pm | Edited at 4:49pm
GU ...Uptrend ..

1.56089
1.56002
1.56036
1.56443
1.56535
1.56270 -


..Might go to 1.57000
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Click to Enlarge Name: intraday2-map.gif Size: 21 KB
Quoting kk007
This sounds a simple question, but it is not indeed. There are a lot of trading methods claim working. Nevertheless, I wonder in general what logic these methods based on in predicting price movement.

Can anyone give me a good answer?

Thanks,
kk007
Actually, it's not.
however, increasing the account value is possible.
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