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Indicators Or Price Action? What's Best??

  • #1
  • First Post: Edited Jul 29, 2008 5:03pm Jul 28, 2008 1:50am | Edited Jul 29, 2008 5:03pm
If the mods want to move this thread that's fine but I felt it belongs here since it deals with trading forex.

This thread is not to debate which is best, but to prove which is best.
So, let's end the debate. I am hereby issuing a challenge to all traders. Between now and the last trading day of August trade whatever method you like and let's see who does the best. It is time to put up or shut up. Your trading will be graded on the following parameters:

1. Percentage of winning trades.
2. Average pips gained per trade.
3. Percentage of account growth.

I am going to trade a LIVE account in this competition. I have an account with FXSolutions that has about $2,800 in it right now(2798.77 to be exact). I use this account for testing and refining my strategies but for the next month I will trade it for this competition.

You may trade live or demo. There is one rule for demo traders. If you trade demo you must limit your risk to 2% of the account value. This is to eliminate some lucky people who will risk most of the account and run it up quickly, then sit on it for the rest of the month. For LIVE account traders I would hope you don't risk most of your account on each trade.


So, who is up for the challenge?? Sign up below and let us know your preferred method of trading. Indicators or Price Action.
  • #2
  • Jul 28, 2008 2:01am Jul 28, 2008 2:01am
In a bubble where there's irrational excuberance tech is where its at. The most skilled trader will go by price action, but this seems to only work at the current moment.
  • #3
  • Jul 29, 2008 4:34pm Jul 29, 2008 4:34pm
Why not Price action hand in hand with indicators Magnumfreak?

I trade with price action, but I also trade using a method devised from VWB to attain solid areas.

If I were to agree to a competition, would you like for me to trade with solely a system and solely price action?
Are timeframes an issue? What timeframes would you be trading on?

August definitely won't be the best month as I'm turning 21 and going on vacation for half of the month however, but I could accomodate for a little while between the 11th and the 25th. I understand that is only 2 weeks, which leaves little to no time at all.

Tell me what you think and if you would like to have a postponed contest just for fun.

Also, you noted that if someone were demo trading, they can't risk more than 2% of their account. Why is there a difference for the live accounts? I could grab some throw away money (around 500 bucks) and just thrash it around until I hit a home run or lose it by using crazy leveraging.

Get back to me. In the meantime, have a great day man!
I dream, therefore I become.
  • #4
  • Jul 29, 2008 5:01pm Jul 29, 2008 5:01pm
So, lets just have fun with this. Instead of one or the other, lets just trade however you like. I started a journal in the journal section and I will list my account balances there and here if this thread gets going.

Trade whatever system you want, whatever timeframe you like. Just give a general description of how you trade. If you want to just post once with your account statement that's fine also. August can be a boring month for trading (sometimes just depends on the markets) so let's try to have some fun with it.

For me if I am in front of the computer, I will be scalping on the 5 min chart while I wait for the 1 hour chart to set up for a swing trade. I trade with 2 custom indicators that I developed along with monthly and yearly pivots. I do not use daily or weekly pivots as I find my indicators will point out support and resistance points without them. Keeps the charts very uncluttered.
  • #5
  • Jul 29, 2008 5:27pm Jul 29, 2008 5:27pm
Quoting magnumfreak
So, lets just have fun with this. Instead of one or the other, lets just trade however you like. I started a journal in the journal section and I will list my account balances there and here if this thread gets going.

Trade whatever system you want, whatever timeframe you like. Just give a general description of how you trade. If you want to just post once with your account statement that's fine also. August can be a boring month for trading (sometimes just depends on the markets) so let's try to have some fun with it.

For me if I am in front of the computer, I will be scalping on the 5 min chart while I wait for the 1 hour chart to set up for a swing trade. I trade with 2 custom indicators that I developed along with monthly and yearly pivots. I do not use daily or weekly pivots as I find my indicators will point out support and resistance points without them. Keeps the charts very uncluttered.

Ok, excellent! Like I said before, I won't be trading or on FF until the 11th and I'll be gone again on the 25th, so I will trade in between that time area and hopefully we could compare notes for that period.

Here is how I trade: I trade higher timeframes such as the weekly, daily, and 4 hour timeframes. For the purpose of the competition, I will also trade the hourlies using the DIBS method and a variation of Vegas when I am at the computer- I will NOT however let this eat up my life and lifestyle.

I trade using price action for the most part at solid areas of support and resistance. That's just peachy, because it looks like we'll be seeing a ranging month ahead as always in August. lol

As for using one of Vegas' systems, I plot out a few exponential moving averages (EMAs). I'm not going to go into a full amount of detail, as I will only be using the 24 and 28 EMAs. You'll notice that price bounces quite a bit from those if you plot them out on a chart. I will use that and price action to initiate trades and exits are discretionary. If I need a more detailed explanation, I'll be back on tonight around 1 AM to discuss.

Have a great night everyone!
I dream, therefore I become.
  • #6
  • Jul 29, 2008 5:50pm Jul 29, 2008 5:50pm
Quoting magnumfreak
If the mods want to move this thread that's fine but I felt it belongs here since it deals with trading forex.

This thread is not to debate which is best, but to prove which is best.
So, let's end the debate. I am hereby issuing a challenge to all traders. Between now and the last trading day of August trade whatever method you like and let's see who does the best. It is time to put up or shut up. Your trading will be graded on the following parameters:

1. Percentage of winning trades.
2. Average pips gained per trade.
3. Percentage of account growth.

I am going to trade a LIVE account in this competition. I have an account with FXSolutions that has about $2,800 in it right now(2798.77 to be exact). I use this account for testing and refining my strategies but for the next month I will trade it for this competition.

You may trade live or demo. There is one rule for demo traders. If you trade demo you must limit your risk to 2% of the account value. This is to eliminate some lucky people who will risk most of the account and run it up quickly, then sit on it for the rest of the month. For LIVE account traders I would hope you don't risk most of your account on each trade.


So, who is up for the challenge?? Sign up below and let us know your preferred method of trading. Indicators or Price Action.

This seems like a cool idea, so how would it work, just people posting their trades and their account details?
  • #7
  • Jul 29, 2008 5:55pm Jul 29, 2008 5:55pm
Sure, this might be fun, I also just started a journal, and am funding a new account to trade a strategy I've been testing the past couple of months. I'm just starting with $1,000. A little low for proper MM, but enough to put the strategy to the test.

I don't trade a particular time frame, but refer to 1M - Weekly to get an overall view of trend, volatily within the trend, and rhythm. I rely more on price action than indicators, however I do keep two indicators on my chart (linear regression channels, and a custom ergodic/stochastic indicator). But my trading does not rely on indicators to generate signals, they're more just a frame of reference, to put PA in context. I use the LR channels in a similar way to VWB mentioned by mikew.

Basically it is a trend-following strategy, following an approach similar to FTI "Art of War", with a trading session usually lasting 1-6 hours. It does also work reasonably well in ranging markets, with shorter trades. I normally do not leave trades open when away from the computer, and have only been trading a few times per week, but may be able to squeeze in a bit more during August.

Ok, see you in the journal factory
  • #8
  • Jul 29, 2008 6:06pm Jul 29, 2008 6:06pm
Quoting onedrop
Sure, this might be fun, I also just started a journal, and am funding a new account to trade a strategy I've been testing the past couple of months. I'm just starting with $1,000. A little low for proper MM, but enough to put the strategy to the test.

I don't trade a particular time frame, but refer to 1M - Weekly to get an overall view of trend, volatily within the trend, and rhythm. I rely more on price action than indicators, however I do keep two indicators on my chart (linear regression channels, and a custom ergodic/stochastic indicator). But my trading does not rely on indicators to generate signals, they're more just a frame of reference, to put PA in context. I use the LR channels in a similar way to VWB mentioned by mikew.

Basically it is a trend-following strategy, following an approach similar to FTI "Art of War", with a trading session usually lasting 1-6 hours. It does also work reasonably well in ranging markets, with shorter trades. I normally do not leave trades open when away from the computer, and have only been trading a few times per week, but may be able to squeeze in a bit more during August.

Ok, see you in the journal factory
Excellent, best of luck to you in your testing and success onedrop!
I dream, therefore I become.
  • #9
  • Jul 29, 2008 6:16pm Jul 29, 2008 6:16pm
Quoting daanman3
This seems like a cool idea, so how would it work, just people posting their trades and their account details?
Yeah, basically. You don't have to list every trade. Maybe just describe a little bit about how you trade. Then just show the account statements around the 29th or more often if you want.

It doesn't matter if you are demo or live trading just keep it honest and trade the demo just like you would a live account.
  • #10
  • Jul 29, 2008 8:02pm Jul 29, 2008 8:02pm
Quoting magnumfreak
Yeah, basically. You don't have to list every trade. Maybe just describe a little bit about how you trade. Then just show the account statements around the 29th or more often if you want.

It doesn't matter if you are demo or live trading just keep it honest and trade the demo just like you would a live account.

My trading style is really best of both worlds. I use technical and fundamental analaysis in my trading. So I know what the interest rates and data is and also the ranges, waves and fib levels. There is a lot more that I do but basically I use both.

I started out with $1250 when I started trading currency, I made 50% percent profit of that in a week. But then I lost it and I went down to $700. Then I came back up to my initial investment. Right now I am around $1200. I learned a lot and now I am going to start to grow my account with proper mm.
  • #11
  • Jul 29, 2008 8:35pm Jul 29, 2008 8:35pm
Quoting magnumfreak
If the mods want to move this thread that's fine but I felt it belongs here since it deals with trading forex.

This thread is not to debate which is best, but to prove which is best.
So, let's end the debate. I am hereby issuing a challenge to all traders. Between now and the last trading day of August trade whatever method you like and let's see who does the best. It is time to put up or shut up. Your trading will be graded on the following parameters:

1. Percentage of winning trades.
2. Average pips gained per trade.
3. Percentage of account growth.

I am going to trade a LIVE account in this competition. I have an account with FXSolutions that has about $2,800 in it right now(2798.77 to be exact). I use this account for testing and refining my strategies but for the next month I will trade it for this competition.

You may trade live or demo. There is one rule for demo traders. If you trade demo you must limit your risk to 2% of the account value. This is to eliminate some lucky people who will risk most of the account and run it up quickly, then sit on it for the rest of the month. For LIVE account traders I would hope you don't risk most of your account on each trade.


So, who is up for the challenge?? Sign up below and let us know your preferred method of trading. Indicators or Price Action.
I have been in the Forex arena since around 2002, and since that time I have seen a wide variety of trading systems/styles fall in and out of vogue.

When I first began trading, price patters, trend lines, fib ratios, and candle patterns seemed to be what everyone was touting (some still are of course). After MT4 became popularized, trading indicators appeared to gain a stronger foothold since they were more easily testable. Then news trading was all the rage, followed by fundamental strategies (the carry trade and COT trading comes to mind). Now I see more and more traders talk about price action analysis and scalping. Perhaps that is the latest trading fad.

The truth is that all these things are simply tools for interpreting and analyzing price over time. There is nothing evil about indicators, and you are not superior if you trade without them. On the other hand, if you do utilize indicators, don't fool yourself into thinking that they will point the way to easy riches. If not careful, they can actually cloud your view of the market and make trading decisions more difficult or less accurate. All traders need to understand market dynamics and mass psychology.

My main point here is that the individual trader needs to have a fundamental understanding of the market place and of himself. Then he can approach trading in a manner that suits his needs as well as his personality. For some this will mean using only a naked chart, for others it will mean applying statistical measures of market data. Who knows, perhaps for some it will just mean opening up their morning copy of the Wall Street Journal. More than likely, it will be some combination of factors.

Good luck to all those who choose to participate in this challenge, but I doubt it will prove anything or settle any debates. Trading is more about the trader than it is the tools he uses. A skilled carpenter needs a good hammer, but an inexperienced craftsman usually just bends nails and breaks thumbs.

Happy trading,

Art
Visit my journal here.
  • #12
  • Jul 30, 2008 9:16am Jul 30, 2008 9:16am
Quoting Rosscub
Good luck to all those who choose to participate in this challenge, but I doubt it will prove anything or settle any debates. Trading is more about the trader than it is the tools he uses. A skilled carpenter needs a good hammer, but an inexperienced craftsman usually just bends nails and breaks thumbs.
I agree totally, and not out to prove anything, just have a little fun

I think every trader has to find his or her own style that works for them. Some folks have trouble with emotions or consistency so it can help to delegate decision making to indicator signals, other people find they trade better without them, or only use one or two as a minor crutch, etc. etc. Which is better, the answer will be different for every trader, their level of experience and comfort, and general disposition and personality.

All I know is I've bruised more thumbs in forex using indicator signals, EAs (I've coded dozens of em) and mechanical systems, and I do much better without them. After analyzing my trading last night, I removed one of the remaining indicators, and am just left with regression channels and PA. Better? Who knows, all I know is it works better for me.
  • #13
  • Jul 30, 2008 9:25am Jul 30, 2008 9:25am
Quoting onedrop
After analyzing my trading last night, I removed one of the remaining indicators, and am just left with regression channels and PA. Better? Who knows, all I know is it works better for me.

Onedrop,

That is the real test, if YOU can make money with your method. We've heard it before, you can take 1 system and 10 traders and you'll get 10 different sets of results. Why? Because there are internal factors that most traders either don't know about or they choose to ignore.

If you can consistantly make money, month after month, who cares if you use a naked chart, a dozen mathmatical indicators, or a ouija board. In the end, my main concern is MY equity curve.
Visit my journal here.
  • #14
  • Jul 30, 2008 4:08pm Jul 30, 2008 4:08pm
I've been trading for about 2 years and I first started by using all different kinds of indicators. I think the appearance of them is what attracted me first. It looked so professional! Anyway, I wasn't able to profit consistently using them, probably because I didn't have the patience (or intelligence) to figure them out and why they worked. I just bought and sold on crossovers.

I now use candlestick (bar) formations and support/resistance in my trading. My method is clearly stated in my journal. What attracted me to this is that I can understand to some extent why I would buy or sell, which makes me more confident in entering trades. Overall, I think that indicators or price action or whatever method is just another way of interpreting a chart. Some people can interpret it better with indicators, some can with the naked eye.
  • #15
  • Jul 30, 2008 4:13pm Jul 30, 2008 4:13pm
In gearing up for the month ahead to show Magnum that there are indeed some of us out there that do trade, I'll outline how I do things.

My trading is largely discretionary. I get an idea or a hunch and I'll look at a few certain broader indicators that I've tweaked that will either reinforce or disparage what I was thinking. Haven't gotten into the scalping aspect of things. I look at a broader chart (1w or 1d) and then line up the current chart position with coming news, and develop a few longer term plays in there. For instance, the dollar positive news this week. I saw a break on the top side of USD/JPY forming and the news would be the push to break it out, and then I decided, if I believe that strongly in this idea, I'll get into the trade here and just add to it at the original entry point.

I'll be doing this with a live account as well. My trading style and methods will probably unnerve some people, but guess what? Keep it to yourself. You'll see what I'm talking about when we're wrapping things up towards the end.
Never underestimate the powers of the Force.
  • #16
  • Jul 30, 2008 5:19pm Jul 30, 2008 5:19pm
I buy on the dips in a up trend and sell the rallies in a down trend. (swing trades)

Scalp or intra day trades when the market is over bought/sold conditions.

Whats my secret recipe? Stringent MM .

Saaedb
  • #17
  • Jul 31, 2008 10:05pm Jul 31, 2008 10:05pm
Technically for those who were waiting for the first of August to begin trading for the competition it is now the first of August.

Looking back in history August can be a great month for price movement or it can be flat as the Kansas plains here in the U.S. Let's hope that this is not one of those flat months.

Here's hoping you have a great month and I hope everyone has fun with it. Personally I like competitions like this as it pushes me to do better and to learn more.
  • #18
  • Aug 1, 2008 4:06pm Aug 1, 2008 4:06pm
I opened a demo account with Interbank on July 30 (2 days ago) for the competition and so far I've increased my account by around 10%. I never used more than 2% for each trade and used only support/resistance for my decisions. Here's my statement for the week.

Happy trading!
Attached Image
  • #19
  • Aug 1, 2008 4:53pm Aug 1, 2008 4:53pm
Quoting soltani
I opened a demo account with Interbank on July 30 (2 days ago) for the competition and so far I've increased my account by around 10%. I never used more than 2% for each trade and used only support/resistance for my decisions. Here's my statement for the week.

Happy trading!

If its a demo account, why dont you post your login and investor password here?
  • #20
  • Aug 1, 2008 4:53pm Aug 1, 2008 4:53pm
The bots that are running are down for now and they probably might never get positive. But I have high hopes for them .
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