People say systems don't work (only pure price action does)

Is this true? I've been trading a system that I've been profitable with for some time (on demo) before I move live should I learn to trade with pure price action?

Everyone says over time your method will fail unless you're using pure price action. EX) Support/Resistance, trendlines, candlesticsk. I guess my questions are

1) Can you trade long term with a system and be profitable
-Bolinger Bands, Moving Averages and stochastics
2) Are there any profitable traders that have been trading 3+ years profitably with the same strategy (not pure price action) but one that uses indicators as a main part of there strategY?

I've heard and read to many people saying any system will fail and only pure price action will work in the long run. I find this hard to believe because no matter what price has a 50% chance of going down and 50% chance going up. So wouldn't a system just be helping with probabilities like any other strategy (price action) I believe as long as you learn the pros and cons of your method and you keep trading it you will learn the flaws of your strategy and be able to profit with it for years to come?

Would love to hear from you guys that are profitiable, or know of anyone profitable! I want this to be a true discussion, I'm looking for straight up answers. No arguing please! Debating is fine.. getting pissed and ruining the thread is another story.

Can't wait to hear from ya!

PA is truer to the chart, and thus easier to accept it's legitimate for many.
As you say, indicators with >50% overall %win are just as fine.

I've never enjoyed dividing the chart into variables that indicators then identify. It's easier for me to interpret sub-, temporary patterns and then draw one or several TL's for the hold and next trade(s).



Oh, and no I'm not profitable. Am on demo simulator, have been for awhile.

A lot of people say indicators are bad because they are lagging? I Don't see a problem if they are lagging.. wouldn't that just be confirming the move is happening?

A moving average, which most lagging indicators are based on, takes x number of candles and expects the chart to act proportionally, depending on which indicator is used. I'd rather pick my own candles to consider with the types of patterns noted, as with drawing devices, especially TL's or similar.

With price action trading, you can give a chart to 10 experts and they will all draw a trendline in different areas? So I think the probabilities of it breaking are just as high as using "lagging" indicators. So far we have 1 for pure price action.

Do you think price action is the only way?

At one time, virtually everyone in the world believed the world was flat and that you would fall off the edge.

At one time, the vast majority of Germans believed that Adolph Hitler was good for Germany.

At one time, the vast majority of people believed the earth was the center of everything and that the sun orbited it.

At one time when I decided to sell everything I own and go live in Turkey, everyone I knew, except my mother, told me it was mistake and that I would regret it. Twenty-three years later I'm still living abroad and I've lived a life so far that people only dream about. Of all those people I knew then, I only miss my mom.

Really, how much more evidence does one need to finally understand not to listen to what the majority says? If the majority says "baaaa", then you should be barking.

We need little "LIKE" and "DISLIKE" buttons for posts.

That was a damn fine post.

Quality post here, just quality....

Systems works, of course they do.

But some times they do not work, and it is your job to find out, under which circumstances they work and under which they do not!

Some common reasons why systems do not work;

1. Trader change parametres and conditions.
2. Trader jump between systems.
3. Trader move stop or take profit to early, and not based on system rules.

System trading requires patience, discipline and liquidity.

Do not count on, that you can find a system which works under all trading conditions, they are non existing.

Understand the logic of the market. If you don't understand then why would you use indicators to tell you something you do not understand? If you do understand then you would know how to use indicators properly. But then you would probably not want to use indicators.

You have mentioned many points. Although, some of them may be true, most of them are half-truths, FF misinterpretations or simply trading myths.

1 " ... no matter what price has a 50% chance of going down and 50% chance going up"

This is not true. If trading were a probability game of 50 / 50 odds, things will be a lot easier. You would only need to adjust your r:r to anything above 1:1 and you will be profitable after a series of trades.

Traders usually forget to include 3 key variables in the equation: 1st the option of flat market (or staying aside), 2nd VOLATILITY. Because you can't exactly measure the range of each trade you can't determine the same expectation of a move. If this were true, prices will move in harmonic waves that exclude any option for trends. And 3rd and most importantly, you have limits when price goes against you (either by your stop or until your capital is gone) meaning you don't have the same odds as in an open end position.
50/50 is not true under any circumstances.

2. " ...Everyone says over time your method will fail unless you're using pure price action. EX) Support/Resistance, trendlines, candlesticsk."

Thats a trading myth. Actually most of successful intraday traders are HFT. Which is not you or me or anybody in FF but super fast algorithms...and you know how this supe math algos work? with everything except pure price action. EX) Support/Resistance, trendlines, candlesticsk.

You can be profitable using PA or TA. The question is not the tools but the results. And as you know the difficult part is consistency and in the profitable part not in how to read PA/use an indicator.

3. " can you trade long term with a system and be profitable
-Bolinger Bands, Moving Averages and stochastics"

That as half-truth. Yes, sure you can be profitable if you have find an statistical edge using those indicators. Usually that implies either a quantifiable way of analyzing your indies (it usually unique for you and your timeframe and instrument) or a subjective way gain by experience (or else) that make you " see" a trade, in other words you are a natural. (I doubt you will ever meet one of those in FF).

On the contrary, if you think you can plot a couple of stoch and MA and start trading whatever cross and be rich in a year (lots of traders around FF) ........... you are doomed ....you know what i mean.

4. Are there any profitable traders that have been trading 3+ years profitably with the same strategy (not pure price action) but one that uses indicators as a main part of there strategY?

I doubt for both PA and TA traders. IMO, the key of success in the long run is adaptability.

5. Should I learn to trade with pure price action?

FF misconception. What is pure PA... sorry but that's BS (and this is coming from a trader that doesn't use indies). Ask one of the so call pure PA trader to define that...lol . If you mean knowing some basic about S/R and major rejection or break zones. Yes of course it helps even if you don't use it for all your trading decisions. If you meant that you have to learn all candle formation S/R, Magic lines (I mean Fibs, MM, etc) and you have a mechanical system based on indicators, I don't thing it will be that useful.

In any case, nothing like a good shower of reality going live. Go trade your plan and don't look back to anything people say until you test your system. If it doesn't work and you have to come back to research mode i will recommend to explore basic PA instead of more complicate indies but hopefully you wont need it.

I hope it helps ....ECB conference starting ....Best of luck,

sisse

Answer is simple,

I trade many years and i can say i have succes but that is becouse i i learned one of huge lesson,that is how to control emotions and greed...That is the hardest lesson.
Every system can be profitable if you know how to control emotion and greed...PA or something you created is absolutly same..All that is based on previuse action and cant be view for future..Future is based on future and nobady cant say where will price go..That is why traders should trade with money wich isnt nesecery for normal life...

Cheers

Petar

The computers that sit onsite at the exchanges are doing nothing more than front running orders and it is unethical.

Fact is, there is a strong chance in the near/distant future your system will fail you if its primarily an indicator followed system.

Having success in moving averages, BB's, Stoch, MACD, etc tells me your primary system works best in market range conditions. Tell me what happens when the market experiences a strong trend for the next 10 years?

You indicator based system would be dead in the water and you'd be in the "Trading Systems" forums scouring for a trend based system. You're having success today because the short term market has been ranging for 12 months now, across all major/cross pairs. Most experienced traders know, you can't trade a range based indicator during a trending market! Those who tell you different, I can assure you are not winning traders.

Traders, like myself, flocked to Price only trading only because we know based on a forever changing market dynamic, indicators will fail more often than you'd think. A price trading strategy will make you adapt to the many variables the market may experience. Whether its a trend or range, price traders will make money regardless.

Primarily, price trading doesn't involve trendlines, support/resistance levels, etc, though it don't hurt to know how to use them. Price trading in its pure sense is reading bar by bar and understanding what the market is telling you. A price only trader needs to know the OHLC of price. For most price only traders, that will be enough to make logical decision on whether or not to buy or sell.

Give me the Daily HIGH, LOW, OPEN, CLOSE of a security without telling me what security it is, and I could give you a logical idea of where price may be heading. That is what price only trading is about. Couple price trading with a little fundamentals and you've got the making of potentially successful trader.

You really need to define 'System' before it can be discussed. It can mean different things to different people.

To me a system is your trading method (with an edge hopefully ) either discretionary or non-discretionary (i.e. mechanical), your money management, and the set of rules you follow. All that together is your system, IMO.

Last 3 months i used a trend follower on EurUsd on a big live acc without any intervention. Return so far is 10% gain with leverage less than 3. Not huge profit - but good for retirement account.

Trading will work only with the right discipline.

You have an EA for that?

The fact that the above is false only strengthens your point .

Can systems work? Of course, every trader uses a system.

Can a simple system work? Sure, but how well, and for how many?

What is the discipline? We either choose to make good trades, or we choose to be a bad trader. Discipline implies we're acting against our nature or desires, and that is certainly not necessarily the case.

A strategy isn't a method, it's how we apply our method. Strategies may have to change with the market conditions, but methods that worked well before the modern market continue to work well with it. A price action trader adjusts their strategy, but not necessarily their methods.

Really depends what you call "Price Action"

By J16, you are looking at nothing more than candlestick patterns on high timeframes...

So, a system might incorporate some candlestick patterns.

For example, maybe a Donchian Breakout with a candlestick pattern for entry and exit....

It is not black and white one or the other.

I knew one day someone would surprise me. This is probably the most sensible advice that I've ever read here.