Price action is dumb, and you're lazy for thinking otherwise | Page 24 | Forex Factory

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Price action is dumb, and you're lazy for thinking otherwise

  • #461
  • Dec 28, 2011 8:13pm Dec 28, 2011 8:13pm
you know what im doing, making a shit load of money trading forex and i don't give a damn how it works i buiild a system and bam it works.
  • #462
  • Dec 28, 2011 8:19pm Dec 28, 2011 8:19pm
yeah i just drink rum and press buttons i don't even know what a forex is
  • #463
  • Dec 30, 2011 11:45am Dec 30, 2011 11:45am
Most of the time you will notice that people swearing by fundamentals are the same that give you the "more than 5% a month is bullshit... SLs below like 100000 pips dont work) stuff. And as it happens those same people if you ask them don't really know at all about technicals especially not about cross currency technicals. Most of the time they admit themselves that they are bad in entries but good at exits. Most of the time its pretty simple - they lack a great deal of important knowledge and compensate for it with large timeframes, even larger stops and opening themselves up to the risk of interventions and the like + (thus more than 5% is evil stance) reduce their gains of course with the big SLs.

People never like to admit that something is good if they fail at it since that would give them an inferior feeling. It's not human mentality do admit that. Everyone wants to be the best, important whatever.

Why TA works? Well proper TA especially if you can logically explain it is almost always based on momentum and trends and if there is one thing that you can put a statistical assumption on in forex its if a decent size of the market is starting to head into a direction it will go in that direction for a certain amount of pips. You just need to know which ship to jump on. (hint trading a single pair is already wrong from the beginning on - technically)

Most simple indicator TA doesn't do that though. It doesn't go into depth and especially works on a much much too small share of the market. That's why pretty much anyone just using "standard" TA fails or cannot explain logically why it's (should be) working. It's not as easy as that.
  • #464
  • Dec 31, 2011 1:27am Dec 31, 2011 1:27am
Quoting RBlackburn
yeah i just drink rum and press buttons i don't even know what a forex is
Stick to rum, XXXX is %#^&, prefer VB myself!
Audentes Fortuna Juvat
  • #465
  • Dec 31, 2011 4:10am Dec 31, 2011 4:10am
Quoting unknown4x
Most of the time you will notice that people swearing by fundamentals are the same that give you the "more than 5% a month is bullshit... SLs below like 100000 pips dont work) stuff. And as it happens those same people if you ask them don't really know at all about technicals especially not about cross currency technicals. Most of the time they admit themselves that they are bad in entries but good at exits. Most of the time its pretty simple - they lack a great deal of important knowledge and compensate for it with large timeframes, even larger...
If you can devise a price action system that works 95% of the time AND explain why it works then I guess you are onto a winner then.
  • #466
  • Dec 31, 2011 4:16am Dec 31, 2011 4:16am
Quoting superdezign
Well

Why does you system work?

Counter point?... Go!
Becouse i buy at the price where institutional buy orders didnt get filled and vice versa. Thats my simple and straight forward reason to buy and sell. + sell high and buy low.

EDIT: ofcourse the price can be determined from the price chart alone.

Happy 2012
MIKY
--Be in the NOW or get lost in time.--
  • #467
  • Dec 31, 2011 5:37am Dec 31, 2011 5:37am
Quoting superdezign
I get the feeling that this gets off to "orderflow" as well, which again, it's too arbitrary..
Nice thread. I don't have the time to read all of it.

When you use the word 'arbitrary', IMO you are regarding the market as a whole. If the market was anything more than arbitrary then it would all be logical and orderly - anything less it would be random.

We all know the market is neither orderly, logical nor random. That is why we as traders spend our time on analysis - to skew the 50:50 probability in our favour.

Your original point about indicators. I do agree with you. If you understand how they work and why they are useful for your analysis they should be apart of your workflow - if not then you are being ignorant. I understand your point here because indies are based on calculations and math. S/D, trendlines and price patterns are not based on math but basic graphical reading.

Pivots and fibs have math calculations. I understand how they are calculated but I don't know how they work when price reacts to them. I don't really care because when used properly with other tools and fundimentals they work great.

Traders use technical analysis for basic two reasons I believe; 1, to specify entries and exits. 2, identify the movement of the market participants and get in with the movement.

The lesson I have learned recently is that technical analysis is not used to predict the future (although some traders can do that very well), it is used to identify money flow. Price patterns tell you what traders are doing. Generally price ranges/consolidates then breaks out to form another range/consolidation area. In a trend, range trading in these zones can be very easy. Identifying breakouts from these zones can also be easy (if you know what you are doing).

If I can read the logic of these movements then the market would not be arbitrary, it would be logical, understandable and predictable - I could exploit it at any moment for profit. The fact is that the complex inter-workings of moneyflow (funds taking money in and out of different instruments for lots of different purposes and reasons) and emotions are not holistically understandable. Well, not to me anyway

I have explained my trading and my know-how or lack there of. As long as your account is expanding in profit I don't suppose you need give a sh!t about how your methods work.
  • #468
  • Dec 31, 2011 9:38am Dec 31, 2011 9:38am
Quoting Tyoon
...
The lesson I have learned recently is that technical analysis is not used to predict the future (although some traders can do that very well), it is used to identify money flow. Price patterns tell you what traders are doing. Generally price ranges/consolidates then breaks out to form another range/consolidation area. In a trend, range trading in these zones can be very easy. Identifying breakouts from these zones can also be easy (if you know what you are doing).
...

BINGO. Lesson learned that even most of the self proclaimed gurus on ff don't even comprehend a bit.

There is also the problem: money flows are not as easy as people wish they would be and force you to pretty much take care of a few dozen charts depending on how detailed you want do analyse it. Putting that EMA, RSI, CCI, MACD whatever stuff on that one chart is not going to tell you shit about the market. It tells you that EURUSD is doing something right now. It does not tell you why it is doing it. Entering that EURUSD breakout because of some indicator applied to it just screams for getting your ass kicked because it might actually be EURGBP dragging EURUSD behind because of GBP strength / weakness. Of course the moment you enter it will do the wet cat bounce from the electric fence and everyone will scream "SEE TA IS NOT WORKING".

But... putting it on everything that influcences the two sides of your trade changes that a lot already.

TA works more precise than pretty much anything out there as long as you use it the right way: to identify money flows on a timeframe that gives you enough time left to join the flow. Major flows don't just start and end right away. This is not retail money creating them.
  • #469
  • Dec 31, 2011 10:07am Dec 31, 2011 10:07am
Quoting unknown4x
Putting that EMA, RSI, CCI, MACD whatever stuff on that one chart is not going to tell you shit about the market..
The only oscillator I used was MACD, watching for those divergences. I don't use it anymore. EMA is good for indicating the general direction and can act as a guide for support and resistance.

Quoting unknown4x
EURGBP dragging EURUSD behind because of GBP strength / weakness
Lol, are you talking about wednesday's activity? The money was flowing out of the Pound into the Dollar. There was not much flow out of the Euro it was mainly Dollar strength that gave EURUSD the drop making some traders think that the bad news is 'finally getting priced in,' BS. The money desired dollars due to a drop of risk off equities.
  • #470
  • Dec 31, 2011 10:22am Dec 31, 2011 10:22am
Quoting Tyoon
The only oscillator I used was MACD, watching for those divergences. I don't use it anymore. EMA is good for indicating the general direction and can act as a guide for support and resistance.



Lol, are you talking about wednesday's activity? The money was flowing out of the Pound into the Dollar. There was not much flow out of the Euro it was mainly Dollar strength that gave EURUSD the drop making some traders think that the bad news is 'finally getting priced in,' BS. The money desired dollars due to a drop of risk off equities.
Yeah I'm not saying any indicator is wrong. Were just a few examples. It doesn't matter which one you use. They all follow pretty much two cases: averages or ohcl values and just display it in a different way. MAs are actually the most powerful indicator you can have for several reasons.

Good example was EURUSD on Friday. Choppy as hell and barely made any pips while money flows showed you clearly that the first one to break out was USDJPY, next one GBPUSD and last one AUDUSD. EUR was getting crushed by pretty much every opposite cross out there. Applying TA the wrong way (only on EURUSD) wouldn't have gotten you very far or even got you some loosers. Applying it in the right way would have gotten you into all 3 trades in a smooth, almost 0 retrace, double amount of pips way than single cross TA.

Fundamentals needed? 0%. TA? 100%
  • #471
  • Dec 31, 2011 10:57am Dec 31, 2011 10:57am
Quoting unknown4x
first one to break out was USDJPY, next one GBPUSD and last one AUDUSD. EUR was getting crushed by pretty much every opposite cross out there.
Yen has been constantly accumulated since last friday (23rd). Pound has been a little choppy but in last few weeks it has been selling off. Friday was all about the Dollar selling. The dollar is at demand and has bounced so we could be seeing further strength in Dollar in Jan.

If you know what to look for the EURUSD was very technical on friday. Fibs, pivots and S/D worked well. I was focusing on S/D so I kinds forgot about my fibs and pivots

Quoting unknown4x
Fundamentals needed? 0%. TA? 100%
This does bring us onto the popular debate about FA vs. TA. (Sorry superdezign for deviating your thread a little while your vacant ) Fundies and technicals go well together. FA gives you the general direction and sentiment while TA gives you the guidelines and indication of movement. Ignoring reports and news can put you at a huge disadvantage causing you to miss out on obvious opportunities or making bad entry decisions.

IMO trading should be a holistic practise taking in all the information then filtering it, digesting it and deciding upon it. Ignoring important and relevant information can only be a bad thing for trading. For example, keeping an eye on what central banks are doing with money (eg. Qeasing, -+interst rates, est.) gives you a big clue on where the big funds are going to put their money.

My FA understanding needs much work but it's all apart of improving my trading.
  • #472
  • Dec 31, 2011 11:14am Dec 31, 2011 11:14am
Quoting superdezign
Every move I make is based in logic.
I couldn't read through this whole thing because I don't have that kind of time to waste, but I have a question for you.

Are your trades 100% profitable?

I have to leave for a trip this weekend, but I will respond when I get home to your answer.
Small disciplines repeated with consistency lead to great achievements.
  • #473
  • Dec 31, 2011 11:27am Dec 31, 2011 11:27am
Quoting moneymaker2
I trade short term charts using technical analysis. I use Bollinger Bands, EMAs, RSI and Stochastics. I know what each does. I know that a very high percentage of the time, price does the same thing in relation to my indicators, thus giving me "signals" that I interpret as to the validity of them based on experience.

I also day trade stock and index options, and use similar indicators to help me determine the direction of price movement for the next day. If the before-market futures indicate the same direction, it is normally a good play....
Amen.

http://www.forexfactory.com/showthre...38#post4809038
Small disciplines repeated with consistency lead to great achievements.
  • #474
  • Dec 31, 2011 11:31am Dec 31, 2011 11:31am
Quoting superdezign
You keep zooming in on shorter and shorter timeframes, and the markets are already random enough, but when you zoom in on shorter and shorter timeframes all you are doing is adding more and more noise to your chart, price movements that have no relevance whatsoever can be easily seen on 1M and 5M timeframes..
No relevance to who? If I make money consistently from looking only at a 1 second chart, a 1 range chart, or a 1 tick chart, I think that's pretty damn relevant.
Small disciplines repeated with consistency lead to great achievements.
  • #475
  • Dec 31, 2011 11:39am Dec 31, 2011 11:39am
Quoting superdezign
And let me tell you something about imbalances, they really only last for a heartbeat, especially on those really small timeframes you jump in and out of, and it is almost impossible to predict where price will end up if there is an imbalance..
Same thing on all timeframes buddy. This goes back to my first question, are your trades 100% profitable. Or I could extend it to even in your profitable trades, are your targets hit 100% of the time?
Small disciplines repeated with consistency lead to great achievements.
  • #476
  • Dec 31, 2011 11:42am Dec 31, 2011 11:42am
Quoting superdezign
Not satisfied..


For example, when I first started playing poker I thought I was amazing. I took a few hundred bucks up to a couple grand in less than a month.

I was way above my EV curve though, which is essentially how much money I should have won. I chalked it all up to "well Im winning arent I"...

Then I got serious, learned how to play, studied the game, learned all the odds, when to bluff, how to analyze opponents, exploit weakness, and the importance of position, ect...

Then the next month after that wasn't so great
No. This sounds like your shouldn't have pursued further education and stuck with what worked.
Small disciplines repeated with consistency lead to great achievements.
  • #477
  • Dec 31, 2011 11:51am Dec 31, 2011 11:51am
Quoting moneymaker2
In my opinion, I think that is what hobbles many of the traders, at least on this forum....the need to make things fall into neat, mathematically orderly packages. Rather than learning to be able to predict the direction of the price (I mentioned earlier I think that is the foundation of it all), they make excel spreadsheets to tell them how many lots to trade based on a specific R:R ratio and what Stop Loss to set based on a % of their lot size or account size.

I just don't know if I can make 40 trades in a row without a loss that I fall into...
Amen, again.

http://www.forexfactory.com/showthre...20#post4809420

You don't need to know calculus to trade. I did learn calculus, in high school I think it was. Then again in college. It has absolutely zero to do with my trading. I admire you trying to fit it in somehow, that's clever. But I don't see how it would help me with my trading. You don't even need to be smarter than your neighbor to do it. Like your line example, something is going to happen at any line you draw on the chart. Something always happens at every horizontal location on a chart.

Certain patterns are consistently recognizable. Recognize them, trade them, do it again. I'm not sure what you're getting at in this thread. I think you studied too much, and worked too hard, and are not trying to show everyone that you know a lot. That's wonderful that you do. You know more than me!

However, I have no idea whether you are actually successful or not, nor you me. But I do know that whatever you have chosen to think about when you are clicking buy or sell buttons is fine with me. If it works for you, then wonderful. Is your favorite color Navy? Mine is. I match Navy shirts with jeans most of the time. They go well together. Do you match navy colored shirts with Khaki pants? I guess that works too and that's okay. I love Pizza, its my favorite food. Is it yours? Doesn't matter really. Do you eat pizza with a knife and fork? Or do you pick it up with your hands? Again, doesn't matter.

You are not accepting that there are other ways to trade and to trade profitably. Your way is not the only way. Thanks for the debate, but I'm done reading whatever it is your trying to accomplish here.
Small disciplines repeated with consistency lead to great achievements.
  • #478
  • Dec 31, 2011 11:54am Dec 31, 2011 11:54am
jmflukeiii, you do know you can combine these posts together into one? It would keep this thread a lot cleaner.
  • #479
  • Dec 31, 2011 12:19pm Dec 31, 2011 12:19pm
Quoting Tyoon
jmflukeiii, you do know you can combine these posts together into one? It would keep this thread a lot cleaner.
Sorry just left on a trip, on my phone now. Too hard to change
Small disciplines repeated with consistency lead to great achievements.
  • #480
  • Dec 31, 2011 1:34pm Dec 31, 2011 1:34pm
Quoting superdezign
You can't use a single variable to predict itself
O really?

google it
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