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How To Trade With a Naked Chart

  • #21
  • Edited 11:45am Oct 16, 2015 11:31am | Edited 11:45am
Candlesticks, bars, line, renko, range bars, tick bars .......all ARE indicators and derivatives of raw prices/ticks! They all serve the same purpose- to sort and organize the raw data and to convert into a readable format. There is no such thing as "pure price acton" trader. Everyone is using some type of indicator. Unless you are looking at raw strings of numbers like Neo from the Matrix .. You need some reference points to know where the price is going. It may be just a single horizontal line, or even specific price level(like 00 round number) that you keep in your mind. But we all need some kind of reference point. I personally don't use "normal" charts but, I use a custom made tool (dynamic fibonacci grid) which gives me multiple reference points across multiple time frames and extracts from the charts only what I consider usable information and all "unusable" information is ignored.
When you look at a chart, (for analisis) what exactly are you looking for? You are looking only for specific type of information. Does it really matter how the chart looks, the shape, the colors.......NO it doest matter! Its all noise. A LOT of noise. And in that noise there is usefull information that you have to extract. That's what all indicators do (automaticaly). Indicators extract only specific type of info and ignore everything else. For example, what a bar or candle does? It extracts ONLY the high, low, open and close for specific time frame, and based on that it creates vertical line on your chart. All other information "inside" the bar is ignored.
  • #22
  • Oct 16, 2015 11:42am Oct 16, 2015 11:42am
Quoting alphaomega
Candlesticks, bars, line, renko, range bars, tick bars .......all ARE indicators and derivatives of raw prices/ticks! They all serve the same purpose- to sort and organize the raw data and to convert into a readable format. There is no such thing as "pure price acton" trader. Everyone is using some type of indicator. Unless you are looking at raw strings of numbers line Neo from the Matrix .. You need some reference points to know where the price is going. It may be just a single horizontal line, or even specific price level(like 00 round number)...
love it, hail yes you are the meeeeennnnn
we don't predict, we only ride
  • #23
  • Oct 16, 2015 11:48am Oct 16, 2015 11:48am
Quoting alphaomega
Candlesticks, bars, line, renko, range bars, tick bars .......all ARE indicators and derivatives of raw prices/ticks! They all serve the same purpose- to sort and organize the raw data and to convert into a readable format. There is no such thing as "pure price acton" trader. Everyone is using some type of indicator. Unless you are looking at raw strings of numbers like Neo from the Matrix .. You need some reference points to know where the price is going. It may be just a single horizontal line, or even specific price level(like 00 round number)...

sort of agree ,

but there are "pure price action traders" out there .. trading from nothing but the "Depth of Market" and or ticker tape... there is pretty much nothing out there to get you any closer to the raw market outputs then this...
  • #24
  • Oct 16, 2015 11:49am Oct 16, 2015 11:49am
Quoting cakrajaya
{quote} love it, hail yes you are the meeeeennnnn
ngapain oum disini...jauh amat mainnya.. udah malam.. pulang.. !!!
And when you have decided, then rely upon Allah.
  • #25
  • Oct 16, 2015 11:56am Oct 16, 2015 11:56am
Quoting alphaomega
There is no such thing as "pure price acton" trader. Everyone is using some type of indicator. Unless you are looking at raw strings of numbers like Neo from the Matrix .. .

follow the white rabbit


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classic

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  • #26
  • Oct 16, 2015 12:07pm Oct 16, 2015 12:07pm
Here is a good method for trading naked charts:

1. Look at the chart and decide if its going up, down or sideways.
2. If its going up, go long. If its going down, go short. If its sideways, stay out.
  • #27
  • Oct 16, 2015 12:11pm Oct 16, 2015 12:11pm
Quoting PrymeTyme
{quote} follow the white rabbit
This is old school already....
Yes, you are right, thats as close as it gets to "pure" price action. But when you look at the DOM you still look for reference points. Like where is the high/low of the day, where is the volume on the market profile, where are the big bids/ offers.... Maybe you look at the history of the footprints to get some clues.....

By the way, with all that HFT, dark pools, spoofing, iceberg orders,...... the dom is becoming useless. There is no edge there. Not anymore. Everyone (the whole world) is looking at the same information, but the HFT firms are getting the info a few milliseconds faster so they can front run the normal traders.
And for FX specifically, ANY type of DOM is 100% useless, because FX is decentralized market. Controlled by only 15 major banks( they provide over 90% of the liquidity). So you never know what the real numbers/volumes are. Nobody knows. Even the banks themselves don't know the whole picture, because they compete against each other.
  • #28
  • Oct 16, 2015 12:13pm Oct 16, 2015 12:13pm
Quoting alphaomega
{quote} This is old school already.... Yes, you are right, thats as close as it gets to "pure" price action. But when you look at the DOM you still look for reference points. Like where is the high/low of the day, where is the volume on the market profile, where are the big bids/ offers.... Maybe you look at the history of the footprints to get some clues..... By the way, with all that HFT, dark pools, spoofing, iceberg orders,...... the dom is becoming useless. There is no edge there. Not anymore. Everyone (the whole world) is looking at the same...
completely 100000% agree
And when you have decided, then rely upon Allah.
  • #29
  • Oct 16, 2015 12:20pm Oct 16, 2015 12:20pm
Quoting alphaomega
{quote} By the way, with all that HFT, dark pools, spoofing, iceberg orders,......
after I learn about this, change the whole picture in my head and change revolutionary on my trading. lot of person who come to this forex did not learn, read about all of this and want to jump to "chart system" and study only the chart and create the most dangerous "data suit" mindset game.
we don't predict, we only ride
  • #30
  • Oct 16, 2015 12:22pm Oct 16, 2015 12:22pm
Quoting alphaomega
{quote} This is old school already.... Yes, you are right, thats as close as it gets to "pure" price action. But when you look at the DOM you still look for reference points. Like where is the high/low of the day, where is the volume on the market profile, where are the big bids/ offers.... Maybe you look at the history of the footprints to get some clues..... By the way, with all that HFT, dark pools, spoofing, iceberg orders,...... the dom is becoming useless. There is no edge there. Not anymore. Everyone (the whole world) is looking at the same...
yea in FX its useless .. unless u have access to the interbank market but then again.. like u said

trading off the DOM on other instruments like futures etc. isnt useless , there are games beeing played yes.. and u can identify them.. if one knows what to lookout for ie. anticipating the future course based on the action on the DOM etc..

basically its just following the path of least resistance , u know institutions cant simply put in orders / market or limit based on "patterns" support or resistance levels.. etc.

they need to see how the market absorbs/ reacts to orders.. ie. they probe the markets , with for example putting a large buy order out in the market and see how the market reacts to it .. does it get absorbed quickly ? does it create a following ? etc.. and based on the markets reaction , they will position themselfes.. etc.
  • #31
  • Oct 16, 2015 12:56pm Oct 16, 2015 12:56pm
Quoting PrymeTyme
{quote} yea in FX its useless .. unless u have access to the interbank market but then again.. like u said trading off the DOM on other instruments like futures etc. isnt useless , there are games beeing played yes.. and u can identify them.. if one knows what to lookout for ie. anticipating the future course based on the action on the DOM etc.. basically its just following the path of least resistance , u know institutions cant simply put in orders / market or limit based on "patterns" support or resistance levels.. etc. they need to see how the...
Look, having a DOM with real time order book and footprints was the real deal 10-15 years ago. Some traders who had access to such platforms and knew how to play the game, made a killing. But today it's a different story......
I will tell you a "secret". Today the real edge is to learn and understand what the big algo traders are doing and just follow them. (firms like Renaissance Technologies). People think that these firms do some super complicated rocket science, while in reality it's just simple pattern recognition. They look for context, patterns, and specific market behavior around news events.
For example in a range context they fade the daily extremes(the new highs/lows) buy putting limit orders outside the range(sell above, buy below), and in trending context they fade the crowd who by default trade against the strong trends. For example they wait for the price to reach technical area of "support", wait for the crowd to buy there, and then sell aggressively so the support area breaks and crowd is forced to liquidate on lower prices.(that's where the smart guys cover for profit).
This game has been going on for quite awhile now. You just have to learn how to identify the pattern.
The same game is played during news releases! Unless the news is completely outside of expectations, they trade against the number. That's why 8 out of 10 times, for example you get positive number but the price goes just little bit up(smart money absorbing the retail/dumb volume) and then the price reverses and makes new low and all retail traders begin to scratch their head in disbelief.
  • #32
  • Oct 16, 2015 1:23pm Oct 16, 2015 1:23pm
ahem , its still possible to identfiy "fades" ," Fakeouts" , "Shakeouts" and what not with a DOM ... aswell as with a simple chart..


yea,, context + price action = anticipating


and most algos,,, are NON directional ... there are many ways to skim a cat.. but retailers have to stick with directional movements unless u are a math geek.. and head down the option road--

and yes its possible to anticipate a future directional movement on specific price behaviour and how when and whatnot may play out if this or that happens...

ie. fullfilled and unfullfilled expectations.. get it ?

there is a way of looking behind the charts and dom , based on the knowledge of market mechanics(orderflow) and market psychology (smart vs dumb money) so to speak and yes one needs a reference point of some way...

BUT an MA is not noir represents support or resistance per se ..

A level of support is an area where buying pressure overwhelms selling pressure. More specifically, support is the zone or level at which those who have enough money to make
​a difference are willing to show their support by halting, and reversing the decline by buying. whereas a level of resistance is an area where selling pressure overwhelms buying pressure. More specifically, resistance is the zone or level at which those who have enough money to make a difference attempt to halt, and reverse a rise by selling.

and thats it...
  • #33
  • Oct 16, 2015 1:25pm Oct 16, 2015 1:25pm
Quoting Xela
{quote} The things I trade (without indicators at all) are reliable bar patterns such as 1-2-3 formations, Ross Hooks, Slaughterbeck entries, "long bomb" entries, and so on.
What are Slaughterbeck and 'long bomb' entries?
  • #34
  • Edited 3:10pm Oct 16, 2015 1:58pm | Edited 3:10pm
Quoting livindaylite
What are Slaughterbeck and 'long bomb' entries?

"Slaughterbeck" entries (named after someone called Steve Slaughterbeck, as I remember) are a way of entering trades arising after Ross Hooks, in a very low-risk position. They're explained in Joe Ross's textbook "Trading The Ross Hook", over about 7-8 pages in one of the later chapters - sorry, I haven't actually got the book here and can't give an exact reference. I've seen amazingly little information about them online (in spite of looking for it) and the little I've seen has actually been both incorrect in places and misleading overall. For me, it's a high win-rate, low-profit method.

"Long bomb" entries are a method of jumping onto a new trend in some circumstances (in the hope that it might turn into a real "runner") shortly after and as definied by a specific type of reversal bar-pattern. It stems from an idea related to the age-old concept of "naked closes" but according to a definition that compares them with the positions of their antepenultimate bars (it was a new one, to me!). I stole it from some other textbook - sorry, I can't at the moment remember which - and adapted it to suit faster-moving forex charts than the commodity charts from which it was originally devised/tested. The origin of the name actually has something to do with baseball, I think (edited here to add: no, sorry, I meant American football). It's a low win-rate, high-profit method with which one hopes to break even, on average, (or a little bit better) over the great majority of the trades, while also catching the much more occasional "big runner" for the profits.

These two require very different money management techniques, of course.
  • #35
  • Oct 16, 2015 2:03pm Oct 16, 2015 2:03pm
Thank you Xela,

I googled but found precious little, but you've given me more to go on.
Maybe, you might post some charts examples of both some time.

thanks again
  • #36
  • Oct 16, 2015 2:29pm Oct 16, 2015 2:29pm
Quoting moeda
{quote} completely 100000% agree
Second that....
  • #37
  • Oct 17, 2015 5:13am Oct 17, 2015 5:13am
Quoting alphaomega
{quote} Look, having a DOM with real time order book and footprints was the real deal 10-15 years ago. Some traders who had access to such platforms and knew how to play the game, made a killing. But today it's a different story
Just this week I stumbled upon http://www.noft-traders.com/ I don't know if its the same; at least in principle it must be, right? Seeing the stack of orders telling us which way the market is going to move. Logically, that would be the ultimate edge, no?

...... I will tell you a "secret". Today the real edge is to learn and understand what the big algo traders are doing and just follow them. (firms like Renaissance Technologies). People think that these firms do some super complicated rocket science, while in reality it's just simple pattern recognition. They look for context, patterns, and specific market behavior around news events. For example in a range context they fade the daily extremes(the new highs/lows) buy putting limit orders outside the range(sell above, buy below), and in trending context they fade the crowd who by default trade against the strong trends. For example they wait for the price to reach technical area of "support", wait for the crowd to buy there, and then sell aggressively so the support area breaks and crowd is forced to liquidate on lower prices.(that's where the smart guys cover for profit). This game has been going on for quite awhile now. You just have to learn how to identify the pattern. The same game is played during news releases! Unless the news is completely outside of expectations, they trade against the number. That's why 8 out of 10 times, for example you get positive number but the price goes just little bit up(smart money absorbing the retail/dumb volume) and then the price reverses and makes new low and all retail traders begin to scratch their head in disbelief.
Can you show charts of how this is done, or how you do this? otherwise, you are not telling us a '' secret '' are you? because I'm sure most readers are already aware of this.
You say
Quote
you just have to learn how to identify the pattern.
the nub is in the ''just'' Again, would love to see how you 'see' the market and say what explained on a chart; as a picture is a thousand words.
  • #38
  • Oct 17, 2015 5:31am Oct 17, 2015 5:31am
Quoting kucindacat
I'm here to discuss with u all how to see chart with no tools or indicator.
Nice thread you have started, but so far you have not discussed or explained very much if anything. I hope you don't feel that the thread has been hijacked by other commentators so far (2pages). Look forward to what you intended intended to share.
  • #39
  • Oct 17, 2015 6:30am Oct 17, 2015 6:30am
Quoting livindaylite
{quote}{quote} Can you show charts of how this is done, or how you do this? otherwise, you are not telling us a '' secret '' are you? because I'm sure most readers are already aware of this. You say {quote} the nub is in the ''just'' Again, would love to see how you 'see' the market and say what explained on a chart; as a picture is a thousand words.
yup , there is no secret and based on the thread title i will try to exaplain how to read and interpret market actions on the fly via a chart,

in this case i picked gold in september on H1 , yes its hindsight but its for illustration purpose only...

Attached Image

1.We made a low of the day where price reacted off 1. buyers in this case stopped the decline and supported the price as of now,
we now can draw a line on that low in order to watch how price reacts at or near that level if it may act as future support level or not


Attached Image

2. Price broke the "support" level ratzher firece ie. on high momentum , triggering StopLoss levels of some bulls and probably some sell stop orders of bears
so we have fresh money and scared money all running in the same direction at the same time , now its of great interrest how the market reacts to this "liquidty"
as we see there is no folloow thru to the downside , price stays near the broken low , this indictaes that there are might some people buying into the panicing bulls
however this is only the first clue, we still have to wait for some confirmation if this is a legit "shakeout" or not


Attached Image

3. we do this by examining the buying and its strenght ie. is it capable to trade back above "support" if so how fast ? and how far?
so one can basically say if the rally back above " support" isnt capable to at least takeout th 50% mark of the preceeding decline
and the stride or pace of the rallie is rather poor .. we can speak of a weak rally and probaly due to a technical nature ie. if that is the case
one isnt looking at a shakeout but rather a resume in decline , in this case however we see that the momentum is good and we get back well above th 50% mark
so we can say that there is some buying pressure here and indeed have a shakeout at hands , the next clue we want to see is a proper retest of the shakeout


Attached Image

4. we again do this by drawing the 50% level of the preceeding rally , in this case however if the retest of the lows stop higher then the 50% mark
we can also conclude that sellers are done for most part and shoud also be considerd as a sign of strenght, ie. if a retest ends higher or near the 50% is a good sign
even thou the lows can be retest again , and if they hold or form a slighty higher low this can also be considered strong , in this case we bounce off the 50% mark
and that is the final clue that the fromer action was indeed a shakeout and now we can watch out for signs of accumulation and or an entry in whatever one is trading


Attached Image (click to enlarge)
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5. we have draw in a resistance level as price isnt capable to move any higher so we might see a range forming, on (5.) we see a test for sellers as a fast spike down towards support but we close off the lows , so there are no sellers there and support holds, another sign of strenght and an entry chance


Attached Image (click to enlarge)
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6.price fiddles arround near suppport going not really anywhere which just implies again that there is no interrest to the downside , this pllus the context of previous "price behaviour" asures us that we indeed whitness accumulation ,now entries on the longside could have been looked for at the 4. and 5. on any lower TF with an SL below the lows of the shakeout however if we trade the H1 in this case we whitnessed at (6.) higher lows which could ad an entry opportunity or even a "indecsision"(orange) which could be used on the break of the upperlimit for an entry with an SL below support


Attached Image (click to enlarge)
Click to Enlarge Name: g7.PNG Size: 50 KB

7. sure enough the breakout occures on high momentum , starting with now in hindsight preliminary support (1) a shakeout (2)
and a range of accumulation between 1109 res. and sup. 1102 ...
  • #40
  • Oct 17, 2015 10:52am Oct 17, 2015 10:52am
Quoting PrymeTyme
fullfilled and unfullied expectations trigers orderflow , the end result of the transactions taking place within the orderflow is price action.. basically .... PriceAction = The Result in Price Change after Trades/Transactions(orderflow) are executed price action is a snapshot , put a lil context into it , a well thought out and testet trading plan and you got yourself a good starting point to turn into a profitable trader indicators are just a derivative of said .. PA / Transactions..
Nice!
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