Can someone define and explain "price action"?

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noone22
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Postby noone22 » Wed Jul 22, 2009 1:13 pm

monolisa wrote:Limit, support, resistance, ceilling, floor, whatever way you say it, someone is buying and selling. Imbalance of the two forces makes price move up or down


Theoretics are interested in names.
Practicians are interested in "how to find",
whatever standing behind these names.

All speculations about so-called "price action" doesn't cost a cent,
if you don't know/cannot find/predict/see/feel these limits.

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dchappy
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Postby dchappy » Wed Jul 22, 2009 1:26 pm

Hi Patriot , these are the " defined limits " I was refering to , the lines ( channel ) themselves .
Any news , pivots , s/r etc. may shift the angle of the channel up or down throughout the session but thats ok because price will eventually travel back & forth between those "limits" .
It's all visual to me ..drag a channel across a chart of several days and you'll see what I mean .
When price moves above channel , I look to sell & visa-versa :) :)
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koolbreeze
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Postby koolbreeze » Wed Jul 22, 2009 1:32 pm

Ok... "defined limits." I guess what I should ask is should we look at the news (fed interest rate cuts, etc.) to know when the NEW limits will be set?

patriotstef, your questions indicate to me that you are just not grasping the concept. I mean no disrespect to you as I think you are sincerely trying to understand. No one knows where price is going to go next. There are no limits to define, no magic formulas, no "How do we determine where and when". Forget about news, interest rates, the fed and all that talking head spin nonsense. The mightOne is absolutely right in his comments but they are conceptual ideas. You seem to want concrete methods that will guarentee a correct decision a profitable trade. It just doesn't work that way . . .

Price action is a dynamic event that needs to be viewed in the now, in the immediate moment. The goal is to try to glean who has more strength at that particular moment. Think of a tug of war. The bulls are on one end of the rope, the bears ar on the other end. They are both pulling against each other. At times the strength is close to even and price stalls. At other times the strength is a bit more on one side or another and price moves accordingly. The difference in this game of tug of war is that at any time more players can join one side or the other to exert their strength. Also players can let go of the rope at will and join the other team. At these moments the so called momentum plays out and we get a nice move in one direction.

How do we glean who has more strength at the given moment. We watch the price move. The strength is in the direction of price.

By the way don't get pulled in the mud. Know before entering the trade when to let go. I read your story about your 2008 EURO trade. I have been there before for sure. You don't need me to tell you that stopping out would have been the way to go.

I hope this helps.

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Postby patriotstef » Wed Jul 22, 2009 2:18 pm

Well yes it does help, and I do thank everyone here for the dedication. I guess for a beginner (yes, such as me), the best way to look at the market is to assume that you are gambling at a casino where the house edge is actually in your favor since the "roulette wheel" has a flaw in it - yet the casino is perfectly fine with the wheel nonetheless.

Years ago, I had a formula based entirely on probablility so that I could hopefully win at Caribbean Stud Poker on the internet casinos. I was using martingales, stops, etc. It didn't work since the house edge in that game was considerable.

Now that I'm getting into this market, the odds are not random per se... and I thus wonder if using support/resistance/fibos/etc. would do well in showing me where MY "house edge" so to speak gives me the fullest advantage.

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Postby MightyOne » Thu Jul 23, 2009 5:32 pm

patriotstef wrote:Well yes it does help, and I do thank everyone here for the dedication. I guess for a beginner (yes, such as me), the best way to look at the market is to assume that you are gambling at a casino where the house edge is actually in your favor since the "roulette wheel" has a flaw in it - yet the casino is perfectly fine with the wheel nonetheless.

Years ago, I had a formula based entirely on probablility so that I could hopefully win at Caribbean Stud Poker on the internet casinos. I was using martingales, stops, etc. It didn't work since the house edge in that game was considerable.

Now that I'm getting into this market, the odds are not random per se... and I thus wonder if using support/resistance/fibos/etc. would do well in showing me where MY "house edge" so to speak gives me the fullest advantage.


I actually studied gambling for several years...I am not proud of it :lol:

I was tempted recently to try Drain The Banks on a Blackjack table (so I purchased the latest version of Hoyle Casino ;))

$10 table: stake size is $500

$250 for small bets, DD, & splits
$250 for large bets.

Bet $10 until you are down by at least $50 or until you make $250 (at which time you leave).

Once down $50 continue with small bets until you gain back 4 bets from your lowest total or are down $250.

Once 4 bets up from the low push the other money aside and bet $50 until you lose $250 or make $1,250.

If there is money left in the other pile for double downs and splits then use it and if not then just hit or stand.

If you caught to low then the future results will trend upwards eventually consolidating above the low (hopefully reaching your +25 win goal).

The only way to beat a negative expectation is through positive luck :roll:

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MightyOne
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Postby MightyOne » Thu Jul 23, 2009 5:42 pm

Question from yesterday: WHO WAS LEFT SITTING WITH PROFIT?

Image



SITTING WITH PROFIT NO MORE HE IS (as Master Yoda would say):

Image


There is a reason why I wait for multi TF momentum:

VALUE

If you have a choice between trades with low potential payoffs and trades with high payoffs then why wouldn't you choose only to take the best paying trades when your risk is the same with each?

patriotstef
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Postby patriotstef » Thu Jul 23, 2009 6:26 pm

Hello MightyOne,

Could you describe more fully what you are addressing with these two charts and what you speak of in regards multi TF momentum?

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Postby TheRumpledOne » Wed Jul 29, 2009 9:02 pm

IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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Postby frang0nve » Tue Aug 04, 2009 11:31 pm

Hello to everyone,

Patriotstef, I'll try to explain what I can see from MO charts (please correct me if I'm wrong).

In the first chart, from all traders who pulled the trigger on july 19-20th only those who shorted on july 20th higher that 134.464 and those who bought on July 19th lower than 132.412 were "drawdown free" when that snapshot was taken.

In the second chart we can see that the market dutifully wiped out both "drawdown free" areas and a lot more (creating new ones while moving).

So if we know that the market non stop mission is taking held profit away from traders, then our work is finding held profit and then jumping in to catch that profit and jumping out before we are separated from our profit (zeroed).

Cheers

Francisco

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Postby PTG » Fri Aug 07, 2009 8:55 pm

This is my new signature: "new signature".

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