Price Action Question...

Hi. Does Price Action Trading actually work? If so, why are there lagging indicators at all? Is it all just a rip off? Is PA what the Interbank big boys do? If robots only work in hindsight, why do the huge companies use them, instead of just super smart traders? Thanks. Confused newbie..

Domination. lots of excellent questions, and I saw your respoonse in "Introducer Yourself". Price action is being able to discern the type of moves prices made relative to where it is in the trend. As an example, if you get az retracement, then a strong move back in the trend, then it will most likely continue the next leg in that trend which is a sign to enter a trade within that trend. If you have a lower low made in an uptrend or a higher high made in a downtrend ,then that is probably a sign of a reversal, but subsequent price action will also be a determinant. A doji forming in a key resistance or support zone is also a sign of a reversal. It is also seldom you will see an engulfing candle made which means once a new low or new high is made comaprative to the last candle it will probably continue that way. Other people like to use trendlines to detemine price action. I could go another 20 pages just on price action.
For the msot part indicators have to be lagging because of the nature of them. Indicators are a measure of previous price action comaparable to the present moment. They are a guide. As an example, MA's are a moving average. They measure the average of the last x amount of candlesticks within that timeframe. They are very helpful to use within its proper context.
Your paid courses and robots are, as a rule, nothing but a ripoff. They have something to sell, because they do not know how to trade for themselves, so they want to sell you something. I have never known of a trading robot to work. They are still popular because they cater to people's laziness. It seems easy enough; hook the robot up and let it do al lthe work.
Huge companies use them on their demos, so they show how good they are in periodic times, then they sell them to you.
The interbank big boys are just that .They see where the flow of money is and trade against it, because they know there is a reversal of fortunes. The thing is they use extremely low margins, so they never worry about bankrupting their accounts.
The big companies will not be able to get the "super smart traders" to trade for them, because the super smart traders are making money without the need of any peripheral devices or support. As an example, I'm a good trader. I have no need or desire to trade for someone else nor sell someone anything. I just make pips off my own exploits.
I wish you well with the course you bought, but I'm very skeptical. Please take a look at my thread. It is packed with great information that you might be bale to glean a few nuggets from for your personal trading. Feel free to ask question, make comments, or even disagree. Everything is okay with me. Just click on the link in my signature .

dominationFX said:

Hi. Does Price Action Trading actually work? If so, why are there lagging indicators at all? Is it all just a rip off? Is PA what the Interbank big boys do? If robots only work in hindsight, why do the huge companies use them, instead of just super smart traders? Thanks. Confused newbie..

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Hi dominationFX,
I fear you're asking the wrong question.
Nothing works and everything works. By that I mean price action trading isn't like a mechanical instrument like a TV or lawnmower that works for everyone that uses them - or for no one that uses them if the machines are broken. It's down to you as to whether or not anything works. So, when members post (as many do) that indicators are useless and that they don't 'work', all they're really saying is that indicators are of no value to them. The same could equally be said of price action. You might do well with it while another member dismisses it as a waste of time. Horses for courses. So, a better question to ask is 'do you work and what works best for you?' Unfortunately, only you can answer that one!

Tim.
PS. If this doesn't make a lot of sense, please read the 'Essentials of First Steps' Sticky as all of this is explained in some depth there.

dominationFX said:

Hi. Does Price Action Trading actually work? If so, why are there lagging indicators at all? Is it all just a rip off? Is PA what the Interbank big boys do? If robots only work in hindsight, why do the huge companies use them, instead of just super smart traders? Thanks. Confused newbie..

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You can learn for free if you just go to the james16 chart thread on forexfactory.com That will give you as much as any paid course, probably more. Dont waste any more money on training courses, they are mostly useless and sometimes outright scams. Likewise any 'preditive' software is generally rubbish.

The right lagging indicators can be incredibly useful when combined with leading indicators in a trading method!

Unfotunately, pboyles is right regarding training in general - there are a lot of useless and often counter-productive offerings out there which makes it very difficult for people to find those educators who are offering high quality education! They are out there but they aren't always easy to find. Our industry definitely suffers from a quantity not quality problem.

Thanks for the help guys. These are some of the concerns the newbie to FX has.
I did John Bartletts course on Forex for beginners, from learntrading.co.uk. An excellent course for only 150 pounds. Everything has to start somewhere. There are not many genuine, sensibly priced courses out there. No wonder so many newbies give up, or blow up!
I am now into Price action trading, so am going with Brendan Egans TA course from 123learntotrade.com in Chicago.
There are so many types of course and trading style. I have been in full info overload mode and it is nice to have a forum like T2W to ask questions from others.
I feel a good overall understanding of Econ. Fundamentals, Chart Analysis and am fully immensed in Trading Psychology. I think Price Action simplifies things for me, I am comfortable with that style. I know enough not to be seduced by rip off claims, software robots, 3000 dollar seminars and all that jazz.
I was also hoping to speak here with some experienced PA Traders, who have nothing to sell me. LOL..! Thanks again guys.

Price action works! Definitely read James16 chart thread at forex factory. Trader_dantes money making thread on here also.

Thanks for the info. I have read James16 and will look at trader_dante. Does price action have a founder? What is the best PA website/book/mentor please?
Also, is there an even simpler way to trade Forex, ie looking at Fundamentals only, whilst ignoring TA Charts? Thanks..

dominationFX said:

1. Does price action have a founder? What is the best PA website/book/mentor please?

2. Also, is there an even simpler way to trade Forex, ie looking at Fundamentals only, whilst ignoring TA Charts? Thanks..

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dom,
1. No one person is credited with it as such - although many peeps would name Richard D. Wyckoff in answer to the question. Loads of stuff on T2W and the interweb about him.
2. Simpler - that depends on your point of view and definition of simple. The method that each trader uses is, by default, the 'simplest' one they can find. After all, only trading masochists would deliberately choose an alternative 'harder' method!
Tim.

price action IS easy and the best website is James16. He also has a group you can pay to join but for a complete beginner, its all there on FF

The other 'simple' alternative is trend trading. Wayne Jackson uses this and trades Eur/usd only! Simple system that works although he knows his fundamentals. Also on forex factory, called 'Jacko's Forex House of pleasure and pain'

Thanks, everyone. I have read trader_dante and his lengthy post on PA. I wil look up Wykoff next.

Welcome to trading forex dominationFX. Its nice to see that you are straight down to business from the word go.

All I can say is that you have picked the best trading method and that would be Price Action.

With that out of the way, there are probably many ways to trade price action. Although the concept of it might be fundamentally the same, picking entries or even your exits might differ from one trader or one system to the other. The most important thing is you are comfortable and confident with the method that you have picked.

Finally good luck with your trading.

timsk said:

Hi dominationFX,
I fear you're asking the wrong question.
Nothing works and everything works. By that I mean price action trading isn't like a mechanical instrument like a TV or lawnmower that works for everyone that uses them - or for no one that uses them if the machines are broken. It's down to you as to whether or not anything works. So, when members post (as many do) that indicators are useless and that they don't 'work', all they're really saying is that indicators are of no value to them. The same could equally be said of price action. You might do well with it while another member dismisses it as a waste of time. Horses for courses. So, a better question to ask is 'do you work and what works best for you?' Unfortunately, only you can answer that one!

Tim.
PS. If this doesn't make a lot of sense, please read the 'Essentials of First Steps' Sticky as all of this is explained in some depth there.

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There are no wrong questions, only wrong answers.

Shakone said:

There are no wrong questions, only wrong answers.

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So, as part of my answer to the question is that the wrong question is being asked, are you saying my answer is wrong?
:cheesy:

Scotty2Cues said:

The other 'simple' alternative is trend trading. Wayne Jackson uses this and trades Eur/usd only! Simple system that works although he knows his fundamentals. Also on forex factory, called 'Jacko's Forex House of pleasure and pain'

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Apparently that Wayne Jackson guy has done a runner with a couple of million quid that he took off people from forexfactory.com

You could probably ignore his teachings.

Price action works, have no doubt about it, but you may understand its a technique which as anything else in these world has to be learnt and practiced.
Robots do not use it for a simple reason, robots are brainless and PA requieres a lot of desition making and at least some brains.
Why does it works?, its a simple question, it works because there are lots of traders looking at the same charts, which in fact show the same behavior, so we all look the same and we make basically, the same desitions, remember these is a perfect market.
Banks use it?, of course they do, they use as many tools as the can have available, these is a business and as a bussiness your success depends on the quantity and quality of tools available to you.
Just be patient, its a technique, you have to study and learn before making a successfull use of it.

I have all of my trades based on price action, momentum, indicators and patterns. And I have been doing this for almost seven years now with ups and downs in my trading career. So yes, price action definitely works! but it will works only if you master it and it should be combined by other technical discipline that suits you the best.

Beg your pardon...., you said "other technical discipline", PA is a technical discipline bv itself, maybe whay you mean is to trade different trading techniques such as intraday, swing trading, scalping, etc...., if i am rigth your advice is not for everyone since each of us must understand it own psycology to understand which trading better suits for each of us then only EXTREMELLY skilled and experienced traders (i am not one of them) can succesfully skip from one technique to another, personally i am a swing trader and a trend chaser, i have used fundamentals with a lower rate of succes than with those methods so only at extremely obvios market situations i use fundamentals, i avoid very short therms because i always lose, people who uses very short therms have a very specific behavior and psicology, its not for me, i am on the bush now, what i am trying to say is that despite the kind of trading anyone can execute (day, intraday, swing, fundamentals, so forth ) PA is a very good and reliable point of departure, you need nothing else. That is ony an opinion.