Price Action / Lagging

[badtrader]

I here traders talking they only trade price action and they dont like indictors, dew to lagging Surely watching current price action is only of use in its relation to previous price action? A single bar is of no use by itself, it has to have some context of a few previous bars, and is therefore similarly 'lagging.' Even your breakouts are lagging since they depend on previous s/r levels.

If traders say they trade price action, you would wait for a bar to draw, and based on what the bar looks like, you trade off it. So would you not, call this Lagging.

 

[jezza888]

The more I think about it recently the more I'm siding with you there... neither price action nor indicators seem more consistently forward indications to me...

 

[Spcboe]

This is a great subject. Hopefully those succeding with it will reply here. There are several ways of trading price-only. The method I have been progressing with finds the trend. From there you determine failures/breaches and support /resistance. I am still learning but I know it is a very viable method of trading successfully.
Anyone out there care to clarify price-only trading??

 

[fxmarkets]

maybe just look at bid/offer quotes and jot down the price every so often for a few weeks you may see or sense how price reacts, with no charts or such to draw your mind ?

 

[Spcboe]

you may see or sense how price reacts,

Do you mean see how it reacts to different price levels? Sorry if it's a silly question.

 

[fxmarkets]

how it reacts to itself, you will begin to see or sense and know when its stopped falling, when its churning and the rest, but because you will immerse in it you will know at what numbers it reacts call it support if you like but not a line on a chart just a number in your head. you'll begin maybe to build a base of numbers over days and weeks, try it and see, after many hours/days you begin to get in tune with it. you may then decide if you are suited to it or just another observation tool .

Begin to feel the pulse of price if you like that sort of thing.

 

[fxmarkets]

im sure it will be a worthwhile exercise, just pick one market, and put some time into it, jot down every 5 mins on days that you manage time to commit to it, by all means after pull up a chart and see if the chart matches what you felt noting the price, pulses, rallys drops, churning. maybe after a few days mark next to the prices you are noting down, long, stop, close trade, s/r etc. and see your results. you'll probably be able to hold a lengthy discussion and replay the days price action from memory. Im sure to some degree we do this just with charts but if you take them off and immerse in price greater clarity/intuition may develop and over time ,result.

 

[Trader333]

I here traders talking they only trade price action and they dont like indictors, dew to lagging Surely watching current price action is only of use in its relation to previous price action? A single bar is of no use by itself, it has to have some context of a few previous bars, and is therefore similarly 'lagging.' Even your breakouts are lagging since they depend on previous s/r levels.

If traders say they trade price action, you would wait for a bar to draw, and based on what the bar looks like, you trade off it. So would you not, call this Lagging.

I am not sure what your issue is here. Those who trade on price action will reference this to past price action where (as you have already said), breakouts or S/R and other patterns can be observed. The only real prerequisite for those who trade price action only is that indicators are not used. I dont trade FX and the main reason is that I need volume as a complement to price action. That said I have seen others plot tick volume on FX and this maybe something that I will look at in the future.


Paul

 

[badtrader]

I am not sure what your issue is here. Those who trade on price action will reference this to past price action where (as you have already said), breakouts or S/R and other patterns can be observed. The only real prerequisite for those who trade price action only is that indicators are not used. I dont trade FX and the main reason is that I need volume as a complement to price action. That said I have seen others plot tick volume on FX and this maybe something that I will look at in the future.


Paul

You are saying, you need volume as a complement to price action. By waiting for a volume bar to be drawn, before you place a trade, you may call this lagging.

With respect Trader333 Inicators is also based on price action, The question is what is the difference. In my opinion the two are the same. The same with Volume you are waiting for confirmation before you enter a trade. So everything thing one does in trading is lagging in some way.

 

[jcwonder8]

just to add.i make this point to all my traders.with 1 min time frames.yes ..if traders wait for the bar too close to make a trade the entry is later than someone who uses say a 2sec chart to fine tune a trade.i use 1 min charts as my market baseline and use 2,5sec charts and some other charts to take entries with respect to the 1min chart.this way the "waiting for bar close" lag is minimised.on top of that it is possible to time turns in market consistently to within 1-3 pips if you can read the buy sell pressures through the understanding off how other will trade next.use a micro time frame and learn who,why and what positions have been taken by reading the volume.then after time you will also be able to anticipate there next move.
people say say 1 minute charts etc are noise...i say rollex to that.....every trade is there for a reasoin ...you cant trade or read 1 min charts or lower ?....then you lacking knowledge.people bleat on about saying this and that is impossible on forums...and call anyone who can a liar because off there own shortcomimgs.i say get off your arses,throw away the ego and make it possible.with knowledge noise becomes music.......got a bit sidetracked there again cheers mark j

a great post mrmarcus, I am glad to see you are posting again, this says its all, all the money is in the daily swings which can most profitably traded at the 1 min or equivalent volume/tick charts, big money moves in and out before the close of 1 or 5 min bars giving you a worse price if you wait till the end of a fully loaded bar. If you are a newbie scroll through mrm's history for a couple of great chart annotated posts setting out some of the basics of what he is doing.
I noted in your ealier posts that you sometimes looked at the ym futures premium over the cash as an aid to decision making, if your thoughts on this aren't proprietary I'd be interested, if they are thanks anyway for the great posts and insights so far.
Cheers
jc

 

[Finlayson]

well everything is relative isnt it. indicators are lagging to the price & I guess price action is lagging to a few things, market sentiment etc....but you have to use what u can use....until I can predict the future the market price action is the most up to date thing I can find & use....& then it is down to your time frame .

if you can anticipate a market turn down to a few ticks, fair play to you. again it comes down to style of trading(no right or wrong way).

for me price action is the most up to date indicator..........but then that can include many price time frames etc. like playin a ball game I find the best way is to keep your eye on the ball.....try & predict to much your just left standin lookin like a T**t havin missed the ball.

anyone has a better way I would be glad to hear it

Jay

 

[Trader333]

You are saying, you need volume as a complement to price action. By waiting for a volume bar to be drawn, before you place a trade, you may call this lagging.

With respect Trader333 Inicators is also based on price action, The question is what is the difference. In my opinion the two are the same. The same with Volume you are waiting for confirmation before you enter a trade. So everything thing one does in trading is lagging in some way.

When I said that I need volume this again is not in isolation but as part of the overall picture of price and volume action and, as has been said, relative to what has already happened. I have gone through several phases of trading development and at one point used indicators extensively. As time progressed I found that it was less effective than focusing on price and volume. This is not to say that I exclude indicators entirely as I use them as a means to alert me to possible trading setups. What I dont do is use them as a basis to enter any trade at all as once I am alerted then I ignore the indicator and make decisions based entirely on the price and volume action seen. The only other factor is Level II as my favoured instrument to trade has been US stocks and I use this as a means of reducing risk at entry. This is obviously not something that can also be used for trading FX.



Paul

 

[badtrader]

I posted this on another thread, as we are talking on Volume, maybe someone can answer me this question, which does my head in.

http://www.trade2win.com/boards/showthread.php?p=208787#post208787

I have traded the YM by buying the bid to go long, just to cover commission. and it dont have to trade through the bid to get a fill. You just in a quew,and sometime you get filled other times you dont, But if it trades through the bid you 100% get filled

Anyway the question to you Volume fans. If you buy at the BID does it show up on Volume that you are a buyer. or seller.

That's the thing when you looking at the order book, you dont real know what everyone is doing when buying or selling. when you get traders buying the BID and for sells Selling the OFFER. If 50% are buying the bid and 50% are buying at market, does it show up in volume what they are doing. Few!! I bet to stop it confusing me now

 

[Finlayson]

As I said M...fair play to u & anyone who can...Tick charts can be valuable things to the person using them..I have used them on dax

Whatever anybody is using...if they are comfortable & taking money off the table then good on them.

'what comes out is what is inside...its not the one who does the squeezing'

Regards

Jay

...just to pick up on this statement

"if you can anticipate a market turn down to a few ticks, fair play to you. again it comes down to style of trading(no right or wrong way)."

...this is no way trying to big myself up or to put anyone down..just to give perspective,encouragement and an **** kick or two..id like to just discuss this statement i hear quite regularly.i used it as a catalyst to air a few witterings and is not directing at anyone in particular.we are in a game,a sport,the person with the most points wins sports,a person who possesses the abilities to read the market more accurately than the next guy takes the most points .a person who therefore takes most points on a consistent basis possesses better market knowledge end of day than his competitors.so there is definitely ways of being more right shall we say.this is fact.
anyone who says they wouldn't want to take market tops to withing 3 points,instead of say 10 points is a fool to them-self.if i come across a trader who can call market tops to 1-2 pips....then thats awesome...im gonna say kudos to the geezer and want to learn from him if hes/shes willing to share.ego ...the stumbling block to progress.
another point.i always find it amusing when people call themselves swing traders,and end up with these severely expanded stops.the same principles apply on all time frames.this approach is a cop out for lack of accuracy.when i swing trade i use a 5 pip stop just like any other trade.if the market isnt ready to break my way.....do i really want to hang around and find out how not ready it was?...hell no.....stop me out twice out of three trades on a 5 pip stop any day.....instead of waiting for it to hit a 30 pip stop.
i say again....empathy and knowledge leads to being able to anticipate a market to greater accuracy...smaller time frames confirm this knowledge...tick charts,2,5,15 sec ...whatever.
you wanna learn how to not lag a market....get into other traders minds.....get those skills ...its all out there.....but not in forums.now its time to trade...enough talk for a few months...happy hunting.
cheers mark j

ps..... not personal just an observation

 

[Trader333]

I posted this on another thread, as we are talking on Volume, maybe someone can answer me this question, which does my head in.

http://www.trade2win.com/boards/showthread.php?p=208787#post208787

I have traded the YM by buying the bid to go long, just to cover commission. and it dont have to trade through the bid to get a fill. You just in a quew,and sometime you get filled other times you dont, But if it trades through the bid you 100% get filled

Anyway the question to you Volume fans. If you buy at the BID does it show up on Volume that you are a buyer. or seller.

That's the thing when you looking at the order book, you dont real know what everyone is doing when buying or selling. when you get traders buying the BID and for sells Selling the OFFER. If 50% are buying the bid and 50% are buying at market, does it show up in volume what they are doing. Few!! I bet to stop it confusing me now

Time and Sales will show if the volume is on the Bid or the Ask but to be honest, (and to put it in relatively simple terms), the most important part of volume for me is how wide the price spread is on the bar in question and where the bar closed in relation to price and volume action to the left of the current bar.


Paul

 

[badtrader]

...volume never shows if your a buyer or a seller....it merely states how many transactions have been completed.if however your talkin about bid ask volume.....this shows the number of trades which were executed on either side..be it buying at bid or whatever.it is up to the user to decipher this information and work out how much was buying at ask....dumping at ask etc.....empathy again.as for your example it is possible to work out buying at bid etc...know the conditions which allow this to occur ...from DOM etc and you see the opportunities clearly which will reflected in bid ask volume.attached a typical chart i work with....5sec with delta,bid ask volume and pure volume
.
cheers mark j

Thanks for that mr,marcus,I can see what you are looking at, as your chart shows the buy volume and sell volume dont have this on my charts. what charting package do you use to get this.

On you chart where you got Red volume suggestion selling pressure, But still you could get new traders going short by selling the ask. But would this shown up on you volume chart as a Red sell.volume.AND TO OTHERS IT LOOKS LIKE SOMEONE IS BUYING.So we still none the wiser.to who doing what.Or am I being to critical.

 

[Trader333]

Thanks for that mr,marcus,I can see what you are looking at, as your chart shows the buy volume and sell volume dont have this on my charts. what charting package do you use to get this.

On you chart where you got Red volume suggestion selling pressure, But still you could get new traders going short by selling the ask. But would this shown up on you volume chart as a Red sell.volume.AND TO OTHERS IT LOOKS LIKE SOMEONE IS BUYING.So we still none the wiser.to who doing what.Or am I being to critical.

In my view you are too focused on one part of the story and one which is of secondary importance to:

1) The total volume traded in the bar you are observing

2) What the spread of that bar is

3) Where the bar closed

4) All above relative to previous price and volume action.


Paul

 

[chump]

Interesting ..."empathy" ...that's exactly what I was talking about when I started this thread ...
http://www.trade2win.com/boards/showthread.php?t=15687

Until I started thinking in those terms I could understand little about market action ...after that all of the one-off things I had read started to make sense on the chart.

 

[badtrader]

In my view you are too focused on one part of the story and one which is of secondary importance to:

1) The total volume traded in the bar you are observing

2) What the spread of that bar is

3) Where the bar closed

4) All above relative to previous price and volume action.


Paul

With respect Paul. It comes back to my original question, regarding trading price action. what you said above, (yes is valid,) but still comes under Lagging because you are waiting for the Volume bar and price bar to be drawn. The reason I started this thread, was to see if the Price action traders would come out of the wood work. and explain the difference between price action and lagging indictors .My personal view is, everything we look at on a chart to take a trade is Lagging in some way.

Marcus could you tell me what charting package do you use. thanks

rgs

 

[fxmarkets]

hmm, technically there is a lag, on a rolling basis, but you can minimise it by acting and not lagging or hesitating yourself, what size or type of lag are you imaging badtrader, 1 second or so ? its not a great chunk of time but if you lag on top of this yourself or hesitate then the price can often be a further 1 or 2 times your typical spread out from you and if you time it right or are in sync very well with the market then it wont be coming back for you , But weve all probably had trades when you have entered and it has perhaps stalled or spread tic against you, sometimes i think, sense everybody else just hasn't cottoned on yet that its changing direction. 60 seconds is a long time.

Of course when completely wrong then your tight stop does the job.