Trading with PA "No Indicators"

[drsushi]

i will have to post a chart tonight to show you what I mean.

David

[drsushi]

Here is a chart of a possible trade. I did not take this trade and at the same time of trying to avoid cherry picking a perfect example, I also wanted to show and example that would explain the concept. I forgot to draw in the possible stop, but it could be just below the HL on the 16tic below entry or just at or just below the pivot if entering sooner.

The 4 to 6 tics I think is an acceptable profit target. I'm not sure if i'm understanding your comment. If 4 tics is not an acceptable profit target then it wouldn't be worth even trading. The idea is to have say 3 contracts and with a stop just below or above the previous low or high. The stop could be 1-2 points. If I hit my first target of 4 tics moving the stop to BE-2tics seems reasonable. Could go to BE or BE +1. Or, if second target is hit then move the stop to BE. From what I have learned, and I will say maybe the most valuable thing I learned from TTM is reduce risk. The fast we can get the stop to BE, of course with out getting stopped out too soon the better. In the attached example the trade played out in a positive way. The last third can be exited on some criteria or, manage it anyway you want moving the stop to preserve profit. I don't know the best way.

The Sanuk Group on Google talks about this method and many or most of the traders in that group trade with price action in this manner. They may use volume bars or minute charts, but many of them speak of this method. I am just presenting here, but it really hit home with me. Anyway, I've gone on long enough. Feel free to comment. One last thing. I do like to use the Volume Delta OSC that someone created on TL. It shows divergences very nicely and can give a heads up to a turn. Also, the way price action was explained to me is that its the buyers and sellers going at it and one of them will take control which in depicted in price. This makes sense to me.

David

[mister ed]

This is an interesting topic. I hope this input is not too far removed from it...

I think if an indicator can show a certain aspect of price &/or volume &/or time behaviour that you believe is important then it should be used. If you can look at price &/or volume &/or time and trade/invest without the aid of any 'indicator' then that is right too. I actually believe that the better a trader gets the more likely it is she (or he) will use only price, volume and time. I suppose my point here is that there is no one right and wrong way.

I say all this because up until recently I have been a 'no indicator' believer (not because I am one of those good traders - far from it). But I have recognised I need to see a relationship between price and volume that my price and volume charts were not showing me clearly, and so now I use an indicator to help me see that relationship. I think the key to using an indicator is to fully understand what it is showing, fully understand the mathematics of its calculation (most indicators are simple enough for me to understand the maths...so anyone can!) and fully understand it limitations and constraints. I would also add that my use of the indicator does not extend to it being the buy/sell trigger - I would be interested if anyone does use an indicator in this way as I believe the entry and exit decisions comes from price alone.



Another point - what is an indicator?
I use the volume at ask minus the volume at bid on my charts - is this an indicator? I think of it as data generated by the market, it only becomes an indicator if I do something like apply a moving average to it.

[BlowFish]

	Quote:	brownsfan019
	And of course the next question is - what levels do you use and why? Use them all and your chart will look like a mess of horizontal lines everywhere. If you put enough lines on your chart, some will look like they nailed the HOD or LOD. Some will just get in your way.

Yup absolutely agree you can end up with lots of lines depending what you use. Just using highs and lows off an hourly can end up with lots. Picking the right lines can be a bit of an art. It's not hard exactly as with all things it needs experience (work) Looking for 'clusters' is not a bad idea, these form if a price has been tested a lot.

	Quote:	brownsfan019
	And the follow up question: are static, fixed lines that are based on YESTERDAY'S price action good for determining TODAY'S price action? Food for thought.

The answer to that is an un-qualified YES. Are they good for predicting todays action the answer would of course be NO. My favourite example the good old floor pivot, yesterdays H+L+C/3 is a simple but effective sentiment indicator. Price above bullish price below bearish. Simple.The 50% spot 'works' good too H+L/2. As does the PoC. etc. etc. No predictive value but gives a clear and un ambiguous indication of "where you are".

As an aside. In the S&P, 70% of days, price will come within 2 ticks of the floor pivot. Heres the interesting thing the stats are very similar on an hourly chart or a 30 minute chart (using the previous bars 'pivot') this suggests to me there is some inherent usefulness in the number rather than being self fulfilling because everyone is watching.

Anyway sorry for drifting off topic but you did ask the question.

Personally I think using PA (be it candles bars or maybe VSA) to determine what is happening in areas where things might happen (previous S/R, MP etc.) Is a fantastic way to trade.

Cheers.

[torero]

	Quote:	drsushi
	Here is a chart of a possible trade. I did not take this trade and at the same time of trying to avoid cherry picking a perfect example, I also wanted to show and example that would explain the concept. I forgot to draw in the possible stop, but it could be just below the HL on the 16tic below entry or just at or just below the pivot if entering sooner. The 4 to 6 tics I think is an acceptable profit target. I'm not sure if i'm understanding your comment. If 4 tics is not an acceptable profit target then it wouldn't be worth even trading. The idea is to have say 3 contracts and with a stop just below or above the previous low or high. The stop could be 1-2 points. If I hit my first target of 4 tics moving the stop to BE-2tics seems reasonable. Could go to BE or BE +1. Or, if second target is hit then move the stop to BE. From what I have learned, and I will say maybe the most valuable thing I learned from TTM is reduce risk. The fast we can get the stop to BE, of course with out getting stopped out too soon the better. In the attached example the trade played out in a positive way. The last third can be exited on some criteria or, manage it anyway you want moving the stop to preserve profit. I don't know the best way. The Sanuk Group on Google talks about this method and many or most of the traders in that group trade with price action in this manner. They may use volume bars or minute charts, but many of them speak of this method. I am just presenting here, but it really hit home with me. Anyway, I've gone on long enough. Feel free to comment. One last thing. I do like to use the Volume Delta OSC that someone created on TL. It shows divergences very nicely and can give a heads up to a turn. Also, the way price action was explained to me is that its the buyers and sellers going at it and one of them will take control which in depicted in price. This makes sense to me. David

My point was 1 pt (or 4 ticks) is acceptable, but moving to breakeven after such a small push forward is too close, and from my experience trading ES (and I tried scalping it and failed miserably at it) in the past, there will tendencies to hit breakeven alot. But others seem to do ok, go for it.

What I am saying is let the market dictate where the stop level is and not choosing to breakeven you determine; the area you choose to by a fixed amount will have a likelihood of get hit is high. If this is the case and you're scalping, you'll be paying lots of commissions and little profits. Just my opinion and experience.

[brownsfan019]

	Quote:	BlowFish
	As an aside. In the S&P, 70% of days, price will come within 2 ticks of the floor pivot. Heres the interesting thing the stats are very similar on an hourly chart or a 30 minute chart (using the previous bars 'pivot') this suggests to me there is some inherent usefulness in the number rather than being self fulfilling because everyone is watching.

Interesting BF - can you provide some info to substantiate this? You got my curiosity now.

Also, silly question - what exactly are you referring to as the 'floor pivot'. I think I know, but some clarification would be good so we are on the same page.

[BlowFish]

	Quote:	brownsfan019
	Interesting BF - can you provide some info to substantiate this? You got my curiosity now. Also, silly question - what exactly are you referring to as the 'floor pivot'. I think I know, but some clarification would be good so we are on the same page.

Hi Brown by floor pivot I mean yesterdays (H+L+C)/3.

Short answer is no I cant. Funny, it was exactly the same sequence that got me to check for myself. Basically someone said to me 70% of the time blah blah blah... I thought hmm thats intresting and went anyway thinking about how I could prove it for myself.

I got a few years H L C data into excel, put the calc into another cell then tested to see if H or L hit the calculated pivot. I guess theres an outside chance the spreadsheet is hidden away somewhere, I'll keep an eye open for it.

Cheers,

P.S. Sorry that this is still a bit off topic but couldn't resist this chart of todays ES showing price turn of the PP to the tick. Obviously this is partly self fulfilling but its kind of neat when its this clean. PP is horizontal red dashed line.

[brownsfan019]

	Quote:	BlowFish
	Hi Brown by floor pivot I mean yesterdays (H+L+C)/3. Short answer is no I cant. Funny, it was exactly the same sequence that got me to check for myself. Basically someone said to me 70% of the time blah blah blah... I thought hmm thats intresting and went anyway thinking about how I could prove it for myself. I got a few years H L C data into excel, put the calc into another cell then tested to see if H or L hit the calculated pivot. I guess theres an outside chance the spreadsheet is hidden away somewhere, I'll keep an eye open for it. Cheers, P.S. Sorry that this is still a bit off topic but couldn't resist this chart of todays ES showing price turn of the PP to the tick. Obviously this is partly self fulfilling but its kind of neat when its this clean. PP is horizontal red dashed line.

I appreciate it BF.

This should really belong in a new thread b/c it's a great tool to watch.

[email]

Hi Guys,

Is this thread still alive, if so, I would like to make a few comments.
Cheers,
email

[brownsfan019]

	Quote:	email
	Hi Guys, Is this thread still alive, if so, I would like to make a few comments. Cheers, email

You can bring it back to life email! Have at it!