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sds - I attempted to write a response earlier and got an IE error and off it went... that is frustrating. I'll try to retype it again here...
You will probably get a few responses, so make sure to read each one and you can see what you like.
PRICE ACTION: For me, price 'action' simply refers to the amount of trading activity or lack thereof. The more 'action' the more movements we usually see. There's action going on all day, but some are more active than others.
PRICE ACTION S/R: This would mean the amount of trading taking place at important levels. Many traders use Support/Resistance Levels, Pivot Levels, etc. to define areas of possible trade setups. Usually these are areas where good 'fights' and price action may occur. Pivot provided a great chart here: http://www.traderslaboratory.com/for...-candles-2.png You can see that he annotated the first doji on high volume and then a subsequent hammer at the same level on high volume. This would show that the bulls are clearly defending this area and that the bears are not willing to push it down further. So, that would visually tell us that this level is important to many bulls. So many that they are willing to step in to a bear charge and fend them off. This in turn created the double bottom formation that many traders use. If interested in S/R levels, I would recommend reading some books from Steve Nison as he talks about S/R levels in conjuction with candlesticks quite a bit. And Pivot provided a real example here.
Speaking more on this topic, I personally use VBC charts - http://www.traderslaboratory.com/for...ofit-1414.html - in my analysis. I prefer charts like this, some like minute charts with volume broken out as in Pivot's example.
JUDGING ACTION AROUND S/R: In Pivot's example, we see a doji and hammer at the same level with high volume. That would be reason enough for me to take the trade. How you filter the action around S/R levels is up to you. Some may add an indicator, some may add market profile, etc. etc. |
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Thanks for your explanation, brownsfan019.
This post has definitely given me a direction to start thinking.
To be honest, it has really given me start.
btw, I love your emphasise on the simplicity in the trading.
sds.