[Cerberus]

Originally Posted by fxtrader12 »

lol,

The main issue with price action lobbists is that they never finished studying what indicators work well.

Here is a study that sheds some light. Seems one does have a slight edge
with candle formation recognition. But who knows, study was done some 15
years ago so meantime markets have changed with new forces /machines in
play.

http://www.pitt.edu/~caginalp/Paper65.pdf

[equtrader]

Originally Posted by Cerberus »

Here is a study that sheds some light. Seems one does have a slight edge
with candle formation recognition. But who knows, study was done some 15
years ago so meantime markets have changed with new forces /machines in
play.

http://www.pitt.edu/~caginalp/Paper65.pdf

Yes, the catch is that this study relied on data in a period that TA worked much better and candlestick formations were not fully exploited. I have given links to more recent papers that find no edge in using candlesticks

http://www.traderslaboratory.com/for...tml#post121101

As I have said before there are hundreds, even thousands, of profitable price patterns that do not resemble to any known candlestick formations and they may provide some edge. An example is the price pattern in this blog SPY Found a Crutch and is Thinking of Making a Move | Price Action Lab Blog

[fxtrader12]

The term "price action" is meaningless. Price performs action of moving up or down. The resistance/ support lines don't derive from price movements for they can be drawn anywhere with potential of price crossing it, avoiding it or oscillating around it. There is no inner intelligence in price patterns.
Some intelligence can be drawn from from indicator's patterns (i.e. ema's crossing etc).
Among some reasons why price avoids resistance line, would bounce from it
or break thru it are algorithms used in computations of averages (ema's) and volumes (limit and market orders).

[equtrader]

Originally Posted by fxtrader12 »

The term "price action" is meaningless.

Maybe you should say that it is meaningless to you. But many famous traders have used it and believe in it. So do we take your word for it or that of some famous traders like LBR, L. Williams, Michael Harris and so many others?

This is well-documented evidence by one of the above famous price action traders that S&P 500 patterns included in a book he published in 1999 worked well for a period of 10 years after their public disclosure.

[fxtrader12]

[...] So do we take your word for it or that of some famous traders like LBR, L. Williams, Michael Harris and so many others? [....]

What is your problem?

[wrbtrader]

It's always amazing how someone using price action will argue with someone using indicators that indicators don't work. Just the same, its amazing how someone using indicators will argue with someone using price action that price action don't work.

I've watch traders in live trading in front of my own eyes using price action profitably and others using indicators profitably. The only commonality they have is that they aren't fools to believe that its their indicators "exclusively" the sole reason why they are profitable or that price action "exclusively" the sole reason why they are profitable.

You guys seem to forget that profitable traders rely heavily on market experience, trading experience, market context, money management, position size management, proper trading environment and many other things in a trading plan that's often forgotten in these silly debates about "indicators versus price action".

In fact, the one thing I've seen in the few profitable traders I've had the opportunity of watching them trade in person on a consistent basis is that those other things (mentioned above) that's often forgotten in these types of debates...they are critically important to profitable traders. In fact, on any given trading day, its those other components of a trading plan that's more important than any indicator or price action setup.

Simply, if you're consistently profitable using indicators or price action...don't be a newbie nor naive in believing you're able to do such without those other critical components of a trading plan that's mentioned above.