[Jumper]

Hi,

For those of you out there, what ACTUALLY is tape reading, in our day and age? What do you think trading off "price action" means? 1min chart with DOM? Tick charts? T&S?

I have a dilemma, all indicators I have ever used are completely useless, when it comes down to it, they might look fancy in hindsight, but thats about it. So I tend to try to stick to clean charts, 2m with volume and DOM, trading mainly index futs. What exactly is tape reading? Is using a time-based chart wrong for this because of time itself pushing the chart through, so you get a distorted perception? True price action would be something that is PURE price moving by itself, when it wants not being forced to draw empty bars/candles on a time based chart etc? Wouldn't it?

I'm just interested to hear from those who ACTUALLY know what they are talking about, that have the experience, that can share with us what trading is actually all about, most successful traders I have seen, and this is personally, from my own experience, have been traders who scalp or trade with just price action, reading the order flow, watching for the bigger players etc It seems to me that its the 90% that get it wrong that are the ones that use MACDs, RSIs, MAs etc. Does it even matter what method/indicator one uses? It seems as though it doesn't, indicators seem to be of not much use if you ask me, so there has to be something else at play?

Would be glad to hear some refreshing honest insights/knowledge about what it actually takes to read price action, what it takes to trade properly, the things that one should be looking out for etc.

Please dont turn this thread into a fight fest, or a puff your chest up contest.

Jumper.

[DugDug]

One recurring theme that will constantly pop up from many traders is that price action is all you need and indicators are a waste of time. Personally, they are just tools derived from the price action so if they help - like any tools then great - otherwise spending countless hours looking for the holy grail is a waste of time.

Trading off price action is a combination of watching the market as its trading and then putting the current flow of the market into context - uptrend, downtrend, resistance, support - in which certain repeatable patterns can be followed. these patterns may only offer a 50-50 chance of ideal success (that is they will be profitable) but with proper trade management of cutting losses and running profits on a good risk reward ratio, then, taken over a series of trades you should be profitable.
No indicators, no hope, no second guessing - just simple planning based on setups which will will be profitable if the pattern fits the ideal result.

[Head2k]

If you want to learn how to trade price action, then study Wyckoff Forum. Start with stickies there.

[atto]

Price is created by transactions. Price action involves study of price's movement. Technically, if you want to just watch pure price action, you'll either be watching T&S or a 1 tick (trade) chart.

Anything else is simply a summary of price. Time bars (10s, 1m, 5m, etc) simply group all the trades into time windows. Range bars do so by movement around predetermined price intervals. And the list goes on.

Few traders I know actually trade off a 1t chart or T&S, but some do. Most people prefer to look at summaries to more easily picture a larger time frame. I trade intraday based on price off a 1k volume and 5 second chart (on the NQ). Always keep in mind, though, that as you "zoom out", you're getting further and further away from pure price. Otherwise, eventually, you end up trading bars (or candles, if that's your thing), and not price. I think of price as a "flow". How you choose to summarize it, if you do so at all, is up to you.

As for how to trade price action, I second the recommendation to the Wyckoff forum. Richard Wyckoff had a very firm grasp on price action, supply and demand, support and resistance, value, and how to trade all of it.

[jonbig04]

Listen to atto, you should.

[Kiwi]

Listen to atto, you should.

and note that an indicator, like a price bar, is also a summary but with more complex relationships.

[wrbtrader]

There are different types of price action traders...the one commonality they have is they don't use indicators. However, although I don't use indicators, I'm not going to announce they are "completely useless" if I don't want this thread to turn into fight fest.

As to the percentage of losing traders...I see the same on both sides of town and both sides have simple and complex trade methods.

Regardless, there is no one type of price action only trader. I can name 10 different types of price action only traders. Thus, there's no one definition as in one size fits all because we really have sub-groups. However, if you want to classify us as price action only traders...just say we don't use indicators.

Originally Posted by Jumper »

...Would be glad to hear some refreshing honest insights/knowledge about what it actually takes to read price action, what it takes to trade properly, the things that one should be looking out for etc.

Learn to understand market dynamics such as supply/demand analysis, key market events et cetera. As to what it takes to trade properly...that should be obvious (e.g. money management, discipline, proper capitalization, proper trading platform, adequate trading equipement et cetera). I'm sure you've heard all of that before...no magic lightbulb.

Mark

------------------------------

Originally Posted by Jumper »

Hi,

For those of you out there, what ACTUALLY is tape reading, in our day and age? What do you think trading off "price action" means? 1min chart with DOM? Tick charts? T&S?

I have a dilemma, all indicators I have ever used are completely useless, when it comes down to it, they might look fancy in hindsight, but thats about it. So I tend to try to stick to clean charts, 2m with volume and DOM, trading mainly index futs. What exactly is tape reading? Is using a time-based chart wrong for this because of time itself pushing the chart through, so you get a distorted perception? True price action would be something that is PURE price moving by itself, when it wants not being forced to draw empty bars/candles on a time based chart etc? Wouldn't it?

I'm just interested to hear from those who ACTUALLY know what they are talking about, that have the experience, that can share with us what trading is actually all about, most successful traders I have seen, and this is personally, from my own experience, have been traders who scalp or trade with just price action, reading the order flow, watching for the bigger players etc It seems to me that its the 90% that get it wrong that are the ones that use MACDs, RSIs, MAs etc. Does it even matter what method/indicator one uses? It seems as though it doesn't, indicators seem to be of not much use if you ask me, so there has to be something else at play?

Would be glad to hear some refreshing honest insights/knowledge about what it actually takes to read price action, what it takes to trade properly, the things that one should be looking out for etc.

Please dont turn this thread into a fight fest, or a puff your chest up contest.

Jumper.

[Kiwi]

Actually most PA traders do use indicators.

Typically the either use the indicator called an OHLC bar or the indicator called the candlestick. But some of them use TPOs!

Ahh you say ... but they don't hide information behind complex formulae that the trader doesn't understand. But they do. I was listening to a video today by a hedge fund manager/trader who has a serious history of financial success and he described support and resistance and was discussing why in situation X he drew it at the candle bodies .. but in Y at the extremes.

And damned if he didn't say that it was because the body represented most of the price action during the candle. Now you guys are truly horrified by this because you've used market profile and volume profiles (more summaries or processing of info = another damned indicator) so you know ... all the candle body represents is the difference between the opening price and the closing price. It doesn't say that most of the activity took place in that space simply where it started and ended.

So, candlesticks, ohlc bars, market profile tpos, etc etc ... they all summarize/process the raw price info to make it simpler. And like every other indicator they confuse people - even extremely competent and successful hedge fund managers!

Unless the people take the trouble to truly understand the tools that they use. And then use them well.