Price Action Trading Method.

[vikrit]

Yes, BBands are good, they act as dynamic support and resistance very similar to moving averages. so you can use it. It combines the best of moving averages and principle of standard deviation.

Look for pinbar breaching the bands , they are the best.

Just don't use it in trending markets, you will get slaughtered.

and how to know whether market is trending or not, to follow above guideline??

 

[TraderDude]

and how to know whether market is trending or not, to follow above guideline??

There are many ways to look at the market. Trending or ranging depends on the time frame you are look at.

It should not be difficult to tell if a market is trending or ranging. Market move in trends and range and then again in trend and range.

You must understand why this happens? This ranging is nothing but accumulation or distribution by smart money. But we can't tell if they are accumulating or distributing. Only once the range is broken(break outs) do we know the direction of market. But in essence this is how ALL market move. Trend -> Range -> Trend -> Range .....

The smart money cannot buy the stocks all at once(spikes in vol) , because then we will know what will be the direction of the market looking at volume. So they accumulate or distribute in these ranges , that is why it's hard to trade these ranges. They know how to take your money, that is why it's called "smart" money.

simply select the time frame you are trading and keep zooming out until the pictures becomes clear.

But technically, if price is making Higher higher/lower lows and higher lows lower highs , we are trending.

If we see market is not going in any particular direction , we are ranging. Every range has a top and bottom. you must wait until you see a range , only then you can call it a ranging market. Once you can see the range clearly. look for price action at the top and bottom of the range.

But also note that ranges keep shifting , this is what i mean by Trend -> Range -> Trend -> Range ...

Hope this answers you question.

 

[vikrit]

...............many ways .................

.............not be difficult to tell if a market is trending or ranging. Market move in trends and range and then again in trend and range.

.............................
simply select the time frame you are trading and keep zooming out until the pictures becomes clear.

But technically, if price is making Higher higher/lower lows and higher lows lower highs , we are trending.

..............
Every range has a top and bottom. you must wait until you see a range , only then you can call it a ranging market. Once you can see the range clearly. look for price action at the top and bottom of the range.

But also note that ranges keep shifting , this is what i mean by Trend -> Range -> Trend -> Range ...

...........

don't you think, this answer leads to a indecision circle....

read bold lines, agree range is having top and bottom, but top and bottom only get confirmed when at least next candle close in reverse. same for range confirmation. so, how 'the guideline" to use BB in range market executable. also, while ranging market, many times pinbar breach happens, market cross it quickly and show a trend.

so, what i wanna ask, if in zoom out a market is ranging, to stop using BB, exactly how we know trend starts, most probably you will say breakout etc etc. ok, that's why we use SL; our SL will hit, and we will stop using BB as trend confirm.

now i think, right question is- how to know market is going to range so will start using BB (BB+PA)?

 

[TraderDude]

you cannot tell using any indicator that market will range or trend. We most do not concern ourselves with what the market condition is, because the condition can change anytime. What triggers these change in conditions is Price Action at confluence.

That is why we look for confluence at key levels. these key levels could be in a trend or a range. If we are looking at a ranging market , it already is simply because that what the market is doing.

Do not rely on BBands for anything, they are used only to add to our confluence. Price usually bounces off in these Bands, so this helps a little bit in identifying ranging markets. Sometimes the range lasts for a long time ,sometime short.

If you are looking to trade ranges using BBands and PA , it is not the best idea.

Like i said keep things simple. First look for Price action at key S/R levels. See what is the Price doing there. We only use BBands to see if there a breach in the band. This stacks odds in our favor.

I don't know if this answers your question, but keep asking...

 

[Laksh]

@TraderDude,
What is the charting s/w you are using? What are the scan parameters that you use?

Laksh

 

[TraderDude]

@TraderDude,
What is the charting s/w you are using? What are the scan parameters that you use?

Laksh

Amibroker for charting. manual scanning. No exploration, if that's what you mean by scan parameters.

 

[vikrit]

you cannot tell using any indicator that market will range or trend. We most do not concern ourselves with what the market condition is, because the condition can change anytime. What triggers these change in conditions is Price Action at confluence.
..............

Do not rely on BBands for anything,.................

If you are looking to trade ranges using BBands and PA , it is not the best idea.

We only use BBands to see if there a breach in the band. This stacks odds in our favor.

I don't know if this answers your question, but keep asking...

didn't ask/say how to know trend with the help of indicator. or you wanna say one can't know at all about market conditions. other statement (blue) also is itself a contradictory one to earlier one in which you said to use BB in range. not getting without knowing conditions, how one will decide whether to use BB or not.

actually, many people in forum(s) advise this, use this in range, use that in trend. but to whomsoever i asked till now could not able to tell how to know before hand market condition to be ready with right thing. maybe they can do it, but couldn't explain it.

anyways, right now nothing more to ask, just wanna tell a story -

The Trap Story​

once i was telling someone to use rabbit trap for rabbits and deer trap for deers to catch and eat, and other person asked how to know who lives in this jungle. i said watch, see face and body, and gave all description about the structure. other person said ok, i have watched, found both lives in this jungle, so which trap i should use.

I said, it depends how much hungry you are and which one you want/like to catch. as he knew and already learned it takes time to setup deer trap, and also it is costlier. so without being greedy, he installed a rabbit trap, and keep watching. but his bad luck, the animal came out was DEER, but he can't setup deer trap now, in front of his eyes deer took his carrots & ran. and he left hungry, upset.

now, he concluded that in this jungle deers are more, so next time will setup deer trap, but he was afraid. then he remembered reading somewhere, you have to give/loose something to gain something. so, controlled his fears and set a deer trap, hide to watch it. after some wait what he hear leaf sounds, someone is coming towards his trap, as per sound's volume he was assuming it to be a DEER. he was excited and happy that this time he will get something. then he hear eating sounds, sat tight to listen clenching sound, but it didn't came, when he came out to see what's going on, he saw a rabbit running with his bait.

now, he was so angry, cursing his luck, felt so upset. He asked me, how i do hunting with traps, i said see them and take action. he asked, 'but how to setup a trap after seeing them'. I said,'oh! traps! they are not reliable; search, watch live and shoot them'. he was confused asked,'but, at the time giving advice about which traps to use, you didn't tell, they are not reliable'. I said,'..............

............... contd

p.s.- plz don't mind, i find it easy to explain things thru stories. i am using BB since 1.5 years, i found them good in trend & range both, that's why after reading your advice thought maybe i am doing something wrong. thanks for all responses.:thumb:

 

[ethan hunt]

NF freak low = 5175 = pin bar

will it go to 5175 eventually or pinbar will make it go up ?

 

[TraderDude]

@Vikrit,

I find it difficult to communicate through any forums, so i don't blame you for not understanding me.

I guess to discuss matters on technical analysis , we need to communicate in person or via skype.

What if i told you none of the indicators are reliable in any market conditions. Would you still use that indicator?

I am not expert in BBands, so maybe you are asking the wrong person.

Anyways, may be some day i will setup skype sessions and we can discuss over it.

Forums are just not the best place to make things clear. They are just a very bad medium for anyone to express one's thought clearly or may be my communication is just very bad.

 

[sanjn84]

sir can u give me some directions on price action or can u refer me to some material to learn on it
thanks for support