Trading pure price action

Písmo: A ++ A --

Having started young and naive, I was thrilled with the idea what all those profits will do for me…

Always thinking there was some magic formula, system, methodology, or better yet, some magical Guru who had the answers. Well, had to learn the hard way… always wanted to trade for living so badly… that was my dream, just as I suppose it is a dream of many of you.

But I stumbled blindly in pursuit of that dream because I simply had to learn something, try it out, lose, learn something new, lose again, feel that pain, try & lose everything, start again, keep the faith and keep learning… NEVER EVER think of quitting… just waiting for that Moment when tables start turning around… and when this moment comes, and it WILL for most folks one day, the snowball effect usually kicks in. And then, if things keep going your way, you can CALL yourself a successful trader (if you’re that way)… or, you can SEE yourself as a successful one – and not necessarily it has to be all about money.

For me to become a successful trader starts with an extensive academic knowledge combined with intensive real time (meaning NOT-on-paper) trading experiences. Only then can you learn your strengths and weaknesses and find out what works and what does not FOR YOU. Then you can go about the task of developing YOUR OWN winning trading strategy. Yes, you read that correctly. Developing your strategy comes last in the equation. BTW, papertrading and simulated trading I have found worthless, I just wasted my time with it. Now I am not naysaying papertrading as such, I believe it is helpful and perhaps necessary tool for learning the ropes for some, perhaps many, it just didn’t work for me.

A lot of traders tell me they have spent a lifetime studying as well as trading, yet still can’t beat the game. That’s where the last piece of the puzzle comes into play: RISK. You have to be able to assume risk as well as manage that risk. Most traders are either too risk averse to ever become consistent winners or conversely, they have too much of a gamblers mentality.

If I shall put a label on myself, I’d say I trade pure price action. And no, that doesn’t mean that I’m simply a trend trader.As for my methodology per se… I would be tempted to say I have none… but dang I do. But hey – take it easy. Whether you’re trading futures, options, stocks or funds, you still have to buy as near the lows as possible, ride the profits for as long as you can, then sell as near the highs as possible – that’s what I believe in. It’s just a matter of personal choice which weapon you choose.

If I shall put a label on myself, I’d say I trade pure price action. And no, that doesn’t mean that I’m simply a trend trader. Nothing wrong with trend trading except most orthodox trend followers get in too late and out too late. Which explains the mediocre performance of the CTA’s and hedge fund managers since 80+% of them are (and always have been) trend traders.

Now I’m not saying that I threw away all those charts, oscillators, channels, pennants, gave up on the the cycles, the waves, retracements, Gann and Fibonnaci numbers and everything else; not at all – neither am I suggesting there is anything wrong with any of those methodologies. They, like me, look to trade price action. I guess some of those methodologies are probably worthless, but they seem to work – because the traders who use them have developed some sort of intuitive experience about price. But they are looking at price through the tinted glasses of their particular methodology. I do look at price in its purest form and without an unnecessary intervening methodology as a go-between. I wonder… does that make sense to anyone?

Tom