People say systems dont work (only pure price action does)
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Thread: People say systems dont work (only pure price action does)

  1. #1
    Is this true? I've been trading a system that I've been profitable with for a while (on demonstration ) before I proceed live if I learn to trade with pure price action?

    Everyone says over time that your method will fail unless you're using pure price action. EX) Support/Resistance, trendlines, candlesticsk. I guess my questions are

    1) Could you trade long term with a system and also be profitable
    -Bolinger Bands, Moving Averages and stochastics
    2) Are there some profitable traders which have been trading 3years profitably with the same egy (not pure price action) but one which utilizes indiors as a main portion of there egY?

    I've heard and read to many people stating any system will fail and just pure price action will work in the long run. I find this hard to believe because no matter what price comes with a 50 percent chance of going down along with 50% chance. So would not a system just be helping with probabilities like every other egy (price action) I think as long as you understand the pros and cons of your method and you maintain trading it you will learn the defects of your egy and be able to profit for it for years to come?

    Would love to hear from you men that are profitiable, or know of anyone profitable! I need this to be a discussion, I am searching for replies. No arguing please! Debating is nice. . Destroying the thread and getting pissed is another story.

    Can't wait to hear from ya!

  2. #2
    Quote Originally Posted by ;
    Everybody uses a system of types however optional we're, unless we exchange randomly.
    By random, you mean randomize the price and time of the entry and exit? Interesting, I believe I will try that. (Can not be any worse.)

  3. #3
    Indiors are a crutch. So it makes it more easy for novices to jump in and lose all their cash.

    Sooner or later you have to escape from indiors IMHO. So the best method is not to use them to start with. It makes it a bit tougher with a learning curve at the beginning but it will pay huge dividends over the long haul and the very long haul is what this is all about.

    Apart from being a crutch, indiors and systems based on these can't easily adapt to all the suttle instead of so suttle changes that exist on the market, day to day, week to week, year to year. What works now might not operate 1 year out. However, once you're relying upon price action instead of indiors you will naturally be more in tune and aware of those market changes. Not too much a conscious awareness, but something that becomes a part of that gut feeling we eventually develop and learn how to rely on.

  4. #4
    Quote Originally Posted by ;
    Indiors are a crutch....
    I think indiors serve a huge assistance instead of so much of a crutch. Additionally, I thing price action is needed. . But price action alone is not needed. . It's possible to exchange price action with an indior and also be much more successful.

    Indiors are great for 2 reasons, they can let you stay a bit more discipline and help see things you may overlook.

    The only thing you need to know about is that indiors are lagging. . And with that knowledge you can use indiors.

    I enjoy the complete stochastic a lot! As it steps momentum and is based on prices are shifting over time. . With the understanding it is lagging I can say alright its approaching overbought levels but rather await a lagging signal to get in I can now turn into price action and see if the turn is actually happening

    also you can learn to utilize indiors in an non judgmental manner if you start up two time frames. . The 5 minute shows stochastic reaching overbought. . But the shows stochastic has turn downward. . We have a leading indior. . Since stochastic turned on 1 moment the 5 will follow and momentum will turn down thus prices hold a high probability of going down.



    PS: I am not fond of more than one indior and 1 usually is sufficient to assist. . It helps give some confirmation together with the price action.

    Well theres my two cents. . Interested to know what you think, thanks!

  5. #5
    Systems do operate if that is the type of trader you are....It needs area...I can share a system with you I can explain....

    Price Action when I understand you directly (Elliott) that works too but you have to be excellent....either totally smart or 8-10 yrs. Expertise

    I believe you want both....you want the entire Path trying to find the reality.

    I also believe this is a computer running for your queen in rothchilds home so go ahead and try and crack the code....

    I am trying....they understand, so they have a method to trade it, but can we encounter one....yes but not as profitable as theirs....

    You'll only go up to you understanding takes you....then comes the issue....be it in any level of trading you are at...

  6. #6

  7. #7
    While I can not say much regarding the potency of indiors like I have only been demo trading for half a year and that is not long enough to vouch for whatever, I'd love to discuss a fascinating experience that happened to me.

    When I began learning Foreign Exchange, I thought indiors were the best things to ever be created; MACD, Bollinger Bands, etc.. I actively sought out system after system which utilized several indiors that cluttered the screen, analyzed them for 1-2months and failed miserably (though I agree that 1-2months is in no way long enough to test the potency of a system). However, in the midst of all the huha, I did some price action transactions that I have picked up from free bits and pieces of information on the internet, simply by observing the charts and only aiding myself by drawing trendlines and SR levels. I recorded my own individual trades so that I understand that why I entered the transaction and such and posted comments.

    Now that it is coming into the end of 2010, I thought to myself why not review all the things that I've done over the last 6months studying Foreign Exchange? Thus I opened my site where I recorded all my transactions using whatever system I have analyzed, and lo and behold, my most profitable ones turned out to be only using SR levels/trendlines/candlesticks. While I am not saying that those transactions make the most money (nothing is 100% accurate), they turned out to have the ideal benefit:risk ratio (this took me quite a while to understand its importance, I can get 50% winning trades but when every winner is 3:1 I'd still gain significant profits).

    I'm now determined to concentrate solely on price action come 2011 and attempting to stay away from indiors and eradicate my bad trading habits. There are definitely people out there who trade with indiors; one man's meat is another man's poison, as the saying goes, and it boils down to whichever suits you best!

    Good luck to everybody in 2011!

  8. #8
    If anyone cares about it, without having read of the pages here is my own opinion.

    No system (so a couple of indiors and a handfull of principles so that you can basicaly hardcode it in an EA ) will ever work. It is just not flexible enough.
    That doesn't have to function as indiors fault while they do have alot of disadvantages compared to PA.. I have never seen a trade who doesn't use his own discretion even if he utilized Indiors . Humans are simply better at understanding the market situation than indiors that is dumb. You may run into trouble Should you rely upon them.

    Now in the event that you compare PA into Indior established systems. Price Action doesn't lag and gives a boatload of advice to you which no RSI could ever give you. Where are buyers most likely to come in the market? Are they coming? How strong? Do buyers eliminate strength over the years (Bars fail to make new highs ). It is simply much better. I would not ever use Indiors to get a signal. You can use them to give you a quick summary of how fast the market is like the MA Rainbows do. But forget all that Crossover and Oscilator crap. The market doesn't care about it. It cares about Order Flow which you can see with PA..

    In my early days I tried many indiors approaches and constantly ended up altering things to get rid of losing trades instead of accepting them. And indiors made it easy because there are so many of many settings and them. 1 combination should make you alot of money that's what of the n00bs think. With PA there's nothing to optimize but will probably stop working the day they are used by that you. It is alot more honest.

    Another significant thing for me is that I have to belive and be in a position to explain what I do. Why should Should I use a RSI for signs that work? What is the fundamental explanation? That is what indiors fans think of although self Fullfilling Prophecy is a bit of a lame explanation. With PA you know where the Buy Stops are because everybody on Earth sees the range market and individuals place their orders swing highs/lows or range bounds. That is what causese all the Supply and Demand and moves the price. That is something I rely on and can concur. Not a Vodoo Magic.

  9. #9
    There are systems that succeed briefly and a few that will succeed as long as humans act.
    Problem with many folks is they wish to find a system without understanding underlying mass plogy in the markets. You need to know the mass normally tends to react to things and build a system.
    In the event that you identified such a behavior, then your system won't ever fail (over the long-term).

  10. #10
    VERY well said.
    [quote=Dopey;4176996]At one time, virtually everybody in the world thought that the world was flat and you would fall off the border.

    At one time, the huge majority of Germans thought that Adolph Hitler was good for Germany.

    At one time, the huge majority of people thought the earth was the middle of everything and the sun orbited it.

    At the same time once I decided to sell everything I own and go live in Turkey, everybody I knew, except my mother, told me it was mistake and that I would regret it. I'm still residing abroad and I have lived a lifetime so much that people just dream about. Of those people I knew then, I miss my mother.

    Truly, how much more proof does one need to finally understand not to listen to exactly what the majority says? If the majority says baaaa, then you need to be barking.

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