A Price Action Traders Perspective On Trading With Price Action
We like to share price action trading success when we find it, and we stumbled across a price action traders perspective on trading with price action and thought it was a really good piece. It’s very rare that you will see a successful trader share their win percentages with you, so when we saw that this trader is boasting a win percentage of better than 80%, we decided that we would share his post with you.
Our early win percentages were in the high seventy to low eighty percent range, but we are finding that most of our traders are moving into the low ninety percent win range with more time and experience with price action trading strategies. The more you use and watch prices without the distraction of indicators and false signals, the better we find that traders will become in reading a chart. Many that use price action in their day trading are reaching expert levels at reading a price chart.
While these expert levels may not come over night for most, some catch on really quickly, particularly if they truly concentrate on learning price action without hanging on to small pieces of their former trading life, which most try to do when switching over to pure price action trading. What we usually find when a student contacts us with problems in picking up the ability to read a chart is that they are actually trying to incorporate some previous portion of their trading into their attempt to learn to read a price chart, and in most cases, this is not going to allow you to be successful. You must throw away your old style of trading if you truly want to learn to read a price chart based on price action movements only. There simply are no short cuts or work arounds to this fact of life in day trading.
Below is a small excerpt from the post we found at www.traderslaboratory.com. Be sure to read the entire article when you have time, as we are only going to share a small snippet of it so that you can get a small understanding from someone outside our trading circles. We think this traders confirms much of what we have learned and experienced in our quest to become expert chart readers. Below is what this trader had to say about price action trading.
I am in a time in my life where I am trying to give back so let me try and tell you some things that I have learned over the years so that you may become a better trader. I’ll make you a deal, I only ask that you share what I write with your group so that they may have a chance to add to their learning as well.
Let’s start by talking about what indicators and trading ‘systems’ are designed to do and what they are not for. Indicators are just a way to choose and filter the best chances to win over other ones – particularly for spotting divergences which as I said is one particular strength in the way Ryan Watts uses the MACD. Ryan will tell you also that the indicators are a guide and not somethng that need be followed blindly – except in teaching yorself the value of discipline and following rules which is obviously very important as is risk management, which we don’t need to get into here. The bottom line is that years ago when I developed and traded my own pure indicator models I still won 60% of the time, but now that I have been trading mostly price action WITH the addition to those, my monthly W/L is ALMOST ALWAYS over 80% and has been for many years now.
Think of the indicator fallacy in another way, and I’m not trying to discourage you, but do you really believe that the 90% of traders we know are losing are failing because they really can’t interpret and execute the thousands of perfectly good ‘trading systems’ available – including Ryan’s that costs $50? Come on. Think about that. There are more smart traders than dumb ones. All decent trading systems have basically the same indicators and to qualify as a good system the combination just needs to be robust enough to take all ‘angles’ of past information into account so as to give you a most likely scenario for the future. There are basically only five things we can look at and we can twist up in 1000 different ways – the high, low, open, close and volume data of previous price events. These are all really important to know but what they don’t do is tell you buyers can’t push prices past 1377.50 – RIGHT F’ING NOW. Sorry for the drama but I am trying to impress on you that price action is what really matters. That information is right on the entry chart and as plain as the nose on your face. The bottom line sadly enough is that there wouldn’t be much of a trading industry if everyone new the real secret of scalping is just looking at two numbers which constantly change throughout the day. Those dynamic numbers are called support and resistance and those coupled with the interperatation of how participants are acting at and on these levels is the real key to scalp trading. How could it be that easy? It is – and then again it isn’t and that is why 90% fail. You can read the rest of the original post here.
Notice that this trader talks about that mysterious (it really shouldn’t be mysterious to a day trader though) support and resistance just like we do in most of our posts and videos. Why trader’s can not understand the importance of support and resistance is simply beyond me because it really is as important as we say it is when it comes to day trading. If you can find major support and resistance each day, then you can find at least one or two trades that have a 90% chance of becoming a winning trade for a 4 points scalp every single day. If you can find one or two of these only each day, then you can make money as a day trader. Most traders don’t get or understand this fact, but it’s a very true statement.
We hope you enjoyed reading a price action traders perspective on trading with price action. If you want to get the facts on day trading with price action only, then you have come to the right place. Spend some time here on our website and watch our YouTube videos as well, as these will offer you the opportunity to learn what we do every single day, which is to trade price action in the ES profitably. Learn how you can become a price action trader by checking out our information at http://priceactiontradingsystem.com/pats-price-action-trading-manual/.