Gary and I were talking today about a mental exercise traders should take.
a) Print out a chart with your indicators on it.
b) Now, in Ninja, take all the indicators off. Print out the same chart. Also print out 5 or so more charts of different days and time periods (random) all with no indicators.
c) Study the printed chart with the indicators, and then take a sharpie/pen to the printed charts w/o indicators and manually "plot" where your indicators should be drawing dots and lines and so forth.
I think this is an excellent exercise in reading price action and making the indicator work the way you want, instead of allowing the indicator to take control over your trades. It will force you to find support and resistance areas, swing highs and lows, etc. Do it all yourself, manually. Do it for 30 minutes or as long as you can stand to keep printing charts and marking them up.
I think you'll find it beneficial.
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Thanks Mike for your input on this....I could not agree more.
I've looked at some many indicators for so many years....I don't have to see them anymore to tell you what they are doing ! That's why ultimately....you don't need them.
You don't need them.
I saw Frank Lesh co-owner of FuturePath Trading do a webinar (he's a 40 year industry Pro) He put up random charts in any market and proceeded to read price action like a book. That's is when I saw experience at work....it was awesome.
Here's another classic pattern.....three pushes. You gotta know this stuff.
Last edited by Jeff Castille; September 18th, 2009 at 11:22 PM.
I'm sure everyone is different...... when I say price action I'm refering to the basic patterns of human behavior that have been there since someone first thought of charting price. The patterns don't change because people don't change. Their fear and greed will always remain the same.
Although everyone knows that the first hour or so is the best time to trade, many traders miss too many of the trades because they happen too fast and the change of directions occur abruptly. The market is going up very strongly and then on the next bar it falls with just as much momentum. By the time you accept the reversal, you have missed the trade. However, if you train youself to focus intensely during the first hour, you should be able to see about four strong setups. Even if you choose to scalp them, you can do well. Remember, either the high or low of the day usually occurs in the first hour or two, and this means that the market will eventually run away from that area very far by some point in the day. If you can learn to take those entries, you can do very well with swing trading. On most days, you will have to take 2 - 4 entries while attempting to catch a big swing but it is worth it. And it is hard to do. Some traders live for those first two hours and then don't trade for the rest of the day. One very successful trader told me that he analyzed his trading and discovered that he made 90% of his money in the first hour or two and decided to no longer trade the rest of the day.
The next best time to trade is in the final hour or two. The market often has nice trending swings going into the close.
The single worst time to trade is in the middle third of the day where the market usually is spending a lot of time in the middle third of the range, near the EMA, forming lots of Barb Wire and chopping swing traders to pieces. Yes, great price action traders can make money there, but until you are consistently profitable, you should avoid it