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Price action Vs Indicators

price action indicators

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30 replies to this topic

#1 Rockweli

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Posted 27 December 2016 - 07:07 AM

20150411_PriceActionIndicator_registrati

 

I see some pro traders are talking about price actions. and some traders are using indicators. Some are saying pa is the key for success. some are saying indicators are the key. But i can say both are same. :blink: 

 

 what is price action - technical analysis and reading of past prices. analysis of past prices higher highs,higher lows,swing highs,swing lows,support and resistance, over bought and sold,candle patterns and drawing of trend lines. what words says they are all very same. After that all analyze traders can get some conformation for future actions of price. But what hard work done, it is not guaranteed because future is very unpredictable. ( this is very short explanation of pa, it is big topic )

 

 

so what is indicators- it is tool of same work. coded equipments based on past price movements. only for get some conformations of future price. also very unpredictable.

 

what is different of this two ? , it is like some one use calculator for calculate, some one use mind or drawing for calculate(because they are graduate for that). It doesn't matter if answer is same.

 

finally i can say,  both systems giving conformations based on same past price movements. But you have to get knowledge about price action to use indicators for what to use them. after use indicators sometimes with knowledge you not want it any more for conformations. Then you can trade from mind or drawing using price movements. that time you can say you are a pro trader.

 

Im not a pro trader, so dont mention if i said anything wrong in this topic. Just correct me if anything wrong.

thanks.....................


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#2 MIK

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Posted 27 December 2016 - 07:39 AM

its simple logic for me dude,  in bins/forex you want your brain to do less work and let indicators do most of it 

you want to make money and leave .... now here PA guys will disagree with me because indis cant predict you cant depend on them 

... thats your thinking i worked and played with many indis over the months i found really good ones 

reading candles checking patterns ... maybe its just me but i think you are making something very simple very complicated and there is no need for that in long run it will get to you and you will end up leaving because you are mentally exhausting yourself 


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#3 KleantRrera

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Posted 27 December 2016 - 11:16 AM

Indicators represent different aspects of price action. What's interesting about indicators is that they have complex formulas, can make the computer perform billions of calculations per second (we as humans are not even close to this), and are created by price action traders.

 

I believe no price action trader can overcome the genuinity of a consistent and accurate indicator, not to mention EAs.


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#4 dasa

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Posted 27 December 2016 - 11:33 AM

Indicators are made by someone just as the market is made by individuals. There are no rules at least fixed ones in the market. Price action is something that can at least get you ahead of others, if you have the patience to wait for setups.
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#5 ryan65

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Posted 27 December 2016 - 11:58 AM

I analyze market with my tools, but confirm with my eyes!
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#6 traderpusa

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Posted 27 December 2016 - 12:03 PM

This subject has been over discussed. Just know that indicators are good for giving a view on the past and price action can give an indication on the future.
Putting price action and indicators in the same basket is just wrong.
All indicators are based on open close high low and not complicated at all if you have a bit of a math or stat background. In fact they are childish when you look in the code. All these threads based on ob os levels of indicators are baseless.
At the same time price action can also not predict the long term market. Trend is determined by many factors such as gdp employment inflation interest rate national Bank intervention war opec pricing etc.
What price action does allow you to do is determine some places on your chart where buyers and sellers are, and we can use these levels to take some profit, something which indicators are completely incapable of.
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#7 raydioturner

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Posted 27 December 2016 - 12:05 PM

I've made a lot of money with indicators in the past. I recall a few years ago when mt4 did an upgrade forcing everyone to recode their indy's. It was that day I decided to learn price action. I agree with Mik's idea of keeping your trading as simple as possible, which you can easily do with pa. I do this day in nd day out. Once you train your eye you won't need indicators to do anything for you, you'll be able to go and find on your own. I guarantee the market makers don't use any of these indicators or systems found on any one of these trading forums. Good luck with your desicion.
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#8 PaititiGold

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Posted 27 December 2016 - 12:29 PM

Indicators measures the past based on ohlc.

Price action is based on candles and bars of the past.

Everything on a chart is some form of data about the past, no difference whether indicator or price action it's still about the past.

We trade the future on the right edge of the chart.

Once we understand that which is a pretty hard thing to do then only can we realise we need more than what's seen on the chart.
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#9 traderpusa

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Posted 27 December 2016 - 12:36 PM

If anyone would care to read the ea thread you would notice I take trades based on a third method which is not related to pa or indicators but based on market volatility. It's mechanical non emotional and purely based on some code taking care of the outcome. No need to discuss that way about price action or indicators lol. I apply it to forex but in theory nothing would stop me to implement it on bins.
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#10 Rockweli

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Posted 27 December 2016 - 12:40 PM

1. why saying this is over discussed. this is only 1st page.  :D and still i not see big point for give up.

2. both are indicating for future based on past .

3. i put them separate baskets. but both are baskets.

4. cant say every indicators childish, because there lot of advance indicators made by grate coders.

5. of cause indicators cant detect news events until price change.  because we want analyze price action manually ( is this reason for dont use indicators ?)

 

Please dont be angry with me guys. this is just a discussion and dont get personal.

Also traderpusa, you are very senior member of this forum, i cant argue with you from my little knowledge. and i always respect for seniors ideas, because they are already passed our present.


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#11 homero15

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Posted 27 December 2016 - 12:42 PM

It can be also depending on the traders style, what I mean is that it takes time for some traders to find wish way to take to be profitable, some start with Indis, then move to PA only, then back to Indis, all this is good if we are learning for future entries, the reality about indicators is that some are just copies from other indis with the only purpose of commercial gain, I personally use my interpretation of market with the trend, Candle sticks and PA, with BB to showing me Volatility+Market direction+Tops and Bottoms+many other conditions lol, but I am not that talented to interpret many indis at same time, prefer clean and clear chart. but like I say at the opening of this comment, as long as you are profitable that is the main goal, have you find your profitable method yet friends? :)

 

one of today trade.

 

aaTxv9a.png


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#12 BrianC

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Posted 27 December 2016 - 12:42 PM

Well, to me it's not the same to see, let's say, a bearish pinbar together with a history of bars and indicators that look like a put would have a high probability, compared to actually watching exactly when that bar took the shape of a bearish pinbar. On a M5 bar It could have had the shape of pinbar for the last 4 minutes, price standing still for those last 4 minutes (indecisive?), or it could have been bullish bar and the price smashing down for the last 30-60 seconds forming a pinbar and showing rejection of a resistance area right before the opening of a new bar. I would say that the last one has a higher probability of price continuing down for next few minutes, riding on the momentum, than the first one with an indecisive price action for several minutes.

 

Long story short, patterns and indicators sure do help me, but they can't make the right decision in the right moment for me, only watching PA closely can do that. That is how I see it when it comes to trading bins, where timing is so important.


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#13 traderpusa

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Posted 27 December 2016 - 12:53 PM

Overdiscussed because this subject comes up every few months. You are far from the first one starting this subject. For some reason which I don't understand there seems to be a competition between pa and indi. Why ? No idea.
Indicators can be very useful tools giving you extra input. The only thing I know which doesn't work is using them as ob/os and as the sole reason to take a trade.
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#14 Rockweli

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Posted 27 December 2016 - 12:58 PM

Well, to me it's not the same to see, let's say, a bearish pinbar together with a history of bars and indicators that look like a put would have a high probability, compared to actually watching exactly when that bar took the shape of a bearish pinbar. On a M5 bar It could have had the shape of pinbar for the last 4 minutes, price standing still for those last 4 minutes (indecisive?), or it could have been bullish bar and the price smashing down for the last 30-60 seconds forming a pinbar and showing rejection of a resistance area right before the opening of a new bar. I would say that the last one has a higher probability of price continuing down for next few minutes, riding on the momentum, than the first one with an indecisive price action for several minutes.

 

Long story short, patterns and indicators sure do help me, but they can't make the right decision in the right moment for me, only watching PA closely can do that. That is how I see it when it comes to trading bins, where timing is so important.

agreed, actually we want both systems for success. But my point is why some one saying pa is only way for success. we want both. why we kicking our ladder after climbing up.


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#15 traderpusa

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Posted 27 December 2016 - 01:01 PM

Not childish ? Learn some coding and look what formulae are actually behind all these indicators. It's like going back to learning algebra in school. Indicators are good for showing some trend but at the same time your eyes don't have trouble seeing if price is going up or down right ? Just apply some mtf (multi time frame) to distinguish between a retrace or a trend.
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#16 Rockweli

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Posted 27 December 2016 - 01:17 PM

ok, lets get down to some example, i using 3 different arrow indicators based on adx, rsi and ma cross and sup & res indicator. also i using trend power and  histogram indicator for sub window. then i can decide my entry using them. also i use my pa knowledge for before entry. But how can i do that all in second using only pa.


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#17 traderpusa

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Posted 27 December 2016 - 02:19 PM

Your eyes will do that with enough chart time.

#18 PaititiGold

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Posted 27 December 2016 - 09:14 PM

We all observe this happen in many forums.

 

Indicators vs PA.

TA vs FA vs QA.

Scalping vs swing trading vs position trading.

Random walk with levy flight vs predictable

Martingale vs flat stakes

Binary options vs forex

and so on...

 

We have our own perspective and we are all very passionate with our opinions. This passion is very good.

 

BUT,

 

what is not good is that we tend to say this at the same time -

 

- I must be right

- my views is the only right one

- I am not tolerant with other people's views

- I make money so I must be right

- if I am right then you must be wrong

- if you want to be successful you have to follow my way

- if you don't share my views then you must be a loser

- if you don't share my views then you must be against me

 

- MY REALITY IS EVERYONE ELSE REALITY

 

and we say and do many unpleasant things, sadly.

 

And we beat each other up.

 

I admit I am equally guilty of doing this. >>facepalm<< >>slap, slap, slap<<>>double facepalm<<

 

Can I propose that we consider these -

 

- I must be right

>> I know I am right, I also know that I will gain knowledge today that tomorrow I will be more right than I am today.

 

- my views is the only right one

>> my views today is the right one, ofc my views tomorrow will be the right one and so on. I also believe in life long learning.

 

- I am not tolerant with other people's views

>> I am secure with my views, I do not need others to confirm it. I seek to improve it.

 

- I make money so I must be right

>> I do make money when I am completely wrong, many times.

 

- if I am right then you must be wrong

>> Your right don't make me wrong. Vice versa.

 

- if you want to be successful you have to follow my way

>> There are successful people doing different things. We all do different things in life.

 

- if you don't share my views then you must be a loser

>> Our views make us winners. There's lots of room for more winners.

 

- if you don't share my views then you must be against me

>> I will like to learn about your views, can you tell me more about it ?

 

Cheers people !  :D


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The best investment you can make is an investment in yourself,..... the more you learn the more you'll earn. ----- Warren Buffet

You have to learn the rules of the game, and then play it better than anyone else. ----- Albert Einstein

#19 Rockweli

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Posted 27 December 2016 - 11:16 PM

We all observe this happen in many forums.

 

Indicators vs PA.

TA vs FA vs QA.

Scalping vs swing trading vs position trading.

Random walk with levy flight vs predictable

Martingale vs flat stakes

Binary options vs forex

and so on...

 

We have our own perspective and we are all very passionate with our opinions. This passion is very good.

 

BUT,

 

what is not good is that we tend to say this at the same time -

 

- I must be right

- my views is the only right one

- I am not tolerant with other people's views

- I make money so I must be right

- if I am right then you must be wrong

- if you want to be successful you have to follow my way

- if you don't share my views then you must be a loser

- if you don't share my views then you must be against me

 

- MY REALITY IS EVERYONE ELSE REALITY

 

and we say and do many unpleasant things, sadly.

 

And we beat each other up.

 

I admit I am equally guilty of doing this. >>facepalm<< >>slap, slap, slap<<>>double facepalm<<

 

Can I propose that we consider these -

 

- I must be right

>> I know I am right, I also know that I will gain knowledge today that tomorrow I will be more right than I am today.

 

- my views is the only right one

>> my views today is the right one, ofc my views tomorrow will be the right one and so on. I also believe in life long learning.

 

- I am not tolerant with other people's views

>> I am secure with my views, I do not need others to confirm it. I seek to improve it.

 

- I make money so I must be right

>> I do make money when I am completely wrong, many times.

 

- if I am right then you must be wrong

>> Your right don't make me wrong. Vice versa.

 

- if you want to be successful you have to follow my way

>> There are successful people doing different things. We all do different things in life.

 

- if you don't share my views then you must be a loser

>> Our views make us winners. There's lots of room for more winners.

 

- if you don't share my views then you must be against me

>> I will like to learn about your views, can you tell me more about it ?

 

Cheers people !  :D

of cause no one perfect. but this discussions and there own ideas and arguments finally will make one good answer.


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#20 shaileshm

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Posted 27 December 2016 - 11:30 PM

Quoted from http://mechanicalfor...ifferences.html

 

"If you have traded for long enough, you have probably found yourself discussing at some point the issue between price action and technical indicators. Some traders – after a long battle with indicators – find a sense of elegance and simplicity in price action analysis while others argue that indicators provide for information that cannot be obtained from simple price action. Is there a fundamentally better way to understand the market? Is there any advantage you can get from using price action? Is using indicators a way to ensure that you only produce systems that work in hindsight? On today’s post I seek to answer these questions as well as give you some clear facts regarding both price action and technical indicators. We’ll go through the definitions for both, how they are different, how they are the same and how these characteristics might relate with actual trading and profitability.

 

 

Let us start by defining both concepts. Price action is generally defined as any interpretation of the market that arises from simple comparisons of raw market data. For example if your trading system compares today’s open with the close 10 days ago then you can say that you are currently trading a price action based system. Price action strategies do not process raw market data in any way and therefore provide the purest image of the market. Technical indicators, on the other hand, process raw market data in some way that may eliminate some information contained within the original data. For example a stochastic oscillator gives you the location of current price relative to the High/Low range for the past X periods and in the process it reduces all market information to a 0-100 range. Technical indicators go through data and return values that are an overall simplification of the underlying price action. You could view price action as a loss-less way of trading while technical indicators are a filtered way of trading.

 

From the above it could be easy to say that price action is better because it provides more information. However, the amount of information in the market that is relevant for predictions is small, as the market is incredibly noisy. For this reason technical indicators provide a level of filtering that can be very useful in deriving systems that generate signals based on the actual underlying market behavior that is interesting to us, rather than the noise that is above. Indicators become more useful as the amount of noise in price action becomes larger (as time frames go lower) while they become less useful as the amount of noise becomes less. While a price action based system may have a very hard time producing viable signals in a lower time frame, a strategy based on technical indicators may be able to derive better results by simply looking beyond a lot of the noise that makes price action trading harder.

 

The above also does not mean that technical indicators become irrelevant as the time frame becomes larger. A technical indicator can provide you with information that is difficult to see across large amounts of data. For example a technical indicator might be able to show you what percentage of the past X bars where bullish or bearish, something that is difficult to deduce from simple price-action based comparisons. This also does not mean that price action is irrelevant at low time frames as price action can often react quickly to some events that are difficult to see through indicator filtering. While an RSI filter might take some time to react to a market spike, this can be caught very rapidly with a price action based strategy that is making some quick OHLC based comparisons using data from only the past few bars.

 

From an algorithmic system creation perspective people often complain against technical indicators because they are perceived as being more prone to “curve-fitting”. People often think that their chances of developing a successful strategy with indicators are slim because the degrees of freedom inherent to the indicators themselves – the variables relevant to their signal processing – gives them the ability to adjust the system (curve fit it) to past market conditions in what is perceived to be “excessive”. However price action based systems can do exactly the same thing if they are provided with enough degrees of freedom. A trading strategy based on 10 price action based rules can actually be more prone to being “curve fitted” that a strategy that is developed using a single indicator with 3 filtering variables, simply because the price action based strategy has more degrees of freedom. The issue here is related to the data-mining bias of each one of the two approaches, provided you have determined your data-mining bias for whichever number of degrees of freedom you have there is no inherent advantage or disadvantage inherent to the type of system you’re using. The issue here is related to the degrees of freedom of your strategy and not to the type of variables being used.

 

It is also worth mentioning that I have had experience in the past with both types of trading strategies (based entirely on price action and entirely on indicators) and I haven’t found any indication that one source might be better than the other. A strategy can be developed in an entirely sound way for any of these two approaches and neither one nor the other gives the strategy an additional probability to succeed under live trading conditions. In the end both price action and indicators are sources available for the design of trading strategies and a smart trader would definitely take advantage of both to develop better trading systems. Indicators can be used as signal filters to get information that would otherwise be difficult to get, while price action can be used to provide additional confirmations, fast reacting exits, etc. Both of these sources have their uses and they can indeed be combined to arrive at a more holistic approach to trading.

 

Finally I would like to point out that it is very important to understand indicators whenever you use them. Indicators are signal filters and as such you should understand what they are filtering, what information they are giving you and how you can use this information to create or improve a trading system. Indicators can rarely be used successfully without a deep understanding about what they are calculating, how they are being calculated and what these calculations say about the underlying price action."


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