I have been slowly buying the books on your list and I have to ask why do you recommend Martin Pring on Price Patterns? As far as your course, price action trading or patterns do not move the markets and I believe the same and I have seen many get blown through in the last half year. Only thing is maybe an understanding of the price action traders but when reading the Market Wizard books, I find that most of the traders interviewed in these books use more information out side the charts than on to make there decisions, thus price/pattern traders do not move the markets. Anyway, the price pattern book puts me to sleep, not literally but seems to be somewhat a waste of an OF traders time. I don’t use the patterns when considering on putting on a trade. Example, I don’t see head and shoulder pattern, I see areas of highs in close proximity and see loads of stops lined up above. All of the other books on your list that I have purchased have been a joy to read.
I have to say I enjoy seeing some of your trades that you post lately are nice to see. The EUR/USD trade on Dec. 27 was nice. I know you said you should of let it run but it was a win. Only thing was you didn’t really say why you got out of your trade at the location you did, not sure if the thin trading environment had any bearing or not. Most of your trades you show I can figure out the why of the exit. Sucked I was out of town and could not take advantage of the low liquidity time- what I mean are the barriers, stops that the big players can easily push the market too. I am not sure the comment by Central Bank Governing Council member Jens Weidmann said keeping interest rates low may endanger political reform had any bearing on the move per Bloomberg.
That’s a good question why I recommend Pring on Price Patterns. You are not the first to ask that. It could perhaps be some remnants of my prior chart and price pattern stage. Other reasons can be because I do think there is some value in charts. I use them everyday and they help make my life easier. While I don’t specifically look for and put a lot of weight into those patterns, I still notice them from time to time, and sometimes they provide an interesting financial instrument for me to pick to perform more detailed information flow, expectations, and scenario analysis on. My preferred way to view the charts is through the order flow lens of volatility – specifically the ODVE, MDMM and GM movements, and the “easy money vs difficult money.”
I am always looking for more and different and better and faster ways to interpret why price moves, etc. Sometimes I scan the charts and see an interesting situation, which helps guide me towards more detailed analysis using the news/sent/fund/macro and scenario and sensitivity methods.
Also, I don’t think it is a bad idea to look at some historical charts, and notice any chart or price patterns that fire off, but instead of assuming that the chart or price pattern “caused” the market to move, to just use it to spur you to find the real reason why the market moved. The real reason – rooted in the information flow, expectation shift, scenario that came into play, etc. So next time you see an amazing chart that showed a move based off a moving average or tech indicator or chart pattern or price pattern, apply the order flow and information flow philosophy. Check out the stops that were tripped, analyze the expectations, the battle of scenarios that is occurring every day and the news/sent/fund/macro, etc. This helps someone replace their previous chart or price pattern mindset, with the order flow, information flow, expectation and scenario based mindset.
Almost everything in any market can be simplified down to:
Just a scenario
How much volatility it will cause
and how much you want to risk on it (position sizing)
Sometimes, I also get a kick out of fading certain price pattern signals. For example, in the TWTR weekly chart, it showed a weekly pin bar, which is typically a bearish signal. It even tripped the stops below the weekly pin bar. But I knew not to short it due to my macro analysis and I have been keeping some scenario and sensitivity tabs on Twitter and knew that it had bullish sensitivity. So I bought some TWTR and made a little bit of money on it last week. Not like the weekly pin bar had anything to do with the move – it didn’t matter. But when I scanned the weekly charts really quickly, it almost instantly clicked in my mind that I shouldn’t be trying to short it and look for long opportunities in TWTR.
Weidmann and the Bundesbank is almost always hawkish than the rest of them. One member isn’t going to matter that much, even if it is the supposed powerful Bundesbank. They all get one vote. Even they have to face up to the economic fact that both inflation and growth in the Eurozone is less than they would like it to be.