Remorse … I guess I am experiencing a bit of this emotion these days. Two of my fingers lack sensation in certain areas. That “deadness” is my fault. I screwed up …
How many times have any of us, as traders, felt remorse? We look at a trade that went south on us and we say, “That loss is my fault. I screwed up.” May be it is your fault, maybe not. The more important lesson is that it happened, it is done, and now it is time to move forward.
Words flow without constraint. Their job is to frame ideas. The problem is that they are not reality. They only express reality. As I am typing this, lacking feeling in the tips of two of my typing fingers, the lesson is pounding in my head. Let it go …
Question:
I think price action together with candlestick charts are a powerful combination to confirm a trend change. Do you agree?
Ed from Action town
Answer:
Ed, price action (a broad term for a variety of ways to approach trading) and candlestick charts are popular “indicators” among traders. Many base their whole trading strategies on each. It would seem logical one could act as trend confirmation for the other.
As strategies, both run the gamut between the simple and the complex, but the common premise for each is that both work on actual price movements within a specific timeframe. Those who utilize these strategies would tell you that high and low price movements are more predictive of what is going to happen in a short-term trading scenario than other, so called, lagging technical indicators.
One subtle, and perhaps arguable, distinction between the two is that candlestick reading emphasizes the relationship between the close price and open price and price action emphasizes intraday movement. In my opinion, this distinction is what makes the two, as you put it, a “powerful combination” for detecting trend movement.
As I have said before, simplicity in trading, as it is in life, is preferable to the complex. High-low price relationships unto themselves are simple, whether you view them in a candlestick strategy or in some other defined price-action strategy. Thus, if you are keeping it simple when combining candlesticks and price action in your strategy, I applaud you, especially if it is working for you.
Trade in the day; invest in your life …
