Don’t Fight or Trade Like This

This is part 4 of a 4 part series. Read the previous entry here: How the Typical Pin Bar Entry Is A Retail Entry

Here’s the transcription for the audio (Bringing a Knife to A Gun Fight)

“So pretty much every ‘guru’ who teaches price action teaches the same derivative, carbon copy, cut-and-paste method of trading price action.

That you need ‘confirmation‘, and the confirmation comes in 3-4 patterns such as a pin bar, engulfing bar, inside bar or whatever bar.

In this recording I’m going to put that perspective of price action into a different light.

And when you see it in that light, you’ll realize how ridiculous the other version is.

Imagine you walk into a martial arts studio, and the ‘guru’ is saying, “oh yeah, I can teach you how to be a martial artist and survive a fight.”

And they say, “ok, here is my martial arts…whether you are in a street fight or competition, you only need these 4 kicks to survive and win the fight.

“This is all you really need to use to fight. Now to use these 3-4 kicks, you’ll need ‘confirmation‘ that you should use the kick.

This confirmation comes when the person you are fighting is standing in front of you and not moving.

They don’t keep their hands up and their head is out. If you have all of these things in plae, then you’ll have ‘confirmation‘ that you can throw these 3-4 kicks.

But if you don’t have these, well, then you must stand there. In fact you shouldn’t do anything. You should just sit there and wait till the person you are fighting does what I said above

That is all you will ever need to win a fight by using these 3-4 kicks. And this is the only way you should attack. Barring that, you don’t want to do anything.”

Now ask yourself, if you walked into a martial arts studio, and the ‘guru’ there told you this, what would you think? Would you really think this is a way to fight or train in martial arts?

Of course not, and it’s the same for trading.

Yet anyone teaching the idea of confirmation via a pin bar, engulfing bar or inside bar, is pretty much teaching exactly that.

They all say if you don’t see these things, you should do nothing. Some even say walk away from the markets.

How ridiculous is this idea, that you should only spend your time looking for these things to enter and engage the market, and if these 3-4 kicks are not there, just stand there and do nothing.

I’m guessing by now you are seeing the insanity of this.

Yet this description above pretty much describes every price action, carbon copy, cut-and-paste guy out there, whether it be Nial Fuller, Jonathan Fox, or any other derivative.

And they are all derivatives of J16, which Nial used to be a member of before he went off thinking ‘I can do this same thing‘ and went and created his course, which is his own derivative version of it.

Since then, it’s only produced weaker and weaker derivatives. Very much like inbreeding weakens the genes, it’s the same with this version of price action being described.

And it’s weakening your understanding of price action.

You have to get beyond this, you have to get beyond the 3-4 kicks to win a fight type of price action out there. This is taught in the form of ‘confirmation’, and its not the kind of trader, or martial artist you want to be.”

 

This is part 4 of a 4 part series on the confirmation myth and how it reduces your profit and accuracy. Read the previous entry here: How the Typical Pin Bar Entry Is A Retail Entry

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The Blind Entry (How It Will Leave You Trading Blind)

This is part 2 of a 4 part series. View the next one here: How the Typical Pin Bar Entry Is A Retail Entry or if you missed the first one, checkout The Price Action Confirmation Myth & the Retail Mindset

blind entry 2ndskiesforex 1

Preface

I’d like to preface this post before I share the meat and potatoes stew.

People are going to have differing opinions on how to trade, particularly when it comes to price action, and that is to be both expected and accepted.

I think as colleagues, it is perfectly ok to offer a critique on a trading method.  It helps bring greater clarity and information to the trading world, especially for developing traders.

As long as the critique and constructive criticism is not personal, and not based on speculation, but simply comparing the differences in technique or approach, then it seems perfectly fine (IMO).

We see this in science, mathematics and medicine, so there is no reason why it cannot or should not be here.

I’ve recently posted a video on Why Confirmation is A Retail Traders Mindset, and not how professionals think.

This article is my critique and explanation of how and why the forex blind entry method communicates a retail traders mindset about price action.

Let’s begin.

The Critique On The Blind Entry

There is this retail version of price action, that trading a support or resistance level without a ‘confirmation signal’, is trading the market ‘blind‘.

It is called the ‘blind entry‘, because if you are trading without any confirmation signal, then you are trading the market blind.

I want you to think about that for a moment.

That a trend which has been moving for 1500 pips, selling off for 7, 8 or 9 weeks/months in a row…that if you are shorting without a price action confirmation signal (such as a pin bar, engulfing bar, or inside bar), that you are trading blind.

If that is how you approach price action, that trading without such a confirmation price action signal, is really trading blind, then you really don’t trust price action.

You don’t trust trading trends, you don’t trust price action context, you don’t trust an imbalanced order flow in the market, you don’t trust key support and resistance levels.

In reality, you really don’t trust your ability to trade at all now, do you?

Do you really think that a professional bank, prop or hedge fund trader has been sitting on the sidelines of the EURUSD downtrend these last several months, simply because they did not get a daily price action signal to ‘confirm’ the trend is valid?

Is that what you really think?

One has to ask the question, if attempting to join a well established trend, or entering the market without a ‘price action signal‘ (in the form of a 1-2 bar pattern) is trading ‘blind’, you really have to question that approach to the markets.

You have to question that understanding of price action as it is likely causing you to lose money.

In Closing

Are you one of those trading these price action confirmation signals?

Have you been sitting on your hands in trends that have moved thousands of pips, not trading them because you didn’t get ‘confirmation’?

If so, I want to hear your feedback and how this series of videos and articles is changing your perspective on trading price action confirmation signals.

Can you see the difference now in the two versions of price action being taught?

Which one do you think wins over time and why?

I want to know, so please comment and join the discussion below.

Did you like this article and find it useful?

Please make sure to like, share and tweet it below.

And do watch my next video in this series where I show the difference between the 50% retrace tweak entry vs. a professional traders entry.

 

This is part 2 of a 4 part series. View the next one here: How the Typical Pin Bar Entry Is A Retail Entry or if you missed the first one, checkout The Price Action Confirmation Myth & the Retail Mindset

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The Price Action Confirmation Myth & the Retail Mindset

This is part 1 of a 4 part forex price action strategy series. Read the next one here: The Blind Entry (How It Will Leave You Trading Blind)

I can always tell where people are in the trading process based on how they speak about confirmation. Why is that? Watch, and find out!

Here’s the transcription for the video:

“There’s a really big misunderstanding about confirmation.

When I hear people talk about confirmation and how they talk about confirmation, I can always tell where people are in the trading process based on how they speak about confirmation. Why is that?

Because there’s been this proliferated idea in the trading education world that to trade a setup or trend or something like that you need this thing called confirmation and the confirmation comes in the form of a pin bar, an engulfing bar, an inside bar or whatever.

So that’s the general idea that’s out there when it comes to trading price action.

The thing is, is that when I hear somebody talk about price action in this way, I know exactly what level of trader they are and what level of trader they’re not, because how somebody speaks about confirmation is very indicative of where they are in their trading process.

If a trader is looking for confirmation that a trade will work and they’re doing this because they’re saying “ok, we gotta wait for a price action confirmation signal from support or resistance“.

Well, where does this idea and need for confirmation come from? It comes from a beginner’s understanding of trading.

Why is that?

Because beginning traders are looking for certainty in the market. They’re looking for solidarity, they’re looking for something really really potent that says “I need confirmation”.

The reason why they need confirmation is because they don’t trust price action, they don’t trust their skillset.

They don’t trust trading as a whole. They don’t trust trading with trends, they don’t trust reversals. They don’t trust support and resistance, they don’t trust price action as a whole.

In the beginning, traders want solidarity, they want certainty. And because of that, they’re looking for confirmation in the form of a pin bar or something like that.

The pin bar ‘confirms’ that this trend is going to continue.

The thing about it i,s is that this is something that professional traders have let go of that a long time ago. And they have to let go of it to become a professional trader.

The reason why that is, is because that idea of certainty, of confirmation and the way that a beginning trader is looking for it, that wanting things to be really certain, that A++ setup.

Where that comes from is a beginning understanding of trading.

“Professional traders don’t look for certainty, because they’ve realized it’s an illusion.”

What professional traders are looking at, which is a different perspective, is trading and thinking probability.

So if you hear somebody talking about confirmation, “we wanna trade with the downtrend and we’re gonna wait for a pullback towards resistance and a pin bar off that resistance as confirmation that the trend is still in play and we can trade it“.

How many have heard that story before?

The reason why you’ve been told that is because the people who are teaching that aren’t trading professionally.

If they were you would know this, and all professional traders would know this because professionals aren’t looking for confirmation signals via a pin bar.

So if you hear somebody talking about that, you know where they are in terms of their level of trading.

They’re still a beginning trader themselves, and if you think about it, if somebody is talking about an A++ setup or they’re saying “hey, we’re waiting for a pin bar from resistance for confirmation“, besides the fact that I would suggest running from them as far as possible, because they’re still beginning traders.

You have to ask yourself “look, if you’re only willing to wait for a pin bar or an inside bar, or a false break, if you’re only willing to wait for those signals before you enter the market, well then you really don’t trust price action, do you?”

You don’t trust trends, you don’t trust price action context, impulsive vs. corrective, volatile vs. non-volatile trends, you don’t trust support and resistance, you don’t trust your own ability to trade.

You have to wait for all these other things to be in place and then this one final supposedly magical pattern and supposedly there’s only like 3 of them, which is amazing to me that this idea is actually out there, that there’s only 3 possible ways that the market is telling you a trend’s going to continue.

I don’t know about you but that seems kind of absurd to me. It seems a little insane to think that a market that is so complex, across so many players, across trends that continue.

Confirmation via a pinbar is an illusion, it’s a beginning way to look at trading.

So, your job as a professional trader… you know you’ve kinda crossed the Rubicon and made a big leap in your trading when you look at trading in terms of probabilities, not confirmation in the ordinary sense.

Confirmation, the way it’s normally talked about is a very dubious notion. It’s a very slippery idea that doesn’t really exist in the way you think it does.

If you’re constantly looking for those things you’re going to miss thousands and thousands of pips in a trend that is already well-esablished.

If you’re looking for confirmation, you won’t be able to make this trade and this trade and this trade and this trade. And that’s… what is that? +240-250 pips?

In a period of, what, 3 days? On one pair? You won’t be able to do that.”

This is part 1 of a 4 part series. Read the next one here: The Blind Entry (How It Will Leave You Trading Blind)

Have you been trading price action via ‘confirmation’? If so, I want to hear from you and what you see as the difference, so please make sure to comment below.

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