AboutMark Hodge Expertise Questions related to technical analysis, strategies, risk, trading plans, trading psychology and money management. Experience in trading all markets and timeframes with expertise in futures (e-minis, currency futures, commodities, European Markets-DAX) and equity options. Unfortunately I am not allowed to offer any specific trading advice (i.e. should I go long the DAX today).
Experience I have been involved in the industry since 1995 working for Morgan Stanley Dean Witter and American Express Financial Advisors before becoming a full time trader. As Head Education Coach with Rockwell Trading I have coached hundreds of students around the world to achieve their trading goals with simple strategies, a sound trading plan and proper money management for the leveraged markets.
Organizations Currently serving as Rockwell Trading's Head Education Coach www.rockwelltrading.com and moderator for Rockwell's Day Trading Forum at www.rockwelltrading.com/forum
Education/Credentials Formerly licensed as a financial advisor with Series 6, 7, and 63 licenses. B.A. in Organizational Communications with a Business Minor from California State University, Sacramento.
Past/Present Clients I have worked with institutional traders, brokers, proprietary trading firms and private traders but respect their anonymity.
One of the few distinguished World Cup Advisors www.worldcupadvisors.com
Question QUESTION: you asked me to be more specific. the consecutive matching lows, double bar high with lower close, and double bar low with higher close. those were some examples that were on a forum at forex factory and they said that those were just basic examples. i was wondering if you knew of a book or something that goes more in depth on more terms and why they occur and stuff like that.
ANSWER: Hello Andrew,
Thank you for being a little more specific with your question. Price action can vary depending on the interpretation. Some people trade using price action by following "the tape" to anticipate trends in the markets they are trading, reacting to momentum and price. This can be discretionary in my option, or it can be categorized by technical patterns that help a trader come to the same conclusion.
The examples you provided are technical 2 bar setups that can be identified with bar charts, or buy using candlestick patterns. You can also visualize price action by watching the reaction to trendlines and support and resistance. Is price action telling you there is congestion near a high? Making new lows? Those 2 bar technical formations also help you identify the same thing. If you are a technical trader looking for moving average crossovers you might be cautious when entering a trade if you see that price action is showing a possible area of resistance or support.
If you're interested in learning more about price action, I would recommend that you learn more about technical analysis on the Internet or by reading a great book like:
Technical Analysis Explained by Martin Pring
An excellent book on trading that gives you a feel for market moves and price action would be:
Reminiscences of a Stock Operator by Edwin Lefevre
Using technical analysis and watching price action can be very valuable, but remember that NOTHING can replace experience and time watching the markets. If this is something you are interested in, immerse yourself in technical analysis and then watch the markets daily. Practice, practice, practice!
Happy Trading!
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QUESTION: would you recommend the book getting started in technical by jack d.schwegar. i just got it today and i love it. is there anything i should know about it?
Answer Hello Andrew,
Jack Schwager is a great guy and great author. This is a book I have not read so I cannot comment on it, but based on his exposure to the markets, traders and trading principles, I can only assume that it would be a good one.
Jack Schwager is most known for his books "Market Wizards" and "New Market Wizards". Although these books do not go into specific "technical" aspects of trading, the interviews with top traders provide valuable insights to different markets, trading approaches, and most importantly the psychological ups and downs of trading and the road that leads to trading success. If you haven't read one or both, I'd highly encourage you to pick them up.
