Does PAST price action determines future price action?

[Trader01]

Originally Posted by TraderABC

Hi all.

Does past price action in any way shape the direction of future price action?

Lets brainstorm, are there any ways to check this? Any ideas? Indicators, etc?
thank you!

YES! Its all about sentiment. TA is the representation of "herd" instincts; these never change in any meaningful way. We are talking about "reaction" -- they may get to a different river, different depth, different surroundings etc., containing different crocs, but they will jump in nonetheless. The ones that make it to the other side of the river, then come to Moneytec and extol the virtues of Stoplosses.

[tommyfx]

"When the banks (and or brokers) know where all of our orders are, it makes sense to use that information for their own purposes. So in a sense selling/buying pressure works, just in reverse. Take euro rates for example.
The currency was artificially moved up and down at which points the banks made huge profits (since they know the approximate time when to start to move currency the other way)."

But dont you see.... you have agreed with myself and answered the question of this thread by saying that? ALL moves in any market are artificial in a sense because value is not a tangable concept, market makers move it themselfs to put a tradable value on all the masses of buy and sell information that passes their computers everyday.
WHere do they know where to move it?? They know by seeing where orders are placed (from past price actio i.e support resisitance levels) and moving the price through these orders to trigger them as you rightly suggest, but this fits in with the laws of supply and demand, if there are more buy orders than sell orders the market will rise to trigger them and vice versa. YOu wont see the case where the MM sees a load of buying orders come throuh and then drop the price. THAT would be artificial, moving the price in accordance with buying pressure or selling pressure may seem artificial because they are profiting from moving the price, but someone has to move it and they do so in a way that is of intrest to them, which in turn is of interest to us because they follow where the orders are which is supply and demand and as close to fair as it will ever be. If the bakns or brokers didnt use their information of where the orders are the pirce would randomly float around with no meaning what-so-ever triggering orders off everywhere it goes, that would be crazy.

"School boy economics??? HA! Then why do economics professors make poor traders??? Trading proffesion is NOT connected with MacroEconomics to a large degree.... It is almost like comparing a Doctor and a Pharmacist, same field (Health) yet they are different"

I never said trading was schoolboy economics, i said the concept of supply and demand, when more people are buying than selling prices go up IS school boy economics, you learn that when you are about 5 years old playing at being a shopkeeper. The reason why economists dont make good traders is because economists wait to see prices go up and then give it reason why that happened, economics is the science of business and science by nature analyses what has happened to try and figure out what will happen (i should know i had the missfortune to study it for 3 years at uni and its all based around what HAS happened) once you see demand has increased and prices have moved up you have missed the boat, its too late to get in from a traders perspective. Trading is all about picking points where you expect to see a shift in demand/supply ratio, hence this is why we look at past performance to get an idea of where prices are likely to turn which brings us back to the original question of this thread.

Tom

[idejan]

Hi all,

Just to put my two cents in...
I like drawing analogies...

Originally Posted by idejan

Would I be able to assess my possible future earnings by simply looking at my previous historical earnings, or by looking in my readiness, my mental, emotional and physical fitness to cope with life, recognizing my true "expectations" (dreams, hopes, desires), using my real abilities (skills and experience) and finding the best possible way fulfilling them all at right time?

and about price and indicators from the same post

Originally Posted by idejan

...What wave Principle uses is the PRICE, where the PRICE it self is an INDICATOR of the aggregate Social Behavior and MOOD. SO PRICE it self IS A MEASURE of SOMETHING and NOT a subject of measurement it self. (it could be but it's irrelevant to this)...

Good trading to all,
ID

[bearprofits]

Quoted by tommyfx

Trading is all about picking points where you expect to see a shift in demand/supply ratio, hence this is why we look at past performance to get an idea of where prices are likely to turn which brings us back to the original question of this thread.

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If I throw a ball against a wall it will bounce back, but where? Many different factors go into the equation, the speed in which I threw it, the angle, the spin, and so on ……. But no matter where it ends up, the final destination is based on the myriad of equations that were caused its preceding movements .

Price in a way works in a similar fashion, through the past minutes, hours, days ect…. A multitude of traders have bought and sold, thus creating movements in price and time. These movements IMO are in patterns, some discernable some not. The key is being able to see the patterns in advance and knowing where and when they will end or change direction.

Price, where it is now, and where it is headed is derived from the movements of the past.

just a poor bear's thoughts.

Bear