In Price Action Trading Strategy

My online reach really goes as far as this site and a handful of friends that I have made over the years.  This site is primarily education-based, so news outlets rarely link to me because the topics are not at-the-moment, and other educators rarely link to me (or any other) because heavens forbid someone say something that conflicts with their strategy.

So when I received an email from Simit Patel, the owner/founder of InformedTrades.com seeking an interview, I was happy to accept. Simit sent me 10 questions, several of which I have never been asked before, so I was happy to write away.

Also, as many of you know, I am not a fan of making videos. Simit told me that he's going to translate some of my writing here in a video form and get them up on his site at some point. I'll let you know when that happens.

You can find the interview right here, and be sure to check out the InformedTrades.com community while you're at it. Thanks as always and see you guys soon.

-Steve

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Comments
  • Simon D
    Reply

    Hi Steve,
    Hope the hand is feeling better – perhaps it’s worth getting those bad boys covered with some celebrity-style body insurance?

    Apologies for the slightly rambling post here, but was interested in your comment about using a second PC for backtesting strategies, as I don’t think you’ve specifically covered the whole issue of backtesting yet, and wondered if you planned to do so.

    A lot of backtesting info online is either a) people trying to sell you stuff, b) people making wild claims for their MA crossover strategy based on 3 months of data or c) people discussing standard backtesting problems like overfitting etc. What I’m having trouble finding is anything that goes beyond this, and looks at things like software options, basic pointers on/specific issues surrounding programming price patterns, diagonal TL breaks etc. and the relative importance of backtesting for your overall trading routine, amongst other things.

    Forgive me if I’m oversimplifying and misrepresenting your trading approach, but it seems you use fundamentals to gauge price direction & momentum, and then use support-resistance zones along with a number of confluence factors (diagonals, Fibs, price patterns, candlesticks, touted levels, downclose-upclose ratios etc.) to determine entry-exit. My guess is that this last point makes backtesting strategies more tricky, since although you are looking for maximum confluence each time you trade, you will rarely get all of these confluence factors occurring at the same time, and which factors occur together will vary from situation to situation.

    Any thoughts/comments on how you factor backtesting into your whole trading approach, whether it’s a good idea to go off and learn basic programming skills, or any of the other points mentioned above?

    All the best,
    Simon

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