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 ‘confirmationthat 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

Buddhist, Trader and Philanthropist

I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform. As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

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  • @imezi

    Hello Chris!
    I like your practical approach to trading.
    Wow. I didn’t know you knew these guys, I passed through them before I found you and suddenly price action looked easy and less restrictive.
    I didn’t think you needed to mention their names as it would appear there’s some sort of war going on amongst you all.
    I must say, I’ve not bothered to read another article from Mr. Fuller (my favourite before I found you) since I read your article on order flow.
    Thank you, and keep up the good work.

    • Chris Capre

      I am glad you like the practical approach to trading we have.

      And there is no ‘war’…just constructive critiques.

      It’s time to change the conversation around the retail version of price action which is perpetuated by one side, so hopefully this starts that.

      Kind Regards,
      Chris Capre

  • Russell Haynes

    You talk a lot of common sense here Chris … I like the way you relate it to something I can visualise (ie a fighter with only 4 moves) really makes sense … ant wait to get back on reading your course and change my life for the better!
    Thanks … inspirational stuff!
    Not often someone makes me WANT to learn! Lol

    • Chris Capre

      Howdy Russell,

      Well thanks for the positive comments. Getting someone to ‘want’ to learn is a great compliment.

      And yes, imagine a fighter with only 4 moves…good luck with that, so glad you caught on to that.

      Kind Regards,
      Chris Capre

  • tjenarvi

    Chris, you are the one that enlightened me about what price action really is.

    • Chris Capre

      @Tjenarvi,

      Am glad I could help change your perspective on what price action is really about.

      Kind Regards,
      Chris Capre

  • Leon

    Hello Chris
    I feel alittle sheepish saying this but before I got your APA course I sat on the sidelines on the USD/JPY trend for most of last year, but now I’m making about 2R daily minimum on the 10 instruments I trade(on demo).
    I will be posting my weekly results in the forum from next week (in terms of R made or lost), no losses will be hidden.

    Also you have guts to mention these guys’ names, the other educators.

    • Chris Capre

      Nothing to feel sheepish about Leon – many people have been brainwashed into thinking we have to sit on the sidelines for trends moving thousands of pips to wait for some magical pattern.

      I am glad you are starting to see the difference and how this is changing your trading for the better.

      Kind Regards,
      Chris Capre

  • Sanjay

    Hi Chris,
    Like your comments on Confirmation, you just mentioned few names of other traders and even their methods of trading. Few year ago, you also commented on SAM SAIDEN and his approach to trading supply demand and you were very much a critic of hin at that time. I watched your that video LIVE and I was impress by your words and comments. I like SAM and his approach too but you narrate the story better. I am not a critic of you, but like your comments and views on Price action trading than any other due to your vast practical knowledge using price action with Quantitative details, qualitative details and real price action. I would like to hear some comments from you on which level you prefer to trade without confirmations and other levels where you seek confirmation more than 1 or 2. Thanks for you artical that one was very good. Your views and remarks help us to do better.
    Thanks once again.

  • shay

    Great article chris..thank you.
    i’v started my way with other mentors and courses as you probably know,but since i started your course,i know i’m on the right track.
    Can’t Wait for the upcoming webinar
    shay

  • David

    Chris, I say this respectfully, but your martial arts analogy doesn’t really prove anything about trading. It’s fairly obvious that entering at or near S/R levels is going to deliver much higher RR than waiting for confirmation; but price frequently breaks through S/R levels, which will have the effect of lowering the overall win rate (profit factor is the product of both RR and win rate). Hence some objective statistics comparing the performance of the two methods across several hundred trades would be helpful (although I appreciate that defining what represents suitable S/R zones can become a subjective exercise).

    • Chris Capre

      Hello David,

      Up early in NZ as its only 6am your time me thinks now.

      RE: Your Comments
      Hmmmm, seems like there is a mis-understanding here and some points missed.

      What is the goal of this martial arts analogy?

      To demonstrate a particular style of thinking and mindset is a flawed approach. And I think this analogy does a good job of this.

      But I’m glad you agree that there is a greater edge in entering at a key level.

      However your comments about ‘S/R levels being frequently broken‘ equally applies to such magical 3 price action patterns. Even the proponents of this claim on their own trading (which I’m assuming is using the same methods) to be only 30-50% accurate, so where is a real edge in using these patterns if they produce far lesser +R per trade?

      There isn’t.

      Now getting back to the point of ‘S/R levels are frequently broken‘…this statement really isn’t saying anything now is it other than the obvious. We aren’t trading any typical S/R level, so the fact that levels as a whole get frequently broken doesn’t really apply to a more nuanced version we are working with.

      So unless you can demonstrate that the ‘effect of the overall win rate is lower‘, this statement isn’t saying anything, other than our method simply has a far superior edge.

      I’m working under the general notion (and my students live track records further support this) that a) our win rate will be (at worst) right about the same (if not better as many of our profitable students are above this 30-50% accuracy range that such ‘authorities’ claim for their own performance), and b) based on the above, our edge will naturally be greater.

      And if my profitable students are performing at a higher win rate than such price action signals, then our edge is only further magnified.

      So in essence, you are actually agreeing our method has a greater edge.

      Regardless though, this is aside from the fact of what this podcast is about – in showing how a particular approach and mindset towards trading is a flawed approach, and I think we accomplish this when people really understand the different perspectives.

      And if we want to compare our profitable students to the methods of the 3 Kicks is all you need to win a fight camp, I’ll be happy to run that test and see who has the greater edge.

      But thanks for your comments and sharing your perspective.

      Kind Regards,
      Chris Capre

  • jimtech

    Thank’s for the article, Our goal’s is to make money. Great article, thank’s again and more grease to your elbow. SAVE TRADING.

  • Jake

    I’m sorry, but aren’t you used to trade with the pinbar or engulfing in your earlier course?

    • Chris Capre

      Hello Jake (if that is your real name),

      RE: Your Question
      Hmmmm, there seems to be a misunderstanding here.

      First, I’d suggest reading through the series of articles again to understand what is being said here as it seems like you missed a few vital points.

      Second, unless you are a member of my courses (which this email is not showing up as being a member), perhaps you should understand how we trade things differently.

      Otherwise we are just talking assumptions here aren’t we?

      Kind Regards,
      Chris Capre

  • Alex Fiori

    Hahahahhaaaaaa… I laugh so loud when I read about the J16 derivatives, I paid my membership to the J16 group for some months in 2008, and this year I heard about this new gurus teaching pin bars, bovb and inside bars and charging tons of money for a system that can be found on FF. I even heard someone talking about kangaroo tails hahaha. Finally someone teaching something fresh about PA, thanks a lot for sharing all this. Regards from Brasil.

    • Chris Capre

      Hello Alex,

      Yes, they (Nial Fuller & Jonathan Fox) are definitely derivatives, some even derivatives of derivatives.

      But yes, we are (and have been) teaching a fresh approach to PA away from the freshman perspective that goes hunting for pin bars and inside bars, so glad you like it.

      Kind Regards,
      Chris Capre