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