Why Historical Price Action Is Misleading — and What to Use Instead

by Roger Scott | Feb 13, 2025

See how to trade the market’s “Rush Hour” for next-day payouts

Traders love looking at past price action to make decisions, but here’s the reality…

It’s a lagging indicator.

Every technical tool built on price and volume is backward-looking. If you’re relying on historical price to predict what’s coming next, you’re already behind.

It doesn’t matter if you’re using moving averages, Bollinger Bands or some fancy oscillator — they all react to price, not the other way around. That means they only tell you what’s already happened.

If you think about it logically, price can’t lead price. The only real edge comes from knowing what institutions are doing now, not what they did an hour, a day or a week ago.

And unless you have a time machine, you’re not going to find a technical indicator that accurately predicts the future.

The Power of Expected Move

So if price action isn’t the answer, what is?

The key is the expected move — the price range that the market has already priced in based on zero days to expiration (0DTE) options. This isn’t some theoretical number…

It’s what institutions are betting on in real time.

Expected move is calculated using implied volatility, which factors in what traders and market makers believe will happen, not what already did. That’s a massive difference.

Instead of chasing what’s behind you, you’re working with probabilities that show where price is likely to go next.

How to Trade Smarter

Instead of relying on outdated indicators, start incorporating a stock’s expected move into your trading. If a stock or index reaches its expected move range, you know the probabilities of continuation or reversal are shifting.

That’s actionable.

Take Nvidia (NVDA), for example. If the expected move shows resistance near $140 and price starts stalling there, you don’t need an RSI reading to tell you it’s losing steam.

The data already gave you that level before price even got there.

This applies across the board. Whether you’re trading the S&P 500 (SPY), the Russell 2000 (IWM), or individual stocks, the expected move gives you a forward-looking edge that technical indicators simply can’t.

If you’re still basing trades on past price, you’re playing catch-up. Expected move and implied volatility tell you where the real money is positioning before it happens.

Don’t fall for the myth that price action predicts the future. It doesn’t. The only way to get ahead is to stop looking in the rearview mirror and start focusing on what’s coming next.

I hope that helps!

Roger Scott
Roger Scott Trading

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