Studying basic trading and browsing
multiple Forex resources, Forex beginners may conclude that the technical
analysis is wedded to indicators and expert advisers. Although most traders
surely use them in everyday trading, there are those who consider indicators to
be nothing else but obstacles to gaining profits. They prefer trading without
indicators, or the Price Action trading.
Price Action fans are confident that
trading will become really effective only if any additional software, economic
calendars and news feeds are dismissed and traders fully pore over price charts.
Have you ever heard a phrase: “the
price discounts everything”? It means that anything besides it is just factors
which may directly or indirectly influence the market. In other words, the
price is the final result which should lead a trader in his decisions.
The price is the key Forex element;
the Price Action method enables a trader to concentrate on the price and do not
squander his energies on minor elements.
This approach seems quite sound:
charts reflect the reality that has already happened. You will not be misled by
contradictory signals or continuous news feeds. If you know how to read a price
chart, it looks very simple.
Price Action traders are certain
that the price gives hints to forecast its direction. If you learn to analyze
price fluctuations, you will have a base for making efficient decisions,
improving your strategy and finding your sea legs in trading. Certainly, you
will not need to exclude other analysis methods from your strategy. However,
advantages of mastery in price charts would be hard to argue.
Price Action simplifies many aspects
of trading and enables easing emotional tension; you will not need to decode
indicators or analyze economic news.
Being a private Forex investor, you
should monitor major market makers to gain profits. Although market
fluctuations come in zigzags, there is always a trend. Furthermore, history
tends to repeat itself. Therefore, if you base your strategy on specific
patterns, your chances to profits will increase. The Price Action method has a
number of such patterns called price patterns, which Forex experts consider to
be extremely informative. According to them, beginners should start with daily
charts that better reveal trends and facilitate analysis.
The main principle of Price Action
is that indicators provide inaccurate or outdated information while price
charts give comprehensive and credible data. If you learn to monitor price
movements, you will understand market principles and find the tight time for
entering or quitting the market.
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