Interested in Implementing a Price Action Strategy? This is a Can Do Guide
There are many ways you can do to predict price movements, one of the most widely used methods is to use technical analysis. When you use this method, you will use a price movement graph to predict future price directions.
Each financial market will generate market price movement data across various time periods and this data will be displayed in the monitor screen graph. Thus we can understand that technical analysis will reflect the actions of all market participants involved in trading within a certain time.
From the above explanation we can understand that technical indicators will help traders to analyze price movements. The thing that is lacking is technical indicators cannot be 100% able to predict price movements in the market. This happens because technical indicators use data in the past to predict prices.
Price Action enhances technical indicators and helps you to predict market price movements to be more appropriate.
Price Action is a price movement of a currency pair. When you use this way, the trader will attempt to find the pattern of price movements that exist in the market.
Price Action will reflect all variables that affect the market within a certain time period. Price movements in Price Action will give you the signal you need to float the trading system.
The Best Guides and Steps You Can Do When Applying Price Action
If you are interested in using this strategy, then the thing you need to understand well is Price Action is a tool that will help you and not the absolute things used in making decisions.
Simply put, Price Action is very useful to help traders to identify market conditions that are happening. Besides that it is also useful to determine the important points of resistance and support that will affect the market ..
1. Start First by Identifying Market Conditions
The thing you need to understand is that the market conditions that occur are divided into 2 types, namely conditions that are in a trending state or in a consolidated or sideways condition. By using Price Action, you will find it easier to identify these 2 conditions.
Trending market conditions are also divided into 2 types, namely Uptrend and Downtrend. If interpreted simply, then Uptrend is a higher price point condition or Higher High, then there is a higher low price or Higher Low. Other disisis there is an identified Downtrend from a low or Lower High low price and Lower Lower or Lower Lows.
2. Start Identifying Support and Resistance Points
The next step you can do is find out the support and resistance points, and the Key Level. Key Level Analysis is used to setup Price Action in taking positions.These points are very useful because a trend is very likely to return to the same direction.
Due to its repetitive nature, Price Action has a repetitive tendency in various patterns. These patterns are then called the Price Action strategy.
The pattern of repeated price movements or Price Action setups shows a continuation of market sentiment. Thus when traders learn Price Action, they can learn where to predict the next price.
In order to make it easier for you to learn Price Action by using Support and Resistance analysis, you can pay attention to the GBP / USD currency pair chart after Brexit occurs.
When you use Price Action, there will be a warning to you not to take a purchase position when the price forms a new Low. The mistake that many traders make when taking a position is that the price looks very cheap. By using Price Action analysis, you can avoid yourself from taking a position.
3. You Can Use Trading Tools When Will Identify Key Levels
In order to make it easier for you when you will make a decision, there are lots of supporting trading tools that you can use. The traders who intend to study Price Action can use supporting tools such as AutoChartist and Delkos who have the ability to identify Key Levels, market sentiment and price patterns.
Thus, you no longer need to determine important levels in a graph to avoid existing calculation errors.
Read Also: Get to know Elliot Wave in Forex Trading
Many traders use the Price Action strategy because it allows them to predict the market price. This is very useful for perfecting technical analysis that only uses data in the past.
For those of you who intend to use the Price Action strategy, the 3 steps we have stated above can easily be done to get more profits in the future.
Price Action Strategy that we have mentioned above you can use on many financial instruments such as commodities, indices, stocks, and not only limited to forex. In addition to the trading tools available today is also very helpful for traders to analyze the direction of price movements in the market. That way you no longer need to bother to manually calculate the Key Level that is on the forex chart.
If you are still confused with the discussion that we have stated above, please just ask us through the comments column below. We will be happy to answer any incoming questions for you.
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