Price Action Trading - A Forex Trading Education

  

I'm just going to touch on a forex trading education that nobody else seems to talk about:  the concept of price action. It has been around since the first trade was taken in the stock market.

So it's really surprising to see how many people aren't fully aware of its power.

price actionUnfortunately we (traders) have gotten a bit too lazy throughout the years.  We'd much prefer to let a machine, or an indicator tell us what's what, instead of figuring it out for ourselves.

Nowadays, you can find your own special indicators, mechanical trading systems, trading robots, etc... anywhere online.  Just pick any forex forum.

But how often do you hear about price action? My guess is not too much.

It is a bit of a broad term, which is why I think most traders dismiss it, and go for the easy shortcuts. But they don't see all the information they are missing.

For example:

Price action patterns: Have you ever just sat down and looked at a basic price chart with no indicators, and just focused on what the price was doing.  If you did, you might have noticed that there a patterns in which the price movement constantly duplicates and can provide an insight as to where the future price is headed.

The Trend: Ah...yes the trend.  It's a word you hear a lot about but most traders wouldn't be able to spot it, if you gave them a road map.  I'll give you a clue.  It has nothing to do with moving averages.  As pretty as they might look on your charts, they won't tell you where the trend is headed.

Support and Resistance Areas: I'm sure many of you who use a Metatrader MT4 charting platform, probably have the custom pivot indicator that gives you the 3 support areas and the 3 resistance areas. Don't feel bad.  I used those  (as well as forex expert adivsors) too when i was first starting out. But the truth is the REAL support and resistance areas can't be calculated.  It's just not that cut and dry.  To find out the real, there is only one place to look, and that's in the price action. There is no indicator that can just spot it for you. 

 

 

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