To understand price action, you must study what happened in the past. Then observe what is happening in the present and predict where the market will go.
Price action is among the most popular trading concepts. A trader who knows how to use price action correctly can often improve his performance and his way of looking at charts significantly.
The key to reading price action charts is to take in short-term fluctuations. It’s also critical to notice emerging trends and focus on patterns that repeat repeatedly. You will hear talk of swing patterns, support and resistance, wave analysis, trendlines, and moving averages, to name a few different chart patterns.
The key to any successful price action trading strategy is to remove peripheral noise, such as fundamental data, and look at price patterns, trends, and other forms of technical analysis. Combined with good old-fashioned experience and “a feel for the market,” this can create a very high potential investment strategy. Don’t forget even if you have opened a position based on the following price action trading strategies, you can also use the technical data to set stop-loss limits.
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