16 Reasons Why You Need To Learn To Trade Forex With Price Action

Below are a few reasons why every forex trader should at least consider trading forex with price action as an integral part of the trading toolkit:

  1. Price action provides the most representative data of the trade in real time available to the merchant off the floor. Pit traders are often several steps ahead of other traders because they have direct access to market data. When you trade forex with price action, you get first-hand information about the markets, unfiltered by the often ambiguous math that characterizes indicators.
  2. Often leads/flows with critical news reports and it is not as vulnerable to its volatility as regular indicators are. Most indicator-based systems would tell you not to trade at times when major economic news is being released, because price volatility at those times leads to many chaotic and unreliable signals. With knowledge of specific price action signals and the right training, you could even take advantage of the news to make big profits.
  3. Chandeliers are not repainted. Many indicators are notorious for repainting, especially with rapid price changes. A trading signal could disappear in a matter of minutes, only to reappear at another price cross, probably taking your share of the trade with it. However, the chandeliers, once completed, turn to stone: they are events in time that cannot be changed. Your price action patterns may not always be easily read or translated into trading signals, but you can be sure that a candle once completed on the chart will not change its shape, nor will you see a lengthened or shortened wick or tail on the chart. her as time goes by. happens
  4. Allows you to focus on the Number An indicator – price. Most indicator-based systems contain so much detail and require you to check so many variables that often the trees can barely see the forest. There is a common truism that as human beings we can only focus on one or two things at a time. The person who trades in forex with price action analysis is forced and trained to focus on what really matters, the price and its rapid changes in behavior, and adapt quickly to them.
  5. Price action analysis generates valid signals before conventional indicators do. Price action signals allow you to identify the beginnings, cessations and continuation of trends. They are not late; in fact, by understanding the dynamics of market flow as described in our articles, you will sometimes learn to ‘amush’ the price and wait for it to make easily predictable moves.
  6. Price action signals work in all market conditions. One of the main flaws of custom indicators and automated systems is that they work optimally when a particular market condition dominates: the trend can be strong or flat. Once these conditions change, as they do all the time, the indicators or robots start to underperform and users would end up giving some or all of their hard-earned gains back to the market. However, most price action signals excel in all market conditions, flat or ranging.
  7. They are more rational, easily understandable and clearer to decipher. They provide a rational explanation for the often chaotic and uninterpretable price movement on charts.
  8. Because they are easily identifiable and unambiguous, they allow the trader to focus on developing trading discipline. Once you’ve decided on the particular candlestick patterns you want to monitor, you don’t need to spend countless hours trying to ‘tweak’ your trading system. With a good understanding of money management and risk/reward objectives, you can focus on improving your objectivity when trading the market.
  9. Price action analysis and signals are based on full Japanese candlesticks, so there is no need to sit and monitor charts for extended periods. Yeah it is a fifteen minute, four hour or weekly chart that you use when you want to trade forex price action, since you can only make valid decisions from completed price bars, you can easily time your chart around the completion of these bars. This allows for much less anxiety and reduces doubt and interference with your trades.
  10. Price action signals are even more reliable on higher time frames, allowing for more profit while spending more time off the charts. Most trading systems read trends better and generate fewer false signals on longer time frames. Reading the price action allows you to take even better advantage of higher time frames and increase your profit potential.
  11. Some specific price action signals are among the most accurate trading signals available. Pin bars, for example, provide excellent profit opportunities for scalpers as well as longer-term traders; Taking such signals in line with major support and resistance zones leaves little room for error compared to using trend indicators or similar tools.
  12. Allows you to set entry prices, stop losses and profit targets with greater precision. Because one can focus directly on price dynamics instead of what various indicators are saying, one can stay in line with price movement and predict its behavior.
  13. It allows you to assess support and resistance zones more correctly and to predict and interpret how the price interacts in these zones. Locating and identifying support and resistance points is critical to success in any financial market, and forex trading is no different. With a thorough understanding of price action signals, one can deduce where price would act relative to these areas, often long before conventional indicators do.
  14. Price action analysis can be used on any time frame, so it adapts to different trading patterns. Although shorter time frames tend to be noisier and generate more false alarms, by evaluating support and resistance areas, drawing trend lines and channels, Fibonacci indices and the like, one could develop several highly profitable trading systems even when you learn to trade forex with price. action in the shortest time frames.
  15. It works with all currency pairs. Since it describes the actual activities and psychology of traders trading these pairs, similar principles apply behind price movement across all currency pairs, and the more you trade forex with price action, the easier it becomes for you. identify repeating patterns.
  16. Price action analysis is based on the fundamental dynamics of market movement, so it will not be out of date. It is a well-known fact that automated systems never work successfully ad infinitum; eventually its performance declines. Various indicator fads may come and go, but price action principles will remain as long as financial markets exist and are fueled by the forces of supply and demand, and warm-blooded human beings with their varied emotions participate in them.

Leave a Reply

Your email address will not be published. Required fields are marked *