Why Trading Price Action Is So Important
If you find yourself having a really difficult time grasping the intricacies of the forex market, then you are definitely not alone. There are tons of new and struggling traders out there. I know that if you surf around the internet enough, you will find hundreds of thousands of articles on forex trading. Its enough to give you a headache. I can certainly empathize because I remember going through the same thing when I first started.
It always feels like there an infinite amount of people telling you millions of different things. Most probably tell you about a trading system which uses a whole slew of indicators, and all you have to do is just follow them and you'll be rich, right?
I'm going to have to give you some startling news. Trading with generic indicators like stochastics or moving averages, and using them as your only reason to take a trade, you will not see a whole lot of success trading the forex market. Understanding price action is so critical if you want to make money long term. After all, its the basis of technical analysis.
This is just some of the many reasons to trade price action:
You get to actually see the real support and resistance areas. I'm also not talking about those s/r areas that you get with one of those indicators. The real support and resistance on a price chart cannot be calculated by an indicator.
You can actually understand what the market is doing. You get to see the market's energy and you get to see the underlying reason as to why the market moves the up and down the way it does.
You are able to predict vital turning points in the price. I can't begin to tell you how important this is. What's also great is that you can trade all kinds of time frames. You are not limited to being a short term or long term trader. It goes to show that price action is for everybody.
It makes no difference the kind of market that you trade. You can trade forex, stocks, e-mini. It really doesn't matter because it is so universal. - 23199
It always feels like there an infinite amount of people telling you millions of different things. Most probably tell you about a trading system which uses a whole slew of indicators, and all you have to do is just follow them and you'll be rich, right?
I'm going to have to give you some startling news. Trading with generic indicators like stochastics or moving averages, and using them as your only reason to take a trade, you will not see a whole lot of success trading the forex market. Understanding price action is so critical if you want to make money long term. After all, its the basis of technical analysis.
This is just some of the many reasons to trade price action:
You get to actually see the real support and resistance areas. I'm also not talking about those s/r areas that you get with one of those indicators. The real support and resistance on a price chart cannot be calculated by an indicator.
You can actually understand what the market is doing. You get to see the market's energy and you get to see the underlying reason as to why the market moves the up and down the way it does.
You are able to predict vital turning points in the price. I can't begin to tell you how important this is. What's also great is that you can trade all kinds of time frames. You are not limited to being a short term or long term trader. It goes to show that price action is for everybody.
It makes no difference the kind of market that you trade. You can trade forex, stocks, e-mini. It really doesn't matter because it is so universal. - 23199
About the Author:
If you want to learn price action, then you definitely check out winning in the forex market.
posted by X - Men @ 1:00 AM
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