Know Price Action Technique
What is Price Action? and why do forex traders have to learn about Price Action? and what are the benefits of Price Action? Let’s discuss a little about trading strategies using the price action method.
What is Price Action?
Price action on forex trading is price movements and is included in technical analysis. For example, a forex trader might say that securities price actions give credibility to rumors of purchase. Many short-term forex traders depend exclusively on price action to make trading decisions. Technical analysis is a derivative of price action that can be used to inform forex trading decisions.
What are the benefits of Price Action?
Lots of people ask, can we make a profit just by understanding the market behavior or the cool language “Price Action”? Yup, of course you can because besides we get a picture of the trend of interest of market participants. We can also open buy / sell in the right direction.
Then How to Read Price Action?
Traders use a lot of methods to read price action, it’s fine if it gets profit and position in the right direction. However, sometimes there are also many beginner traders who misinterpret and read the strategy with this price action method.
In addition, the advantages of using the price action strategy itself is the simplest strategy in forex trading, which is only to see each candlestick pattern on the chart. Meanwhile the chart will look clean without an indicator in it.
There are several important points in studying price action, namely;
- Analyzing the direction of the trend
- Study candlestick patterns
- Learn chart pattern patterns
- Study the pin bar
- Open position in the right direction
- Placing the correct profit target and stop loss