What You Need to Know About Price Action Trading in Forex


Price action trading is a systematic conceptual trading practice. It is aided by technical tools and recent price history. In price action trading traders are responsible for making their own decisions.  

 

 Who Uses Price Action Trading? 

 Price action trading is all about price prediction and speculations about market trends. It is usually used by retail traders, speculators, and even trading firms that employ senior traders. Using this method one can trade on a wide range of securities including forex, bonds, equities, derivatives et cetera.  

 

What Does Price Action Mean? 

Price action rate first to pattern or characters of change in the behavior of assets and securities. It is analyzed by the graphical presentation of the price change over a period of time. A line chart or candlestick chart is used for analysis.  

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 Step By Step Guide To Price Action Trading 

 Most experienced traders use price action trading and several trading strategies. One strategy may not be sufficient to offer enough opportunities to a trader. Therefore in most cases, 2 steps are followed by a trader-  

  • The first step is to identify a scenario, such as a bull or bear phase, breakout, etc. 
  • The second step is to identify trading opportunities within a scenario. Different traders identify different opportunities in the same scenario, therefore it is quite subjective.  

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Why Price Action Trading Is So Popular? 

 People who are interested in short or medium-term investments are fond of price action trading the most. This trading type is not suited for long-term investment strategy. Using technical analysis tools and recent price history it is quite simple to determine trading opportunities.  

Advantages Of Price Action Trading:- 

  • Self-defined strategies are flexible for traders. 
  • It is applicable to multiple trading assets. 
  •  Easy to use with any type of trading software.   
  • Easy back-testing options are available. 
  •  The trader can control all the actions and make their own decisions. 

 

The Bottom Line 

A lot of strategies are applied to price action trading, and each of them claims high success rates. Price action trading has the potential to make a healthy profit. But the success actually depends on the individual trader and their understanding



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