Professional traders use the different style, techniques and trading strategies to trade the forex market. One of the most popular trading strategies in today’s forex market is “Price Action Trading.” Price action trading involves the study of rice price data and finding high probability trade setup in the forex market. Traders use “Bar chart and candlestick Chart” to trade the forex market with price action trading strategy. This technique is very simple which is most based on candlestick formation in the support and resistance level.
Price action trading is highly profitable in the longer time frame. Professional traders use the naked chart to read the price action data. The best thing about price action trading lies on clarity and high reliability. Trades are able to extract clear information and trade signal from the forex market with a high level of accuracy. Trading strategies which are based on indicators and complex tools are much more unstable than price action trading .Using lots of indicators in the chart creates mass confusion in the mind of trades which leads to trade the false signal. “Most importantly indicators hide the true price movement of the forex market.”
The longer time frame is always preferred by professional traders since lots of false signal and spikes are easily filtered out. The main advantage of using Price action trading strategy in the longer time frame is, traders don’t need to look at many indicators and oscillators. They simply trade the raw price data. Instead of indicators confirmation, “Price action traders look for reliable chart patterns, continuation and reversal single in the longer time frame.” They buy at the support and sell at the resistance with price action confirmation in the longer time frame.
“Trend is your friend” a well-known proverb in the forex industry. Professional price action trader never looks to pick the top and bottom of a pair. To be precise they don’t take trade against the trend. Due to the simplistic trading methodology of price action trading, many traders might often get confused with price action trading strategy. They will be wondering that thousands of indicators have failed how come this simple price action trading strategy can make them successful. But, “Simplicity is the Key to Success.” In reality, price action trading is the most versatile trading strategy in the forex world since it allows us to identify the next possible price movement with the help of raw data analysis.
A simple price action pin bar rejection trading strategy with the confluence of support, resistance and trend line is capable generating high reliable trading signals. Like other indicators price action trading doesn’t require wider stop loss. The unique advantage of price action trading remains with the use of tight stop loss and predefined take profit area. Money management, the golden rule of forex trading should be strictly followed regardless of trading style. “No trading system in the word is perfect”. So, without proper money management, no one will be able to survive this lucrative financial market. Though trading with price action setup is highly profitable and super easy in the forex market, traders must spend a considerable amount of time to master the art of price action trading.