How to Increase Your Chances of Success With Price Action Trading
One of the greatest ways to trade the forex market is price action trading. If you are new to trading for or are looking to change your trading style, price action trading may be the method to go. It has got the characteristics of being a time-tested trading strategy that has been around for quite a while and features a great track record with good results. If you're a new comer to trading the forex market, you have probably heard of several trading strategies but none seem to really fit. The most effective strategy might not be the strategy that works for everyone.
Most traders focus on indicators when looking to trade the forex market, but price action trading offers a unique method of entering and exiting trades. This really is possible as it is based on technical analysis tools called the MACD and candlestick charts. The MACD uses moving averages, volume charts, and other price based indicators to ascertain where the purchase price is moving with a group period of time. This type of price movement is regarded as being the common price movement over a specific period of time. To use this kind of price action trading , you only set up your charts so they show the moving averages and then plot a line through where the purchase price is moving.
Candlestick patterns are very similar to the MACD with one exception. When utilizing candlestick patterns, the cost action trader will even draw a point through the middle of a candle. This type of chart will show the open and the close, with the middle of the candle representing a top volume closing. The candlestick patterns are very effective in price action trading strategies because most of these trading strategies rely on where the cost closes and opens within confirmed period of time.