Price action trading is the method of trading using simple charts with few or no indicators, i.e. a clean chart. You will analyse the market from psychological and confluent levels where the big boys look into, for moving the markets.
All financial markets generate data about the movement of the price of a market over varying periods of time and this data is displayed on price charts. Price action (PA) reflects the beliefs and actions of all participants (human or computer) trading in a market during a specified period of time. Indeed, the economic data and other news events are the catalysts for price movement in a market. But we don’t need to analyze them to trade the market successfully. The reason is pretty simple: all economic data and news that causes price movement within a market is ultimately reflected via PA on a market’s price chart.
Since a market’s PA reflects all variables affecting that market for any given period of time, using lagging price indicators like stochastics, MACD, RSI, and others is just a flat waste of time.
The real trading is not dependent on these above said indicators. The truth is that all indicators are lagging, i.e. the price of the share/currency/commodity moves first and then the indicator follows.
Let us say you are trying to place an order based on the moving average crossover and the moment when you place the trade, the market reverses, and then, the indicator follows. Have you noticed this situation too often? I know that many of you might face the same situation. The PRICE moves first and not the INDICATOR. In the real world of trading, the situation is the same.
Trading the markets is a skill that you can develop if you are passionate enough.
“Clean” Charts vs. “Messy” Indicator-laden Charts
Above 2 charts are of Indian index – NIFTY 50. You can see the first one is a plain chart with no indicators.
Second one is same chart of NIFTY 50 with lots of commonly used indicators.
Price moves first, then indicators follow; not the other way round.
Most of the traders spend some much time wasting swapping between these indicators to find out a holy grail.
Moreover, due to these cluttered indicators there is no space for us to analyze the charts properly.
Trading is a skill which we can be developed by proper training from the right mentors/traders.
Our training on price action trading helps you to understand the real price action in the markets and what is going to happen in the very next moment. Regardless of your status as an intra-day trader, swing trader or long-term investor, you should learn the technical analysis of price action before you start investing your real money.
We welcome you to a new world of trading – Price Action Trading Strategies.
If you are passionate to become a trader please join the training program. We assure you that you solely love this method.