What Are Price Action Trading Strategies?
Price action strategies use technical analysis of recent price fluctuations and movements within current market conditions to find opportunities, rather than simply relying on different technical indicators from the simple moving average to the more advanced Bollinger Bands.
The price movement is represented in the form of “bars” in forex charts. Forex traders study the natural or raw movement of currency pairs over a certain time frame and try to identify the best times to either buy a particular currency pair, or to sell it.
The currency market is highly volatile. It is prone to various factors such as news items, government reports, etc. which affect the buying and selling prices of currencies. For those that engage in forex trading, it is next to impossible to study all these factors independently to determine either support or resistance areas, or other significant trading points before carrying out a trade since it can become both very complicated and time consuming
Forex charts show the price movement of currency pairs. Rather than focusing upon all the factors responsible for its movement, it shows the net result of how these combined factors, have affected a currency pair over time.
Day traders can reduce trading complexity and save a lot of time and efforts by studying the price movements of currencies in charts.
How to use price action trading strategies in the Forex market
Price action strategies can be used to analyse price action patterns in any of the financial markets. However, it is ideally recommended for forex markets owing to their volatility, creating clear swing highs and lows. Even though graph indicators are very useful for understanding the price movements, they should be stripped off from the graph so only the price bars remain. It often makes the graph much more easy to understand. Forex traders can avail important insights at a glance by studying such graphs. They can use their findings to determine the best times to leave and re-enter the markets during their day trading sessions, and set appropriate and effective stop losses for long term trades.
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Graph with indicators | |
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What are price action trading setups?
Using a raw price chart, one can find the best time to trade by using price action setups. There are a number of price action trading setups including Retracement setups, Reversal setups, Range-bound setups, and Break-out setups. These are considered the main 4 kinds of setups.
Are price action trading strategies included in Platinum’s Trading Courses?
Our courses cover an incredible number of forex trading strategies, including of course, price action strategies. You will be taken through the most sophisticated and comprehensive trading education packages available in the world, enabling you to trade with the confidence and surety required of a professional and successful forex trader.
