In the Forex market, there are a lot of trading strategies available on the internet. However, traders often find it challenging to identify the correct trading strategy that can provide maximum benefit.
In this section, we will see a price action trading strategy that is suitable for new traders.
There is a lot of retail trading strategy available on the internet. Moreover, many trading strategies have created by famous mathematicians and analysts. All trading strategies have some unique methodology and unique characteristics that do not compare with another. Means one plan can be usable by a person at the same procedure might bring loss for another trader. Identifying the right trading strategy is the key to be successful in the industry.
Forex trading requires patience and practice to be successful. However, successful traders use the same trading strategy what new traders intend to use. There is no rocket science for magical methods that dream money to the successful traders only. The challenge for the new traders is to follow the trading methodology and rules very strictly.
For example, where a trade setup appears to be very lucrative, but one of the trading conditions is not allowing. In that sells a retail trader who is successful in the industry could not take the trade and leave it and wait for another setup to come. On the other hand, you traders my think if he does not take the trade, you will use that money or not willing to miss the trade as it seems like they look pretty. So for new traders and beginners, it is suggested to use a trading strategy that is not complex at that is easy to you but profitable.
In the following section, we will see what the price action trading is and how you can make a profit from price action trading.
It would be pretty confusing to see price action for the beginning traders. As we know, price action is a vast concept, and there are no specific rules. Therefore, most of the traders use price action as a part of their trading strategy. For beginner traders, price action trading means the simple concept of selling from the resistance and buying from the support. Many professional traders use these concepts and make massive money from the financial market.
There are three types of trading systems for new traders as a part of price action. For example, when the price is within a range, traders can use the concept of sell from resistance and buying from the support to make the maximum benefit. On the other hand, when the market is heading with a strong bearish trend, any break of the support might make it as a resistance. Therefore it will be an opportunity to sell from there resistance as a continuation of the bearish trend. The same thing applies to the bullish market as well. If the market moves within a robust bullish trend, any break of the resistance might make it support.
Therefore, it would be an opportunity to buy from the support in the bullish trend. For this price action, traders should trade on the current trends. For price action traders, It is essential to know what is happening in the higher time frame. The higher time frame always provided accurate results as the be investors use it.
In this section, we will see step by step approach how you can get yourself involved in the price action trading:
Market context is the key to get into the price action trading. Every financial market moves with the same context. When an impulsive bearish pressure comes, all retail selling opportunities will work well. On the other hand, no strategy will work well when the market is within volatility. Therefore, we should follow the concept of market context well:
After understanding the market context, the traders’ duty is to understand what big players are doing in the market. As we know, big players play with a more significant investment they intend to remain on the higher time frame. Therefore, In this strategy, we will see where the price is heading in the weekly time frame.
The critical levels in the weekly time frame are known as the key levels. If the price goes below the key level, the overall market outlook is bearish. On the other hand, if the market is above the key levels, it means the overall outlook is bullish.
After identifying the key levels, we will see major support and resistance levels in the daily time frame. Any bullish rejection from the daily resistance levels and bearish rejection from daily support levels will work as a key price sentiment for traders.
However, the main aim of price action traders is to identify the event levels.
What is the event level?
It is the level used for both support and resistance levels. The reason behind the importance of this level is that both buyers and sellers find this level as important. So we will buy and sell currency pairs from these levels only.
Candlestick is an essential price action tool that is used by most of the price action traders. Any reversal candlestick pattern from an event level will create a potential trading opportunity. In the daily or 4-hour chart, we will wait for the reversal candlestick pattern for taking the entry. The reversal pattern might be the pin bar, engulf bar, or 2 bar reversal.
If we summarize the system, we can find tho following sequential matter-
Always make sure to use appropriate money management for each trade and never take a risk that is higher than the return.
What are the Best Forex Fundamental Analysis Sites?02 Jul, 2020
What is the Best Ichimoku Cloud Trading Strategy for the Forex Market?01 Jul, 2020
What is the Best Fibonacci Trading Strategy in the Forex Market?29 Jun, 2020
Simple Day Trading Strategy in the Forex Market
Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.