Resolved Question
How can I formulate a method totally based off of price action?
I don't really like the indicators that a given to you with most trading packages, they lag and can often misguide you. Learning how to read price action might be more difficult but I feel I would really be learning how to trade, not learn an indicator. At the moment I am leaning s+r lines, pitchforks and candle patterns. How can I make a plan/method totally based off of price action? I know the indicators; when ema 5 crosses ema10 buy etc etc. Rules, guidelines etc etc. I don't want to leave entering and exiting up to a 'hunch'
Thank you
about 1 year ago
Best Answer - Chosen by Voters
Through experience and deliberate practice. Learning to read price action isn't a rock hard science... I've uploaded a couple of links below to answer your question. They are a bit long, but I think they will greatly help you in formulating your "price action" trading method.
Here's an excerpt:
"A very critical process that happens is learning to TRUST what you've learned. Sure, a double top or a hanging man looks great in a textbook, but you have to learn to not only identify it, but see it in action enough times to know that its not simply a myth. Equally important is to identify it in the right CONTEXT of the market. This allows you to trust the pattern, and see where the setup will work better and where it won't likely hold. These elements are absolutely crucial to building the level of trust you need in developing a strategy, and the only way to do it is to intelligently observe the market as often as possible. "
about 1 year ago
Source(s):
Answers (2)
Hi Gmichaelz,
I too don't use indicators when I trade.
I always found the combination of these 3 tools to give me the best results; candlesticks, price action, and trend. Each on of these tools deal with a specific part of the market for example,
Candlesticks = Buyer / Sellers Behavior
Price Action = Resistance lines
Trend = Up, straight, or down
Hope that helps !
about 1 year ago
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Best thing to do is observe price action, notate tendencies, and then backtest the heck out of your ideas and theories.
Eventually, you will widdle away the ideas that don't work often and keep the ones that do.
Remember that trading is more than finding that market setup that gets you in the trade, but its the actions you take to when the trade goes with or against you that counts as well. Sometimes you can have a great entry, but if you mismanage it or exit too early, it's a great idea wasted... and vice versa.
about 1 year ago
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