Resolved Question
How to use price action technique?
about 1 year ago
Best Answer - Chosen by Voters
There are some traders who rely solely on price action in trading. For example, they may look at wicks and shadows of candle sticks as an indication of buying or selling weakness. The may also look at specific candlesticks as a sign that there could be strong move in play (engulfing candles) or that the trend is dying and a reversal may be in place (dojis anyone? ). Other traders may also study price action as a way to help spot better entry and exit points for trades and combine it with other strategies. For example, a trader who likes using horizontal support and resistance levels on longer time frames could scale down to the 1-hour or 15-min candles and see what price action is saying. Are the support / resistance levels holding? Are there any signs that it will continue to do so? In any case, observing price action could be a great tool in your trading tool box. Yes, it may be difficult to master, but like any trading tool, with time and experience, you will begin to understand how to incorporate it into your trading strategy.
about 1 year ago
Answers (2)
Like cyclo said, there are various ways to use price action technique: price history sup/ res, candle stick formations, chart patterns, and lately, lot of traders define trading without indicators is price action trading. It means specific method like fibonacci and andrew's line are one of pa technique. The bottom line is, pa analysis is based on what price is doing and behave in the past without recalculate them into another form to forecast the price
about your question how to use it, my best answer is in 2 words: screen time. In the beginning it is hard to find where is the sup/res line, how to draw trend line, finding head and shoulder formation, etc etc. But soon when you put your time more in front of your pc, you'll find it easily and even know when to enter/ exit trade profitably. Just remember one thing, trading based on price action will be one of most subjective trading method so your analysis and point of view may be different with another trader. Just trade your own chart and find the most suitable tools for you. If it works, go on. Other may go long while you short and both of you may come out as a winner. Weird eh? But that's the beautiful side :d
oh one more thing, it is ok to trade based on pure pa or with super duper complex indicator as long as you are comfort with them. Do not trapped with which methods are best. As for me, fib, round numbers, trend line and moving average are enough
just talking anayway :)
about 1 year ago
* You must be logged in to add comments. Sign In or Join Askpips.com.
There are plenty of ways to come up with trade strategies based on price action. You can use technical indicators, chart formations, or candlestick patterns. Check out these lessons on the BabyPips.com School of Pipsology:
about 1 year ago
Source(s):
* You must be logged in to add comments. Sign In or Join Askpips.com.
Resolved Questions in Technical Analysis
- Can I use DailyFX's prices with support and resistance?
- Can someone explain to me what "Two-bar high/low" is?
- In determining overbought and oversold periods: 1) what's the difference and 2) what are the best indicators?
- How many indicators have you been using to confirm a possible trend formation?
- Why do we use technical indicators? What do they do?
* You must be logged in to add comments. Sign In or Join Askpips.com.