01.12.2011 Post in Trading

Studying basic trading and browsing multiple Forex resources, Forex beginners may conclude that the technical analysis is wedded to indicators and expert advisers. Although most traders surely use them in everyday trading, there are those who consider indicators to be nothing else but obstacles to gaining profits. They prefer trading without indicators, or the Price Action trading.

pricePrice Action fans are confident that trading will become really effective only if any additional software, economic calendars and news feeds are dismissed and traders fully pore over price charts.

Have you ever heard a phrase: “the price discounts everything”? It means that anything besides it is just factors which may directly or indirectly influence the market. In other words, the price is the final result which should lead a trader in his decisions.

The price is the key Forex element; the Price Action method enables a trader to concentrate on the price and do not squander his energies on minor elements.

This approach seems quite sound: charts reflect the reality that has already happened. You will not be misled by contradictory signals or continuous news feeds. If you know how to read a price chart, it looks very simple.

Price Action traders are certain that the price gives hints to forecast its direction. If you learn to analyze price fluctuations, you will have a base for making efficient decisions, improving your strategy and finding your sea legs in trading. Certainly, you will not need to exclude other analysis methods from your strategy. However, advantages of mastery in price charts would be hard to argue.

Price Action simplifies many aspects of trading and enables easing emotional tension; you will not need to decode indicators or analyze economic news.

Being a private Forex investor, you should monitor major market makers to gain profits. Although market fluctuations come in zigzags, there is always a trend. Furthermore, history tends to repeat itself. Therefore, if you base your strategy on specific patterns, your chances to profits will increase. The Price Action method has a number of such patterns called price patterns, which Forex experts consider to be extremely informative. According to them, beginners should start with daily charts that better reveal trends and facilitate analysis.

The main principle of Price Action is that indicators provide inaccurate or outdated information while price charts give comprehensive and credible data. If you learn to monitor price movements, you will understand market principles and find the tight time for entering or quitting the market.

Added by Svetlana Milyushko,
InstaForex Clients’ relationship manager