As a trader, you are always on the lookout for the best Forex Trading Strategies. And using Forex price action strategies is the best way for you. You can use this strategy to ensure the most returns on your investment. In Price Action, you just need to read the charts of your currency pair and identify the entry and exit triggers. You only require the knowledge of moving averages like SMA and EMA to understand charts.
What are the Forex price action strategies indicators?
Charts you study when using the Forex trading price action strategy are called simple charts. Such charts are without any indicators like Bollinger Bands, Stochastic or other complex parts of a chart. You should use a chart without any indicators which is a naked chart. You only have the price line for your currency pair to analyze. To ensure an effective price action strategy, the charts need to be disbarred from having any indicators or tools.In other words, you have complete focus on the price line without room for any distraction.
What does chart tells you as a trader?
You as a trader need to identify trends of price line to gain profits when using Forex trading strategies price action. These charts tell you the uptrends and down trends within a market. This is the only indicator you need as price action strategies involve only the price line and its past movements.
You have to identify uptrends as that part of price line which has higher highs and lower lows. To put this differently, in a head and shoulder chart, first shoulder can be identified by you with the presence of increasing highs and lows. This is an indicator that an uptrend is on its way. In other words, you identify a downtrend by its lower highs and lower lows. The second shoulder in a head and shoulder chart represents a downtrend.
These are various indicators in a price action trading chart which you use to evaluate your next step in the market.
How to trade Forex with price action strategies?
You can use price actions strategies to ensure high profits by studying past movements of price line. Under those circumstances, it helps you to predict their future movements or potential. Normally, you can spot repetition of the events of the economic and financial conditions prevalent in the countries of the currency. This is known as fractals.
You can use these Fractals to predict the next similar movement of the price line. This helps to assess if a same condition arises in economic or financial world of countries involved. You cannot guarantee an exact movement. Notably it provides the basis of the potential movement of the price line. This is one of the most effective Forex price action trading system.
In other words, when you notice price line on an uptrend position which is established by higher highs or higher lows this is your signal to enter the market. If you have a good knowledge about what will happen in a particular economic situation; that too can be your trading strategy. The Forex price action strategies boil down to how you use the past movements and reactions of the price line for your benefit.
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