Friday, 25 October 2019

Some Things About Price Action You Need To Know

Market conditions always change from time to time, as well as its volatility. At one time market price fluctuations can be very high with a large daily trading range, but at other times the market can be silent almost motionless for a certain period of time. When volatility is low many traders complain about whether there is something wrong with the price action. Although they trade by observing price action, they may not understand the price action itself. There is nothing wrong or right in price action, price action only reflects the market reaction to the sentiments of the perpetrators.



1. Price action is not a trading system Many traders think that price action is a rigid trading system and must be run according to certain rules. Price action is not a trading system that implements many technical indicators, but rather discretionary trading which is based more on experience and does not rely too much on technical indicators. So far there is no trading software programmed based on price action.

In trading with price action observations, calculation is not required such as technical indicators but rather observations of market movements that change according to market sentiments. Most professional traders use discretionary trading, which certainly cannot be separated from observations on price action.

2. Price action is universal and can always work Some traders have complained like "this time the price action method is not working" or "there might be something wrong with the price action". Trading based on price action observations has been used in Japan since the 18th century to predict rice price movements along with the introduction of ways to read market price movements with candlesticks.

Also Read : Candlestick Formation in Price Action

At that time no indicator was used yet, and until now, 300 years later, candlesticks and price action observations are still used in trading. Trading with price action is how to read candlestick patterns naturally, and this can always be applied because the sentiment patterns of market participants will tend to recur including greed and fear (greed and fear) which is always reflected in the pattern of price action.

3. Price action is not just a series of candlestick bars Price action is not just a row of candlestick bars with certain formulas, but shows the overall market movement driven by market sentiment. The longer you observe market movements (or the higher the time frame trading), the more you will understand market sentiment.

4. Consistency and discipline are needed to understand price action Unlike technical indicators that can be quickly understood, interpretation of price action requires time and experience. To understand patterns of price movements that change according to market sentiment you must be consistent in your practice and discipline.

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