Wednesday, 6 November 2019

Trading Method with Price Action

This article deals with the concept of 'specialization' in forex trading, where the Price Action trading method is one of its parts. Forex traders are a profession, and like other professions in general, specialization is always more profitable. A specialist will certainly carry out the execution with full calculation. It's different from an amateur who carries out executions carelessly and doesn't know the risks behind them. Many forex traders tend to try to analyze several variables at the same time, especially traders who do not yet have a certain method and strategy to be applied in daily trading. What they do is combine several technical indicators at once, see several currency pairs in various time frames and read the development of various fundamental news. Instead of getting enlightenment, they are confused because this method is clearly ineffective. They intend to understand market price movements with too broad a scope, but instead increase the risk of doing Over-Analysis. In fact, traders are actually quite focused on one method as the main analysis model. Well, one example of analysis that is widely studied and used to execute in forex transactions is the Price Action trading method.

Advantages of Trading Price Action Methods The main advantage of this one method is that its use is relatively simple. We just need to focus on the pattern of market price movements as they are, and pay attention to the levels of Support and Resistance. Technical indicators are very minimal to use, usually only Moving Average indicators for confirmation.

The time frame was chosen because there was not too much noise, thus avoiding the risk of false signals. If one of the Time Frames has been formed in its Price Action setup, then it doesn't have to be compared with larger or smaller Time Frames. Being accustomed to using the Price Action method in a disciplined manner, traders will not hesitate when opening a position, because the trading signals generated are usually quite valid.



Example of Applying the Price Action Trading Method Applying the Price Action trading method starts with determining market conditions, whether Trending or Ranging. In general, Price Action traders tend to choose to avoid opening positions when market conditions are Ranging. They choose to wait until the market determines the trend, whether downtrend or uptrend.
After applying the steps of the Price Action trading method above, what should not be forgotten is to determine the Risk / Reward Ratio. Calculation of this ratio can be 1: 1 or 1: 2, according to the agreed Money Management strategy. To further maximize profit expectations, you can use several trading facilities provided by MetaTrader, such as:

After applying the steps of the Price Action trading method above, what should not be forgotten is to determine the Risk / Reward Ratio. Calculation of this ratio can be 1: 1 or 1: 2, according to the agreed Money Management strategy. To further maximize profit expectations, you can use several trading facilities provided by MetaTrader, such as:

Trailing Stop, a feature that can shift Stop Loss from a position, follows the price movement in one direction. This makes Trailing Stop moving (not static) Averaging, which is a step to add (open) new trading positions when we already have one or several positions that are open.

Also Raed : This is an Important Secret Why Indicators Move in Different Directions With Prices

 By analyzing the current market conditions, we can decide on the most logical exit strategy, and whether it is still possible to open new trading positions with the same exit level in these market conditions.

Pyramiding, namely the addition of a trading position when the price moves according to predictions (currently in a profit position) without increasing the risk. But, keep in mind: Many traders find it difficult to use a pyramiding strategy, because they don't change their Stop Loss level to reduce risk.

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