Get to know Price Action Signals

General understanding of signals in forex trading is a signal to open a buy or sell position complete with a stop loss level and target profit level. Trading signals can be directly obtained from trading software or robots, or in the form of notifications via sms, email or other communication media from a company or broker that specializes in trading signals.

exemplified how you can obtain trading signals manually by recognizing the formation of the price action setup on the trading chart. In general, there are trading signals that are quite valid and less valid. Trading signals that are considered valid are those that have a high probability. For that we must be able to distinguish between the two and only the entry when the trading signal is valid enough.

1. Find the pin bar with the 'tail' protruding out and showing a false break condition. 

If we find a reversal bar that is accompanied by a rejection at a support or resistance level that is either static (horizontal line) or dynamic (moving average line) until the pin tail 'tail' appears protruding out of the line, then this formation is usually a trading signal with a high probability, or a signal that is quite valid. The 'tail' pin sticking out shows resistance at that level until it has more weight compared to signals from other price actions.

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2. A reversal pin bar with a very long 'tail' is a fairly valid trading signal.

 The 'tail' factor in the pin bar is important. In candlestick bar patterns, 'tail' shows the level of rejection of a certain price. The longer the ‘tail’ is, the stronger the price level experiences resistance which means the market pushes to a higher or lower price. This does not mean that every long-tailed candlestick bar can be made a reference to determine trading signals, of course the position of the bar and certain other supporting factors must be seen. However, the long "tail" is certainly more significant than the shorter one.

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