There are many types of traders, all of them use some kind of technique. It can be either based on price action, indicators, or can be statistical or algorithmic-based or order book traders. Everyone has their own kind of method or strategy.
I am a type of trader than rely solely on price action alone. The big word isn’t it? PRICE ACTION!
Well, it is not that hard as it looks. Many of you might have heard about it or not. The thing is it is probably the simplest trading also one of the most effective forms of trading.
What Is Price Action Trading?
It is the type of trading in which you won’t use any indicator and rely solely on the basis of what the price is doing. I will be covering some basics regarding how to read the charts with some Price action (PA) tools and concepts.
What are the benefits?
- It is very time efficient as analyzing using only PA techniques you can just tell by looking at the chart what is going on. Whether you want to enter the trade or wait for the trade or look for opportunity elsewhere.
- You will always be one step ahead of the other traders because you will be getting much more discounted entries. See, most indicators will give signal after the move has occurred instead you will get the info hands-on real-time.
This is how a chart of a typical PA trader looks like:
Price action trading is perhaps the easiest but it requires a lot of time and practice to learn this. It can’t be automated so you need to manually execute your trade. Just like any other strategy, it is not 100% perfect. But, with practice, you can achieve a higher level of accuracy so that your winners will be greater than the losers.