Price action allows you to have more trading opportunities in the market effectively without relying on news or other people’s opinions, which is the foundation of technical analysis. Most short-term traders base their trading decisions mostly on price movement, patterns, and trends. Charts that show price changes over time can be used to study price movement. The various charts are used by traders to enhance their capacity for trend, breakout, and reversal analysis. But the primary issue here is that it’s difficult to make trading judgments because there is so much information available, such as chart patterns, trendlines, and head and shoulders yet people can’t trade the patterns the right way, well I am here to help you guys. What is price action let us find out. Beginners frequently wonder, “Where do I start?” What should I look out for? Therefore, I will address six important things to look for in the market. Market Structure, Uptrend, Downtrend, and Consolidation.
1. Market Structure 2. Support and Resistance 3. Entry Level 4. Stop Loss 5. A longer time frame 6. Exit Level
Market Structure A price action trader should first look at the market structure, or the stage the market is in. The structure of the market its either the price is going up or down if the price is moving constantly side ways then the price is consolidating that is where you have to pay attention for breakouts will be known when you started to analyse from HTF then you will go to STF to look for possible entries according to the right direction of the market. To learn more about the structure of the market go to my YouTube channel. https://www.youtube.com/channel/UCEuc7IYRMZOckphv12N6FPg
Uptrend The market is now moving away from the support now, the majority of traders have begun to notice the uptrend has started, which is when they start searching for purchasing opportunities. We identify an uptrend with higher highs (HH).
Downtrend The market is now moving away from the resistance and is heading down to support. When the price is going down, you will see lower lows (LL), which are always found in a downtrend. That is when sellers will start looking for selling opportunities.
Range market When the price rises, bearish traders enter the market and begin taking short positions because they believe the prices are “too high,” which puts pressure on the market to sell. Bullish traders are still making purchases, though, in the hopes that the trend will continue. The market is just moving sideways in the form of a range
This is How a consolidation looks like
consolidates when both purchasing pressure and selling pressure are present. In this case, buyers are buying the price and sellers are also selling the price, so now the price is constantly moving in a small box without a breakout. Until one of them loses momentum, that is when we will see a breakout. Therefore, as previously indicated, one must be aware of the market’s stage before making any trading orders. As a result of the price movement, traders will find it easier to decide whether to buy, sell, or stay out of the markets.
This is support and resistance
Support and Resistance The price action needs to determine whether to purchase or sell after determining what stage the stock or market is in. Long positions can be started if the market is moving forward; short positions can be started if the market is declining. Following this choice, one must examine the support and resistance levels, or the potential pressure zones for buying or selling. A zone of possible purchasing pressure known as “support” is available for buyers to enter the final phase. Therefore, as previously indicated, one must be aware of the market’s stage before making any trading orders. As a result of the price movement, traders will find it easier to decide whether to buy, sell, or stay out of the markets. 2. Get my eBook to learn more about entry levels, stop losses, how to trade using higher time frames (HTF), and how to place a take profit (TP). Forex Secret For Beginners