Price Action: Learn The Right Way To Trade
It certainly seems to me that every time a new trader wants to learn more about trading forex, they will concentrate solely on using indicators, such as stochastics, MACD, moving averages among the other generic indicators that most traders use.
What they do next is cover their charts with as many of these lagging indicators that they can find. Believe it or not, trading price action is something that doesnt even come to their mind. A lot of this has to do with the fact that there are many traders who cant decipher what the market is telling them without having to look at these generic indicators. They have no way of knowing which way the market is headed.
The thing is when you are trading with indicators, its a lot like trading with other peoples signals. You are only hoping that the information they are giving you is right. The reason for this is because you dont actually understand the REAl reason why you are taking the trades that you are taking. All you hope is that the indicators formula is accurate.
But the whole idea of trading forex by just using price action is that you get to eliminate all the clutter that is on your screen. By doing this, you get a clean and unbiased look at how the market actually moves.
One of the biggest obstacles for traders who are using indicators is the fact that on many occasions indicators will give you two opposite signals. For example, moving averages can be telling you to buy, while MACD is telling you to sell. So you are really just sitting there and waiting for these indicators to align, in order for you to take a trade.
So, essentially you are being held hostage by your indicators. This is one of the consequences of not learning price action. Instead of being in the dark, you know exactly which way the market is headed.
You can understand that this can certainly be an awkward position for a trader. After all, you are sitting there waiting for some random lines to match to take a trade, which you dont really comprehend, what these lines even mean.
The next time you catch yourself doing this, I want you to think about the New York Stock Exhange Floor, and think about all the floor traders out there who make a lot of money trading by not even using trading charts, much less using indicators. - 23222
What they do next is cover their charts with as many of these lagging indicators that they can find. Believe it or not, trading price action is something that doesnt even come to their mind. A lot of this has to do with the fact that there are many traders who cant decipher what the market is telling them without having to look at these generic indicators. They have no way of knowing which way the market is headed.
The thing is when you are trading with indicators, its a lot like trading with other peoples signals. You are only hoping that the information they are giving you is right. The reason for this is because you dont actually understand the REAl reason why you are taking the trades that you are taking. All you hope is that the indicators formula is accurate.
But the whole idea of trading forex by just using price action is that you get to eliminate all the clutter that is on your screen. By doing this, you get a clean and unbiased look at how the market actually moves.
One of the biggest obstacles for traders who are using indicators is the fact that on many occasions indicators will give you two opposite signals. For example, moving averages can be telling you to buy, while MACD is telling you to sell. So you are really just sitting there and waiting for these indicators to align, in order for you to take a trade.
So, essentially you are being held hostage by your indicators. This is one of the consequences of not learning price action. Instead of being in the dark, you know exactly which way the market is headed.
You can understand that this can certainly be an awkward position for a trader. After all, you are sitting there waiting for some random lines to match to take a trade, which you dont really comprehend, what these lines even mean.
The next time you catch yourself doing this, I want you to think about the New York Stock Exhange Floor, and think about all the floor traders out there who make a lot of money trading by not even using trading charts, much less using indicators. - 23222
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To learn more about price action trading, make sure to check out forex millionaires.
posted by X - Men @ 5:21 AM
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