Why Price Action Is So Vital
I’m just going to touch on a forex trading education that nobody else seems to talk about: the concept of price action. It has been around since the first trade was taken in the stock market.
So, it’s kind of surprising that so many people aren’t aware of the profit potential it could bring.
I think the main reason for this is a general lazy attitude that so many traders have towards trading. They would much rather have shortcuts like indicators, such as Stochastics make their trading decisions for them.
Nowadays, you can find your own special indicators, mechanical trading systems, trading robots, etc… anywhere online. Just pick any forex forum.
I suppose that all these gimmicks are popular, and this could be the reason why so many traders don’t understand price action. But here are just some of the things that they are missing by not learning this invaluable tool:
Price Action Patterns: You would be absolutely stunned by the staggering amount of information that you can see when you look at a basic price chart. When you do, you will notice that there patterns within the price movement that will give you all the information you will ever need to trade successfully.
The Trend: Ah…yes the trend. It’s a word you hear a lot about but most traders wouldn’t be able to spot it, if you gave them a road map. I’ll give you a clue. It has nothing to do with moving averages. As pretty as they might look on your charts, they won’t tell you where the trend is headed.
Support and Resistance Areas: I can’t help but laugh when I see those Metatrader indicators that supposedly give traders the support and resistance lines. These are just basic mathematical formulas. Real Support and resistance has nothing to do with math. It can be seen in plain sight without any kind of formula.
