Hi
I have trawled the web and this site but cannot get to grips with what this actually means.
From what I have discovered so far it means trading without indicators using past support/resistance levels.(I thought a chart was an indicator in it self)
Am I missing something, or is it one of those things that means something different to everyone?
Your thoughts please.
Daren
Price action means you trade free of any indicators and focus on chart patterns and candlestick formations. It is often referred to as naked trading. I have met price action traders who did not even trade with a chart in the most pure form of price action trading.
+1 to what TLB said.
Price action is using previous candlestick formations / patterns and horizontal levels to try and predict future movements in price.
I understand candlestick formations and horizontal levels but not sure how to put that together into making a trading plan without indicators, Is there something you have come across I can read/watch that will help me.
Many Thanks D
What specifically do you not understand- if you’re more specific we can try to help.
Price will trade in between two levels- support and resistance.
You wait for candlestick patterns to form around those zones and then trade in the direction of the pattern.
Jake
I like when everyone says no indicators then show you candle sticks Support lines and Resistance lines. I agree LTB opinion. Having said that in my opinion is the reason it can be confusing is because there is no right or wrong answer, except possibly the trader who uses no charts. No charts would be the most pure example of price action trading. Price action is simply price movement, from price movement comes your candlesticks, price bars, lines, tick, trend lines etc.
If you want to find out how to put price action into a particular strategy, go and utube and type in “Price Action Forex”, or Price action Strategies, forex trading with no indicators, etc. you will get tons of video’s demonstrating trading using price action.
Hope that helps
Gp
We could get fancy here, but the general understanding is trading without any “calculated” indicators. Things like oscilators, histograms etc. that take the price values, do some calculations on them and display a different value.
Charts aren’t really indicating anything, they are representing real values, candle patterns and drawn lines is where things get grey.
As to how to trade minus calculated indicators, it is supply, demand and patterns.
Hey Darren,
Price Action is a wide concept. You cannot learn it overnight. But nice to see your interest as it is the key to success in markets.
Please check below article on price Action. Hope will give you an idea
Thank you for the replies but still feel I am no further forward, support and resistance are not always reliable so trading of these levels with candlesticks does not seem very efficient to me.
I have taken all my indicators of my charts and tried to trade without them but what I see as a setup is usually different from what I would trade with my usual indicators.
Alanamc thanks for the link but like most articles written on this subject it tells you should trade price action and what it means but not actually how you trade it.
Have been studying Forex for 3 months and maybe its me that needs more time studying I think at this stage I would happily pay for a course on this subject. I have just started live trading with a small account and will be using my trading plans for this but a large percentage of traders say PA is the way to go and would really like to understand how.
Regards
Daren
Candlestick charts are indicating everything. Indicator - a thing that indicates the state or level of something. Now say my broker operators at GMT, now you broker is in Cyprus or +2GMT. Who’s candles open on a daily or 4 hour chart is right?
Back to the subject, PA to me means what is the price now, what was the price “x” period ago. What is that relationship. Within this relationship you will see repeated patterns and it is these patterns we get our trade signals from.
Persist with PA, but I recommend stop practicing and try opening a micro account. You will learn a lot more live and quicker than on a demo. A $250 micro account traded at 0.01 lots gives you 2500 pips to play with.
Hello Daren,
In it’s simplest definition - ‘price action’ is the movement of price on any instrument or time frame.
The topic of ‘price action’ can seem confusing, because there is no formal consensus as to the best way to ‘understand’ and ‘trade’ price action.
These methods can range from the freshman definition of [I]learning price action candlestick patterns + using them at key levels[/I], to a more developed version of it whereby you learn to [B]understand the strength/weakness of the buyers/sellers[/B], [B]who’s in control[/B], [B]who is not[/B], w[B]here are they buying/selling[/B], where is the [B]underlying momentum[/B], are there [B]transitions[/B], etc.
So just going on an information search will yield different results. The most vanilla methods touted though (learn 3 candlestick patterns, trade them from key levels) tend not to yield any major depth or understanding of price action. Go find me a bank trader who trades like that, and I’ll change my stance on this, but you won’t find any. Food for thought.
[B]RE: Support & Resistance Not Being Reliable[/B]
That would depend upon which levels you are looking at, how you are choosing/analyzing them, in conjunction with the price action.
Sure, some levels may not seem ‘reliable’, but if you learn to read them well, you’ll find many are areas where buying/selling orders are happening in larger clusters. When you learn to spot those, in conjunction with reading the [B]price action context[/B], you’ll likely find them more ‘reliable’.
Now as a general comment, you have been studying for 3 mos, which is a short amount of time. Trading is a [B]skill based endeavor[/B]. You don’t get good at trading by [I]collecting[/I] ‘information’. [B]Trading price action[/B] is also [B]a skill[/B] - meaning you have to learn the underlying basics as a skill, and then build upon that.
With that being said, no skill ([I]i.e. playing an instrument, martial arts, etc.[/I]) is learned in 3 mos, especially price action or trading. If you are looking for a quick fix and easy shortcut, you’ll find a plethora of people touting their 3-simple-patterns-to-success-is-all-you-need-route.
I myself have spent 14 years trading professionally (broker, hedge fund, private fund), and over 40,000+ hours behind the charts. The skill of [B]reading and trading price action[/B] is something I’m always working on, from the basics to the complex. This is no different than a basketball player who still shoots free throws and works on dribbling drills, even though they are a pro.
Now the article shared above by alanamc talks about one of the most core concepts you’ll need to learn in trading price action. But don’t expect to be some profitable trader by reading any one article, or many.
That is only ‘[I]intellectual[/I]’ understanding, which has to shift to [B]direct experience[/B] for it to be useful in terms of trading. You get to this by learning the concepts first, then practicing such methods on demo, [B]live forward simulation training[/B] (like [I]forex tester 2[/I]), and then once you have your [B]execution and risk automatic[/B], you can start then using such methods live.
That is a simple way to begin, but a useful one.
Hope this helps and gives you a new perspective.
Kind Regards,
Chris Capre
Hi Chris, Many thanks for the reply I did notice you were the author of the link provided by Alanamc so please let me take my foot out of my mouth and apologise as did not mean anything derogatory by my comment especially now as you have gone to great lengh to expalin PA to me,however it has given me a fresh perspective and have practiced PA trading over the last 2 days as well as reading and watching video’s.
I have had a small eureka moment when trading my own trading plan with indicators, whilst watching the market looking for an entry point I realised what I am actually doing is predicting when the price will change and using the indicators as confirmation for entry, some of the time I predicted right but by the time my indicators had caught up my profits where usually small with the occassional big win or was stopped out. So using that knowledge I am trying to trade without indicators, I do feel a little blind though.
I totally agree that after only 3 months I can’t expect to be skilled trader, I am in it for the long term Pipschool has given me an education, I have traded demo for 2 months and have just opened a small account with a deposit of £1000 using a 0.4% risk strategy. Which hopefully will enable me over the next 2 years learn how to trade. I am lucky enough to have a part time job that pays the bills and leaves me with plenty of trading/study time.
You wrote “understand the strength/weakness of the buyers/sellers, who’s in control, who is not, where are they buying/selling, where is the underlying momentum, are there transitions” I imagine after I have spent some time practicing PA trading and improving my understanding of support/resistance that is what I need to be learning?
Many Thanks
Daren
Yes Darren, you will feel a bit blind but if you add volume (tick) to your chart you will soon see the relevance of price action based on the volume traded at a particular price relevant to that of other prices. This is called Volume price analysis or Volume spread analysis.
Here are a few videos I did on the subject as one of the pioneers of volume trading on this forum along with GP00 and Pipme.