Action Forex – Trading Forex with Price Action
ActionForex.com (Action Forex) was established in 2004 to provide insightful analysis to forex traders who have served the trading community for over a decade.
What is Action Forex Price?
Action Forex Price describes the characteristics of a security’s price movements. This movement is very often analyzed in relation to price developments in the recent past. Action Forex Price is a trading technique that allows traders to read the market and make subjective trading decisions based on actual, current price movements rather than relying solely on technical indicators.
- Since it ignores fundamental analysis factors and focuses more on recent and past price movements, the price action trading strategy relies on technical analysis tools.
- Many day traders focus on price action trading strategies to generate quick profits in a short period of time.
- For example, they may look for a break of the session high, go long, and use strict money management strategies to generate profits.
- Various software tools and platforms can be used to trade Action Forex Price.
- It is the “action” of the “price.” It describes how a market moves, including its trends and critical support.
- However, trading Action Forex Price also includes buy and sell signals.
- When we combine these signals with critical levels and momentum, we get a simple and effective trading style.
- It is the only method I have used to trade the Forex market since 2010. Before that, I was lost in a world of unprofitable trading robots and useless indicators.
- While some of you may already be familiar with the content of this article, for others, it will offer a whole new perspective.
3-Step Process for Action Forex Price
Step 1 – Draw Support and Resistance Levels
- After opening a new chart, the first thing to do is draw direct support and resistance levels.
- These can include trend lines, horizontal areas, and even patterns like ascending and descending channels.
- There is a whole lesson on how to draw critical levels. Check it out before attempting to trade the price action discussed in this article.
- Once you identify the significant areas on your chart, it becomes a waiting game and easy.
Step 2: You Wait for the daily session to end
Patience is key here. It is no coincidence that this is also where most Forex traders go wrong.
It would be useful to wait until the end of the session to trade the daily time frame.
What session am I referring to?
I am exchanging letters near New York. This means that each 24-hour period ends at 5:00 p.m.
Not all Forex brokers offer this type of chart. However, if you are serious about trading Forex price action, using the New York closing charts is compulsory.
Step 3: Watch for price action with buy and sell signals
- Do you want to know my two favorite price action signals?
- When it comes to candle designs, the pin bar is my favorite, and the wraparound design is right behind.
- Here, the pin bar is a candlestick with a long upper and lower wick, called a tail. This is what makes this model so profitable.
- When buyers push the market back above critical support, it suggests increased demand.
Using Action Forex Price to Assess the Momentum
I often see traders discussing various momentum indicators. These people are waiting for a way to spot trends and reversal.
Well guess what?
You do not need a notice to do this. A simple price action is all it takes.
These momentum indicators give off a lot of false positives. In other words, they will indicate that a market is changing direction when it does not intend to.
This is where you can use ActionForex price to gauge momentum. And like everything we’ve discussed so far, it’s simple.
ActionForex price does not give false positives – Further, No trading style, method, or strategy is 100% accurate.
I found it to be the reliable way to analyze momentum.
Here is how I proceed:
Using the daily calendar, identify swing highs and lows.
Looking for turns in the market. The period between these points can vary from a few weeks to a few months.
Do this exercise for about six months.
Here, you will begin to see a pattern. As long as the market makes higher and lower lows, it is an uptrend.
These swinging highs and lows often form a trend line. When they do, spotting trend reversals becomes almost effortless.
By using this technique, you let the price action do the talking. There is no need for fancy momentum indicators or the like.
- By listening, I am referring to how you interpret the behavior of the market.
- The trading price action is reacting effectively to what is happening on the charts. You never want to outsmart the market by guess what might happen in future.
- You have no business advantage if you do this.
- It is much better to adopt a defensive and reactionary position. While waiting for the market to make the first move by itself, you can also react confidently.
- You will have evidence justifying the action or, in many cases, a side seat.
- One of the biggest obstacles when listening to the market is the lack of patience. Most traders want to trade price action on their charts no matter what they are told.
- Bad habits like this come from the desire for action. Many traders, whether experienced or new to trading, find that doing nothing makes them feel powerless.
- Don’t mistake inaction for a missed chance.
- Those who struggle spend their time in and out of the market.
- Profitable traders also spend most of their time doing nothing.
Action Forex Price has been around for hundreds of years. There is nothing new about this.
It’s not for everyone, and you need to find a style that works for you. But it is the place to be if you are tired of struggling with messy indicators and want a simple yet effective approach to the markets.
Forex trading with price action allows you to see supply and demand like no other trading style offer. You can see where the buy and sell orders are without clutter your charts with avoidable indicators.
The best way to use Action Forex Price comes from the daily time frame. It offers a unique perspective that shorter time frames cannot, especially if you are using the New York closing charts.
Remember that a Action Forex Price signal such as a pin bar is reliable if it forms at a critical level. This is why it is so significant to establish support and resistance levels before looking for signals.
Patience is the key to making Action Forex Price work for you. Always remember that the quality of your adjustments is much more important than the frequency.
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