Price action is one of the simplest ways there is to trade the forex markets, and it can also be one of the most enjoyable ways to trade. You will no longer need to spend hour upon hour looking at indicator covered charts till your eyes hurt.
Price action involves analysing what price is doing. You see price is what the traders are moving, it is also the most up to date information about the market we can get. If the price is 100 at the moment then that’s what it is!
By looking at how price is moving and acting, we can learn to spot opportunities to place high probability trades. This is the name of the game, we’re looking for forex trade setups where all the boxes are ticked. Price action setups where everything aligns can be very high probability trades.
Price action can show us what the traders are up to and what they believe about support or resistance by the effect they have on price. If we see a lot of tailing action on the candles at a support of resistance level it can indicate that the big players are buying and selling off this level and there is a good chance that price will reverse.
My favourite price action setup is a pin bar, pin bars are really solid forex setups. They are also called hammer bars or shooting stars. Basically they are a long tailed candle which shows rejection of higher or lower prices. When we see lower prices being rejected for example, especially at strong support we can assume that price could go up, and we can trade accordingly so long as all the components of the chart align.
Since learning about price action I have become profitable, back in the day I used to try and day trade with about 10 lagging indicators on my charts. These days things are far more relaxed, I only spend an hour or so trading and looking for setups. I can almost instantly say if I have a trade or not, and if its not obvious I don’t trade- simple.
If you are looking for a strategy to get your forex trading career back on track then I strongly recommend price action. I’m almost sure you will find it useful.
Now there are plenty of resources on the internet about price action, and a book I will also recommend is “Martin Pring on Price Patterns”, this book will give you a solid foundation in price action analysis. You can also see my website and blog which is basically a journal of my trading career and you can learn what I know for free!