All About Price Action

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Dear friends/Brothers/Sisters,

I want to start this post regarding Price Action. I want people to help about what I know. Please Respond this post, Share the way you know and learn the way I know. I am not a master but a trader like others and also like to know how others doing. Reply and Keep in touch with this post. :)

 

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Indicators: Price Action Indicator

newdigital, 2014.06.13 15:52

Indicators VS Forex Price Action (based on article)

There is an endless debate within the forex trading community whether investors are better suited to use price action mechanisms or technical indicators when developing their portfolio strategies. The reality is that both sets of strategies have advantages and disadvantages, but the benefits gained from them are based heavily on the timeframe. Let us take a look at some important factors to keep in mind when determining which strategy to use.

What is price action?

The most basic definition of price action is a strategy that involves an investor taking all forex trading decisions based solely on the movement of a currency’s price. A price action strategy does not take into account any technical indicators that may be typically used to determine whether a currency is supporting or resisting a particular trend. Regardless of the various complicated strategies that investors around the world may use, their actions are all accounted for in the final price chart. The need to predict the impact of external global events on the market is eliminated because the price chart will inevitably come to reflect the impact on its own.

The entire focus in price action trading is the current movements taking place on a price chart. There are a number of tools that price action traders use, with one notable example being that of candlesticks. Candlesticks are tools that are used to determine whether a currency is truly on an upward or downward trend. The only information taken into account is that which is provided on a currency’s price chart.

What are technical indicators?

Forex trading using technical indicators goes above and beyond the information presented on a currency’s price chart. While price action trading involves using only price data, technical indicators are used to discover why a particular currency is moving in a certain direction to predict its future behavior. Nowadays, there are a number of technical indicators available for use in the market. However, most forex traders using technical analysis incorporate three main indicators – moving averages, bolinger bands and average directional indexes.

A moving average line is one of the most common indicators that helps forex traders determine whether a currency is exhibiting a bearish or bullish trend, or if there is no trend at all. Moving averages can also help investors identify whether a currency is resisting or supporting price movements. Moving averages are usually created by determining a particular period of time, and calculating the average price within that period.

Bolinger bands are bands that are typically located around a moving average and a currency price. They help investors determine whether a currency is trending, while also suggesting points at which this trend may begin reversing. They help in identifying support or resistance patterns, and in calculating the volatility of a currency.

Average directional indexes are used in tandem with Bolinger bands and moving averages. An ADX essentially calculates the strength of a trend through measurement of gradient. From these calculations, an investor will be able to determine whether a trend is strong or weak.

Which one works?

Financial theorists who develop technical indicators and publish them within the market do so by studying market behavior in the past. As such, they are using previous data and creating measurements that fall in line with this data. When these measurements hold, they can be used by investors to predict the price movement of a currency.

Price action traders, however, live in the present. They react to how a currency is doing presently, and trends that are easily visible on a price chart. When price action traders look at a price chart, they do not need to understand the interplay between demand and supply, but only the final outcome as reflected in a price movement.

The two types of strategies both have their own uses. Technical indicators are shown to have an extremely low probability of success when the timeframe is short. The opposite holds for price action trading. However, as the timeframe of analysis increases, the probability of technical indicators working begins to rise. Investors who are looking for long-term trading strategies may be best placed to use technical indicators over price action. Conversely, investors who prefer to make quick trades within the short term are better suited to a price action trading strategy.


 

Forum on trading, automated trading systems and testing trading strategies

Something Interesting in Financial Video March 2014

newdigital, 2014.03.17 09:55

What is Price Action?

"A common beginner question to trading is what exactly is Price Action? Well, good question, let me sum it up for you."






 

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Something Interesting to Read February 2014

newdigital, 2014.02.04 15:21

Trading Price Action Reversals : Al Brooks




detailed guide to profiting from trend reversals using the technical analysis of price action

The key to being a successful trader is finding a system that works and sticking with it. Author Al Brooks has done just that. By simplifying his trading system and trading only 5-minute price charts he's found a way to capture profits regardless of market direction or economic climate. His first book, Reading Price Charts Bar by Bar, offered an informative examination of his system, but it didn't allow him to get into the real nuts and bolts of the approach. Now, with this new series of books, Brooks takes you step by step through the entire process.

By breaking down his trading system into its simplest pieces: institutional piggybacking or trend trading, trading ranges, and transitions or reversals (the focus of this book), this three book series offers access to Brooks' successful methodology. Trading Price Action Reversals reveals the various types of reversals found in today's markets and then takes the time to discuss the specific characteristics of these reversals, so that you can use them in your everyday trading endeavors. While price action analysis works on all time frames, there are different techniques that you can use in trading intraday, daily, weekly and monthly charts. This, among many other issues, is also addressed throughout these pages.

  • Offers insights on how to handle volatility and sharp reversals
  • Covers the concept of using options when trading certain charts
  • Examines how to deal with the emotions that come along with trading

Other books in the series include Trading Price Action Trends and Trading Price Action Trading Ranges

If you're looking to make the most of your time in today's markets the trading insights found in Trading Price Action Reversals will help you achieve this goal.

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Forum on trading, automated trading systems and testing trading strategies

Something Interesting to Read February 2014

newdigital, 2014.02.10 16:20

Trading Price Action Trading Ranges : Al Brooks



Divided into five comprehensive parts, Trading Price Action Trading Ranges skillfully addresses how to spot and profit from trading ranges—which most markets are in, most of the time—using the technical analysis of price action. Along the way, it touches on some of the most essential aspects of this approach, including:

  • Trading breakouts, which are transitions from trading ranges to trends, and understanding the gaps they create
  • The two types of "Magnets," Support and Resistance, and what they mean once the market breaks out and begins its move
  • Pullbacks, which are transitions from trends to trading ranges
  • The characteristics commonly found in trading ranges—areas of largely sideways price activity—and examples of how to trade them
  • Honing your order and trade management skills so that you can make more informed entry and exit decisions

And much more

Throughout the book, Brooks focuses primarily on 5 minute candle charts—all of which are created with TradeStation—to illustrate basic principles, but also discusses daily and weekly charts. And since he trades more than just E-mini S&P 500 futures, Brooks also details how price action can be used as the basis for trading stocks, forex, Treasury Note futures, and options. For your convenience, a companion website, which can be found atwiley.com/go/tradingtrends, contains all of the charts provided in the book.

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Check the other book from this series : Trading Price Action Reversals : Al Brooks


 

Good article - 

Reversing: The holy grail or a dangerous delusion?  

Reversing: The holy grail or a dangerous delusion?

Table of contentsReversing is a type of martingale. Such systems suggest lot doubling after a losing trade, so that profit could cover previous trade's losses in case of success.
 

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Press review

Sergey Golubev, 2019.08.24 08:47

Using Price Action As Your First Indicator (based on the article)


  • Price action is the study or analysis of price movement in the market. Traders use price action to form opinions and base decisions on trends, key price levels and suitable risk management. Trend identification is frequently utilized as the initial step in price action trading. All other facets to price action indicators require a trend basis to begin price action analysis.
  • Technical analysis setups generally begin with price action as the initial form of evaluation. The first thing to remember when using an indicator is that it is a function of price action. The indicator itself is not the ultimate tool when it comes to trading, but rather comes in behind price action. Price action governs the information that the indicator will ultimately provide on the chart. As such, a trader must determine what price action is doing (i.e. the trend) before consulting the indicator for an entry signal. Once the trend is determined, the trader can then consult the indicator for an entry signal in the direction of the trend.Traders trade on the price movement of an instrument therefore, the focus is on the change in price as opposed to the change in indicator value. Some traders base trading decisions and analysis purely on price action whilst other prefer a combination of price action and technical indicators which serve as a support system.
  • Technical indicators are derivatives of price action - price action governs the information that indicators provide on the chart. These indicators are calculated using varying periodic price data which provide substantiation for entry, exit, and stop distance criteria. Trend identification is also important in market analysis to ascertain how the market is functioning on a holistic scale (time frame dependent).
  • Price action is a broad technical analysis technique that incorporates various trading strategies which traders apply to analyze the markets. Technical indicators work well in conjunction with price action to allow traders to formulate more accurate trade decisions.

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video :

 

XXXUSD 10 points - expert for MetaTrader 5

XXXUSD 10 points - expert for MetaTrader 5

The adviser expects a breakdown of yesterday's price by 10 points. There can only be one 'market entry' transaction on the bar (this is an internal parameter, it is not put out to the input parameters and this is not related to the ' Only one positions ' parameter). When working in the 'inside signals ' mode (' Search signals, in seconds ' is greater than or equal to '10'), the current bar is bar # 0, when operating in the 'only at the time of birth of a new bar' (' Search signals, in seconds ' less than '10') current bar - bar # 1.

I entered the following settings in the settings of the adviser:

  • type of yesterday's price - type of yesterday's price, maybe ' High and Low ' and ' Open and Close '
  • type of yesterday's bar - type of yesterday's bar, maybe ' Bullish ', ' Bearish ' or ' Disable '
  • breaking through - breaking
 
Sergey Golubev #:

XXXUSD 10 points - expert for MetaTrader 5



Sharing is very good. I am interested in price action and I want to improve myself. Please keep sharing.
 

The price movement model and its main provisions (Part 1): The simplest model version and its applications 

The simplest model version and its applications

Up to the present, we have not had any mathematically rigorous price movement theory. Instead, we have had to deal with experience-based assumptions stating that the price moves in a certain way after a certain pattern. Of course, these assumptions have been supported neither by statistics, nor by theory. The article provides the concepts and foundations of the mathematical apparatus of the rigorous theory price movement theory.

  

The price movement model and its main provisions (Part 1): The simplest model version and its applications
The price movement model and its main provisions (Part 1): The simplest model version and its applications
  • www.mql5.com
The article provides the foundations of a mathematically rigorous price movement and market functioning theory. Up to the present, we have not had any mathematically rigorous price movement theory. Instead, we have had to deal with experience-based assumptions stating that the price moves in a certain way after a certain pattern. Of course, these assumptions have been supported neither by statistics, nor by theory.
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