Pure Price Action in Forex Trading

If your goal is to consistently make profits in forex trading, you need to have a trading plan which allows you to grab market opportunities by the horns. Forex market has a dynamic and a volatile atmosphere and understanding the price movement is crucial for successful trading.

Pure price action trading is one of the preferred strategies among novice traders. Let's take a look at this simple way to make few pips without much fuzz.

Basic Things to Learn

First things first, if you are a true beginner in forex trading, no matter how much you don't want to, you have to learn some basic trading. That includes:

1. Wave Patterns

You need to have a grasp of how the price moves in the real chat, for example, Elliot Waves.

2. Candle Stick Patterns

A basic understanding of the candle sticks is a must. They are visually more attractive than standard bar and line charts and they make for a clearer market reading.

3. Support and Resistance Levels

Support and resistance is one of the most widely used concepts in trading, so understanding it is obviously an advantage.

4. Currency Correlation

Currencies are traded in pairs; therefore there is no currency pair that trades independently of the others. Once you understand the correlations and how one currency effect the other, you can use them in your trading plan.

5. Market Sentiment

This is a trading term used to show whether the larger portion of investors view the market in uptrend (abullish bias) or in downtrend (bearish bias).

Basic Tools to Have

1. Time Frame (both daily and hourly)

2. Candle Stick Indicators

3. Trading hours

4. Stop Loss

5. Holding Period ( no more than 1 day)

6. Take Profit (how many pips per entry)

7. Entry Per Day (maximum two entries)

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