Strategies and Methods 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)
