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#1 04-10-2021 11:35:21

johnedward
Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 3176
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3 facts about price action trading you need to know

3 facts about price action trading you need to know


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Market conditions change over time, prices are dynamic and constantly changing, and no trading day is ever exactly the same as the last. Volatility fluctuates and at times the market can appear calm for a long time, before seeing renewed activity soon after.

When the market becomes calm for a while, many traders wonder if something is "wrong with the price action". The point is, there is never anything "bad" about price action, it's all on their minds because they've taken losing trades or they're overtrading or they simply haven't adapted to the changing dynamics and volatility of the market.

When you are faced with a series of losing trades, it is only natural to start questioning not only what you are doing but also the method you are using and start pointing fingers. Although this is a "normal reaction", it is not healthy and is not conducive to successful trading. If you don't have the ability to stay optimistic in the face of adversity the market throws at you every week, you will not be successful as a trader.

If you keep the following the below three truths about price action and trading in mind, you will have a much easier time staying optimistic every day as you trade, no matter what the market throws at you:

1. Price action is not a "system"

I think one thing that many newbie price action traders are confused about is that price action is not a trading "system". When traders finally go into the "price action camp" they are most likely coming from a trading system that was much more rigid than price action. Indicator-based systems and trading software are much less flexible and discretionary than price action. It can therefore be difficult for a novice trader to get used to the new "freedom" that comes with a price action strategy.

We're not teaching a system here, so you can't blindly follow every price action signal you see on the charts. You need to use your judgment to filter and select the right entry signals by week or month, depending on market conditions.

Discretion and intuition are notions that you won't find many other trading sites talking about, as they aren't exactly easy to teach or define. But any professional trader will tell you that successful trading depends heavily on intuition and discretion, and these are things that can only really be learned through proper training, time spent in front of your screen and experience.

2. Price action is universal. It has always worked and always will.

Traders often wonder whether or not the price action will "stop working" or "something's wrong with it lately". Price action trading began in the 1800s by Munehisha Homa, the largest price action trader in history, and was the first true form of speculation in the market. It has worked since then and still works today, and it will always work.

However, just because I say "price action works" doesn't mean every trade will be a winner. Indeed, even some very successful traders may lose half of their trades or even more, but with proper risk-reward scenarios and a refined sense of when to trade and not to trade, they can still earn a lot of money.

The bottom line is that price action has always worked and will always work because it is the most natural way to trade. We just learn to read what the price is telling us and look for highly probable "clues" as to what it might do next. Price volatility fluctuates over time, but we tend to see the same patterns and movements repeat over time in the market. This means that we can learn to identify and interpret these chart patterns and movements by learning price action trading, and profit from them if we control our losses.

3. Price action is not limited to "candlesticks"

Many newbie price action traders get carried away by reading individual candlesticks and candlestick patterns and do not pay enough attention to simply reading the chart from left to right. Price action is more than "candlesticks", you must learn to "feel" the collective emotions of market participants.

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