Price Action: Learn The Right Way To Trade
It certainly seems to me that every time a new trader wants to learn more about trading forex, they will concentrate solely on using indicators, such as stochastics, MACD, moving averages among the other generic indicators that most traders use.
What eventually happens is that is all you see on their trading charts: indicators. It really never dawns on them that they are not trading correctly. Sadly, trading with price action never comes to their mind. Many traders get scared when they hear the concept, and think only smart people can trade it. They would prefer just using their indicators to tell them which way the market is headed. However, they really dont know which way the market is moving.
What most people dont realize is the fact that when you trade with indicators, you are essentially trading other peoples signals. All you are doing is hoping that they are giving you correct information, because YOU truly dont have any idea of why you are taking a trade. You are essentially going on blind faith.
But the real beauty of trading forex with price action is that once and for all, you are able to eliminate these useless tools, and you are able to see the market the way it was initially intended: without the need for indicators.
One of the biggest obstacles for traders who are using indicators is the fact that on many occasions indicators will give you two opposite signals. For example, moving averages can be telling you to buy, while MACD is telling you to sell. So you are really just sitting there and waiting for these indicators to align, in order for you to take a trade.
Since many traders dont really understand the concept of price action, what happens is that they are left just sitting there waiting for their indicators to line up in the same direction.
You can understand that this can certainly be an awkward position for a trader. After all, you are sitting there waiting for some random lines to match to take a trade, which you dont really comprehend, what these lines even mean.
The next time you catch yourself doing this, I want you to think about the New York Stock Exhange Floor, and think about all the floor traders out there who make a lot of money trading by not even using trading charts, much less using indicators. - 23226
What eventually happens is that is all you see on their trading charts: indicators. It really never dawns on them that they are not trading correctly. Sadly, trading with price action never comes to their mind. Many traders get scared when they hear the concept, and think only smart people can trade it. They would prefer just using their indicators to tell them which way the market is headed. However, they really dont know which way the market is moving.
What most people dont realize is the fact that when you trade with indicators, you are essentially trading other peoples signals. All you are doing is hoping that they are giving you correct information, because YOU truly dont have any idea of why you are taking a trade. You are essentially going on blind faith.
But the real beauty of trading forex with price action is that once and for all, you are able to eliminate these useless tools, and you are able to see the market the way it was initially intended: without the need for indicators.
One of the biggest obstacles for traders who are using indicators is the fact that on many occasions indicators will give you two opposite signals. For example, moving averages can be telling you to buy, while MACD is telling you to sell. So you are really just sitting there and waiting for these indicators to align, in order for you to take a trade.
Since many traders dont really understand the concept of price action, what happens is that they are left just sitting there waiting for their indicators to line up in the same direction.
You can understand that this can certainly be an awkward position for a trader. After all, you are sitting there waiting for some random lines to match to take a trade, which you dont really comprehend, what these lines even mean.
The next time you catch yourself doing this, I want you to think about the New York Stock Exhange Floor, and think about all the floor traders out there who make a lot of money trading by not even using trading charts, much less using indicators. - 23226
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To learn more about trading price action, make sure to check out forex millionaires.
posted by X - Men @ 2:24 AM
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