Concept of Price Action
Price action can vary depending on the interpretation. Understanding price action enables a trader to minimize questionable entries and improve exits. Price action is the footprint of the money.
The Amazing Concept of Price Action and Trading Without Indicators
By John Templeton
I know something like the concept price action and trading without indicators gets lost in the current trading world that we live in now. When the trading community goes insane over the latest flavor of the day. In a trading world that has all these brand new indicators, trading robots, state of the art trading software, etc… we are definitely in a time of style over substance.
Photo: tradingpriceaction.com
The idea of just looking at a naked chart (no indicators) probably doesn’t appeal to a whole lot of people. They are probably saying "what am I supposed to be able to see looking at that?" And my answer would be everything.
Without all the filler and the other b.s. that goes on a trading chart nowadays, you get to see the market in its most real form. With price action you get to see:
The Trend - You always hear about people saying trade with the trend. Well, frankly I don’t know any other way to spot the trend without looking at price action. I can assure you that moving averages don’t cut it.
Support and Resistance Areas - Once you know what to look for, its so obvious to spot. A basic bar chart is like an x-ray of the market. It tells you exactly how traders are reacting to the price movement, and within the reaction, it is clear that there are spots in the market that traders are waiting for.
The Future Price - It all boils down to the fact that all markets have price action patterns that are repeated over and over, which can be used to forecast and predict future price movement. It goes back to the old adage "those who fail history are doomed to repeat it"
John Templeton has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex was on a plain chart with no indicators, his profits soared.
