Going back to basics with Price Action
In the past couple of months, we’ve all seen the emergence of various news events proceeding to cause a flurry of seismic shifts in the market. As a result, millions of trading systems are put to the test. I say this because mostly all trading systems out there rely heavily on trends and volatility. Even my own DeepSpaceFX Daily Chart strategy relies heavily on clear trending markets. Particularly, those that are built around various indicators, signals and automated EA’s. Without a clear trend in place, traders are bound to receive false signals based on whipsaws in the market if relying on said systems. However, naked chart price action has been proven to be the most efficient and resilient way to trade the markets no matter what the conditions.
Why Price Action feels like “a breath of fresh air” when Trading Forex
Don’t get me wrong, Price action trading is not the end all be all strategy. There are many strategies out there including at least a few indicators that are highly effective and successful. But there are also a lot of indicators out there that have been put in place to deceive and manipulate traders into trading a lagging market. It’s usually the novices who lack the capacity of experience to decipher the good indicators from the bad. Sometimes, as a trader it helps to take three steps back, go backwards beyond ego and go back to basics. Basics meaning Price Action.
“Essentially, trading Forex is like going to war. You either go into battle well prepared, with armor and weapons and ammunition to use against your enemy at your disposal, or you go into battle helpless and defenseless.”
But the real question is, If you’re going to war, would you buy your armor and weapons FROM your enemy? The easy and short answer is NO, you shouldn’t. You build your OWN armor and weapons, obtain your OWN ammunition and wage war against your enemy. In the Forex wars, most of us have failed to grasp this simple concept. Allow me to explain.
Imagine trying to trade the chart I posted above, intraday, day in and day out. Which indicators would you use to signal your entry and exit? Which indicator determines the trend bias? In what order would you base the indicators as per your trade entry rules? Now imagine how intimidated a novice trader would feel trying to learn these various indicators to help aid them in their trade decisions. It’s no surprise why 90% or 95% of traders lose money The very terminals and indicators we use and the apparatuses furnished with them are given to us by the Market Makers themselves. They situate on the opposite side of the glass and they all see what we do. They know our propensities and the armor and weapons that they are equipped with is much more superior to us in this Forex War. They know all of the traps in the book. They know every one of the instruments we use and they utilize those apparatuses against us!
How often have you seen a support/resistance line or Moving Average being broken, with a trade request, only to see the trade turn around and head the opposite direction?Frustrating right? The Market Maker knows where each trade is being placed because they have access to the overall market flow.
The Relief of a Clean, Naked Price Action Chart
1HR Chart (Last chart for plotting S & R Zones.)
15min. Chart For Entries/Exits
Breaking down the current market for your desired pair using an unadulterated, naked chart without extravagant indicators is an art-form in itself. The standout among the best methods is to dependably consider this while applying your Price Action trading style. To trade Price Action adequately, you would need to think about what is known as Market Circle or Market Wheel. This is something that drives value, utilizing different examples. But I’ll save that for an entirely different blog post.
It is significant that you get acquainted with Forex Market Order Flow, Candlestick Patterns, Levels, Stop chase, Area of Interest, Accumulation phase, Breakouts, False Breakouts, Stop-hunts, Whipsaws, Price zone, e.t.c I could go on and on and on….
Go along with me and learn how to exchange the market emphatically here on the DeepSpaceFX blog. Thank you for reading!
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