Price Action Trades ARE the Edge
If you read many Forex trading publications or websites then you see article after article on how to use indicators to predict the action on a market. If you want some real advice though; you will save yourself a lot of trouble if you just forget about them completely. Unfortunately, too many Forex traders get so caught up in indicators that they miss the big picture.
The Only Indicator that Ultimately Matters.
At the end of the trading day there is only indicator that ultimately matters. It is a perfect real world compilation of all the other indicators in real time and is 100% accurate every time. I am sure that statement has many shaking their head as impossible but it is true. The only chart that matters at the end of the day is price chart. It is the result of every known indicator used to predict Forex trading and reflects that with the price without error. Since all of your profit or loss in Forex trading is based on the price chart why is it not the most common chart discussed?
Forests are filled with Trees.
The expression “can’t see the forest because the trees are in the way” applies well to many Forex trading platforms. After spending hours studying over charts an investor comes to a conclusion and makes an investment. This makes sense to a point and I would not discredit this method off hand. Where I lose faith is when the most important indicator (the price chart) is then overlooked by blind faith in other selected indicators in determining how long to hold. Since real profits in the Forex market are determined by extending gains and limiting losses putting more faith in an indicators prediction as opposed to the price chart facts is shortsighted. It is watching the tree and ignoring the forest. This is how huge losses are realized and how big potential gains are cut short.
So Indicators are Useless?
Well, most of them yes, but the right indicators can serve a purpose. For those of us that like to trade Forex you can use indicators that help you see Supply/Demand and Support/Resistance, or Wave Structure. These types of indicators can enhance your price chart and act as kind of ‘training wheels’ to help you see the real price action trades you should be looking for. If you do wish to use any training wheels then just make sure they are from a Price Action specialist AND that you agree with what is being painted for you (ElectroFX.com provides such training wheels). Neglecting Price action strategies once involved in trading is a common mistake.
Price Action Trading Platforms
You can use virtually any trading platform to do price action trades. The keys are responsiveness and speed of completing trades. Since most platforms allow free trial accounts with practice money to invest you can hone your strategy and become familiar with the process used for individual trades. If you are used to trying to use advanced analytics and market indicators try running one with Pure Price Action strategy and another using your short codes and analysis. It is very likely you will find similar wins and losses but using price point trading will result in bigger wins and smaller losses so that will come out ahead in the profit column.