Weekly Price Action Trade Ideas – 8th to 13th Dec 2019 (2024)

FAQs

What is the best indicator to use with price action? ›

The most commonly used price action indicator is the study of price bars or candlesticks which give details such as the open and closing price of a market and its high and low price levels during a specific time period. Analysing this information is the core of price action trading.

Does price action trading really work? Price action trading can work; however the trader must understand that it requires a high degree of patience to successfully trade the markets using price action.

Price action traders can follow the sequence of highs and lows strategy to map out emerging trends in their market. For example, if a price is trading at higher highs and higher lows, this indicates that it's on an upward trend. If it's trading at lower highs and lows, it's trending downwards.

The Smart Money Concept (SMC) is a trading strategy focused on understanding and leveraging the market movements initiated by institutional investors, such as banks and hedge funds. It posits that by identifying the trading behaviours of these major players, retail traders can make more informed decisions.

Key Takeaways

Different looks can be applied to a chart to make trends in price action more obvious for traders. This is especially true when analyzing data covering different time periods. Technical analysis formations and chart patterns are derived from price action.

One of the simplest and most effective trading strategies in the world, is simply trading price action signals from horizontal levels on a price chart.

To master price action trading, you must learn a lot about how the market works and how to read and understand price charts. This is usually done by looking at how the market has moved in the past and finding patterns and trends that can be used to predict how prices will move in the future.

Boom and crash can also be traded using price action, but you will need the help of tools to help catch the spikes. When expanding markets are buying, buy long bullish highs while crisis markets sell long bearish highs.

What is the rule of price action trading? ›

Price Action Trading (P.A.T.) is the discipline of making all of your trading decisions from a stripped down or “naked” price chart. This means no lagging indicators outside of maybe a couple moving averages to help identify dynamic support and resistance areas and trend.

The most suitable timeframe for SMC trading strategy might vary due to several factors, but the general opinion from several SMC traders is that “The SMC trading strategy works better when employing a longer time frame (4 hours) for technical analysis and a shorter time frame (15 minutes) to get your entry points, this ...

In simple terms, price action trading is a technique that allows a trader to read the market and make subjective trading decisions based on recent and actual price movements, rather than relying solely on technical indicators.

Bullish price action is an indicator giving positive signals that a security's price is due for future increases. For exactly, one bullish trend is often defined by "higher highs" and "higher lows" forming an ascending triangle pattern.

Price action indicators illustrate trading activities on a chart which helps any trader understand the emergence of a trend. Even amateur traders can quickly analyse price action indicators to use them for investment decisions.

Stochastics are a favored technical indicator because they are easy to understand and have a relatively high degree of accuracy. It falls into the class of technical indicators known as oscillators. The indicator provides buy and sell signals for traders to enter or exit positions based on momentum.