The way you make decisions when acting on the financial markets defines your trading strategy. If you prefer price charts as the dominating force to analyze trends and prices instead of exploring the fundamentals, you are probably an indicator trader, who uses seasonality, order flow, and other niche-oriented strategies that include price action trade as well.
Price action trading is one of the simplest forms beginners might want to learn right from the start. Besides, it has proved to be one of the most effective techniques. If you only make your first steps in the financial market, learn what price action trading is and why it can be a good starting point.
Explaining the Price Action Strategy
The price action trade is simple to understand. It depicts the price of an instrument plotted over a specific timeframe. What's more, this technique comes as a technical analysis basis when trading commodities, stocks, and other instruments.
The key price action trading features you need to consider include:
- The strategy shows the up and down security price movement over a specific timeframe.
- Different traders may read charts in different ways depending on the strategy. A different overview makes it possible to make trends that are more obvious in price action trading.
- Different technical analysis tools are calculated from the price action, which makes the strategy the basis for its formations and different chart patterns.
What's more, traders can project price action trading in the future to ensure better decision-making. The best thing is that you can test this strategy risk-free on MTrading demo account right now. Installation of MT4 is totally free and $5000 on demo balance allow trying any strategy without risking money.