Study Price Action??? | Forex Factory

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Study Price Action???

  • #1
  • First Post: Dec 4, 2008 7:55am Dec 4, 2008 7:55am
I have heard various traders say study price action and you learn the way the currency moves. The question I want to ask is how is it possible to study price action? Which time frames should I watch? Should I just keep a completely naked chart without 'any' indicator?
  • #2
  • Dec 4, 2008 7:58am Dec 4, 2008 7:58am
Have a look here:

http://www.forexfactory.com/showthread.php?t=2331
  • #3
  • Dec 6, 2008 9:41am Dec 6, 2008 9:41am
Quoting bksujal
I have heard various traders say study price action and you learn the way the currency moves. The question I want to ask is how is it possible to study price action? Which time frames should I watch? Should I just keep a completely naked chart without 'any' indicator?
I would start observing daily and weekly charts. Find a good book that explains bar formations such as Pring on Price( http://www.amazon.com/Pring-Price-Pa.../dp/0071440380 ). Understanding the open and close relative to the bars entire price representation will give you an understanding of market psychology for that bar/time. Advanced techniques will include multiple bar setups and include historical price levels/past support and resistance areas. I work with the western bar but many still use the original Japanese candlestick. I tend to trade naked but will use fibs at times. As much as I enjoy working with PA, one must not forget the importance of learning how to exit the market because this will really determine your success.
  • #4
  • Dec 6, 2008 10:01am Dec 6, 2008 10:01am
Check out Chris Lori's methods. He focuses on price a lot. He posts on this site as Houdini. You can google his name and find his web site.
  • #5
  • Dec 7, 2008 6:44am Dec 7, 2008 6:44am
thanks for ur replies guys keep more comments and opinions are appreciated
  • #6
  • Dec 7, 2008 3:58pm Dec 7, 2008 3:58pm
Quoting bksujal
I have heard various traders say study price action and you learn the way the currency moves. The question I want to ask is how is it possible to study price action? Which time frames should I watch? Should I just keep a completely naked chart without 'any' indicator?
1. Practice makes prefect!
2. Any time frame that suits your personality.
3. There is not thing wrong if you put some indicator in your chart as long as you find it useful, otherwise a clean chart would be nice.
Trading is the game of fear and greed.
  • #7
  • Dec 10, 2008 6:39am Dec 10, 2008 6:39am
Quoting bksujal
thanks for ur replies guys keep more comments and opinions are appreciated
One thing I would recommend... when you find your key level, go back in time and look at how price reacts around that key level on the lower time frames. I look at the 5 minute and 15 minute time frames because I generally like to manage my trades from those time frames.

Just so you know, I am just learning how to trade. I win more than I lose but I don't trade live yet and when I do, it's for very small amounts of money.

Good luck!
  • #8
  • Dec 10, 2008 12:24pm Dec 10, 2008 12:24pm
I have been researching price action for some time now and have found that it is one of the most consistent leading indicators around. It gives you a probable destination of price which you can then plan your trades around. Actions of price around support and resistance can be repetitive in any market condition. I believe the study of it alone can make you a profitable trader (although I am not there myself yet). So what support and resistance should you look at? Of course there are plenty of ways to analyze the action of price. What is more important to you? For me looking at more then one time frames set of support/resistance is crucial. By using only one time frame you cannot see the bigger, maybe stronger support and resistance levels. By doing this you can probably stack more odds in your favor I believe. Auto Pivot points to me are extremely useful, daily/weekly for me. My price action analysis is based on the rule that if price retraces more then 50% it has changed direction. But I take it one step further. For me instead of using Fibonacci levels I would rather divide price into equal quarter levels. It seems more structured that way. We don't use fibonacci to divide the days of the year because one day is no different then the next. So why wouldn't we try and divide the action of the market equally as well? Just my opinion. Prove me wrong I love that.

Hindsight+Foresight=Insight
  • #9
  • Dec 10, 2008 1:34pm Dec 10, 2008 1:34pm
Quoting Kas1
I have been researching price action for some time now and have found that it is one of the most consistent leading indicators around. It gives you a probable destination of price which you can then plan your trades around. Actions of price around support and resistance can be repetitive in any market condition. I believe the study of it alone can make you a profitable trader (although I am not there myself yet). So what support and resistance should you look at? Of course there are plenty of ways to analyze the action of price. What is more important...
Fibonacci is only one possible tool. The biggest problem is too many traders jump into a trade right away based on nothing more than a 50% retrace. Support and resistance are really just about all that matters. They aren't absolute, sometimes they don't work. But when you combine price action AND support and resistance....you are onto something.

Also, S/R really only matters on longer time frames. Unless of course, you are looking for a margin call. Don't get bogged down on 15 minute s/r lines. Look at something more like weekly ones....they matter.

Clockwork
  • #10
  • Last Post: Dec 10, 2008 3:43pm Dec 10, 2008 3:43pm
Quoting SHR
Have a look here:

http://www.forexfactory.com/showthread.php?t=2331
yeah, it's not like that thread is more than 1000 pages long or anything...

Quoting bksujal
I have heard various traders say study price action and you learn the way the currency moves. The question I want to ask is how is it possible to study price action? Which time frames should I watch?
how about watching the chart you will be trading, in the time frame you will be trading?

but don't watch too long, cause this can cause your mind to go numb... different people have a different threshold for this... I guess a comfy chair helps
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