Profitable Price Action Trading: – Part One

Profitable Price Action Trading

Forex trading is a worldwide phenomenon, in the sense that every single financial institution existing on this God’s green earth participates. Some participants participate just to regulate their economy. E.g. Central Banks. And yes, we are going to focus on the for-the-profit participants, which are us, hedge funds and mutual funds etc. How do they trade? What system of analyzing the market do they use? What indicators do they use in their analysis of the market? Let us see.

Price Action Trading is a method of trading whereby an analyst/trader studies the activities of buyers and sellers, takes trades base on these and increases the probability of coming out profitable. Such traders study the behavior of chart and candlesticks (since that’s the only proxy that represents the real activities of the participants). He looks for such candlesticks patterns that reveal their activities. E.g rejection bars, inside bars and engulfing bars. He marks the levels of demand and supply on his charts and continues to watch for obvious signals around these levels marked.

price action

Professional traders don’t use indicators for taking trades. Yes, you heard right. Indicators are only use for market presentations. Richard Quest from CNN uses indicators for market reporting. And that is the only thing they are used for. Let me tell you the problem with using these indicators.

There are practically zillion settings to these indicators. Amateur traders tend to run into the dilemma of which indicator settings they will use. Unfortunately, there is no answer to this complex question. They are confused and continue to lose their money to the market. And of course, they eventually give up on this wonderful chance of money making.


For you to be profitable in this place, you MUST be where the big boys are. You cannot expect profit when you are secluded. Every indicators (yes, there are indicators that are not tweaked) and non indicators should tell you where the market movers are, in order that the god of profit might smile on you. Examples of such indicators are Fibonacci retracements and the pivot points. Traders in NYSE use the standard pivot point indicator. Of course it should be used with other non indicators to increase your chances.

Think about it. Conventional indicators have many ways of setting them. There are practically ways of tweaking them for every single trader on this planet. So, which one is the right setting? Ditch the indicators. Focus on the plain charts. For one to be profitable, he must be where the market movers are. This alone has nullified the use of indicators. Questions are; how and what then should a trader use to be profitable? We are going to discus that in subsequent articles. Keep visiting this site, keep staying ahead of the market and keep profiting.

Let me hear from you.

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