Price action basic. Part 7 - Page 72
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Thread: Price action basic. Part 7

  1. #711
    Despite the common point of view stating that price action patterns are stable, they could aslo incur changes due to the nature of markets. For example, such famous pattern like Head and shoulders (shown above) are no longer so efficient as it was before. To my opinion, the trader should not rely solely on this pattern because now it generates numerous false signals.
    The patterns related ot the movement inside of the range and breakout patterns are very contraversial too. The increase in volatility may lead to the situation when the prices just extend the range creating numerous false breakouts. The strategy based on entering the position near the borders of hte range looks attractive, but in fact you will need to have quite large range to keep proper risk management. If the range would be to tight, the risk-reward ratio would be very poor, that could lead to underperformance of the strategy in general. Thus, one will need additional confirmation to distinguish actual and false breakouts. For this purpose, traders can use different indicators like RSI or various moving averages.
    In my opinion, the most simple patterns provide the most relaible and accurate signals. For example, the trendlines. Trendline breaching works perfect almost for all instruments or timeframes. It is suitable for equities, commodities, or currencies. In other words, if you have a chart, you can use trendlines. At the same time, trendline breaching also needs to be confirmed by other pattern or indicator. Price action confirmation could be as a consolidation above or below the trendline (depending on situation). In fact, any trendline is support or resistance level and it works almost the same way, so all rules used for trading with support and resistance levels are applicable for the trendlines.

  2. #712
    Some good moving average could be sufficient , but other extra indicators could teach you how to monitor the market and see if there are some opportunities . Price action alone is good for beginners , but you should learn to add it with some other helpful objects like forex indicators in order to achieve your trading settings .I find more information Forex information, you can get a lot more reasons to like this forum.

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