Price action basics part 2 - Page 2
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  1. #1
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    Price action basics part 2

    This is continuation of series of post. Read beginning here

    Strong holders vs weak holders


    Ok, now if we have distinguished weak holders from strong holders.

    And what we really have to do - we want to know, at least to assume what professional players are doing. By professional players I mean dealers or institutions that have to consistently deal with big volumes and give their clients at least average good fills.


    Institutional activity


    When we are talking about institutional activity, we are talking about strong holders.
    That guys have almost unlimited buying power at their disposal, but it doesn't mean that they want take money from you, they usually have large order from their clients. It not always means that they want to purchase from weak holder, squeeze them and hunt for their stops.

    They just want to accumulate position not sqeeezing price against themselves.


    First of all, if you look at this chart, how do think, where (on what prices) institutional player was buying (if he was buying at all here)?

    Attachment 800

    Expected answer is that they were buying at lower level.

    But think about their volumes. They are big enough, and they simply would not have enough liquidity to build a position there. They usually have to accumulate - to buy several times, to absorb somebody's sell orders. Otherwize they will not have enough liquidity and make prices grow immediately

    So, their buying will be distributed within whole trading range:

    Attachment 801

    And the first clue of institutional activity is acummulation on moving market (rising or falling market).

    They don't have enough order flow going down to absorb, so they have to squeeze prices a bit, but nevertheless they have good average price, not the worst of the period.

    It's a wave-like process. It ends with a breakout

    Attachment 802

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    Last edited by Value trader; 11-14-2013 at 07:54 PM. Reason: any

  2. #11
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    Quote Originally Posted by kamrul View Post
    It is based on technical analysis of historical market price action is the best way to make money is one. And we know that if we start the process from the model can be used to go down to the market, once again, the same pattern of movement it I am accepted.
    What do you mean - the best way to make money?

    What technical analysis do you use to make money?

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  3. #12
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    Price action is one of the most helpful tools in Forex trading . It is effective as well as easy to use . It's process is also very simple .Price action is both helpful for both newbie and experts .Through proper study of price action we can predict about the ensuing market values .So much risk is much profitable also but condition applied .We should not avoid our own plane .More over price action maintain history also .

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  4. #13
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    Quote Originally Posted by raazsr1 View Post
    Price action is one of the most helpful tools in Forex trading . It is effective as well as easy to use . It's process is also very simple .Price action is both helpful for both newbie and experts .Through proper study of price action we can predict about the ensuing market values .So much risk is much profitable also but condition applied .We should not avoid our own plane .More over price action maintain history also .
    Well, i think that i've readed something like this before actually. Are you copying it from somewhere and edit it? Sorry if i'm wrong but that's actually how i feel after reading this post. Anyway, i think that it will be better to go with the flow and follow the trend in the market rather than watching price action. That's how i truly feel as the price action isn't compareable to that.

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  5. #14
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    This issue of the price action baffles me when traders trades it alone, it might work well for the kind of trader that are long term, but i do not think that it can simply work for the short term or intra-day trader, although you might want to prove that the time frame will matter on what yo will do, but let me tell you the higher time framed charts are more arranged than the shorter term time frames. If i may ask; In the beginning of the price action, what happens if the candle formation suddenly changes? i know that this often happens.

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  6. #15
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    Quote Originally Posted by cozard007 View Post
    This issue of the price action baffles me when traders trades it alone, it might work well for the kind of trader that are long term, but i do not think that it can simply work for the short term or intra-day trader, although you might want to prove that the time frame will matter on what yo will do, but let me tell you the higher time framed charts are more arranged than the shorter term time frames. If i may ask; In the beginning of the price action, what happens if the candle formation suddenly changes? i know that this often happens.
    It's very difficult to talk about market situations outside particular context.
    Can you attach a screenshot to show it?

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  7. #16
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    Price action combine with candle and chart pattern is very accurate and you have any experience to give you profit unlimited..any technical like price action you in order and out order too..this strategy need more experience and money management something market not to predicted

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  8. #17
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    Divergences , as the thread starter has also included one picture too, I would like to add that MACD and HISTO , these two specific indicators helps the best to find the divergences of 3 kinds; hidden and normal and one another one also.

    TIP: But always try to look for a candlestick pattern and also a near term S/R levels too :)

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  9. #18
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    Quote Originally Posted by taharoyal52 View Post
    Divergences , as the thread starter has also included one picture too, I would like to add that MACD and HISTO , these two specific indicators helps the best to find the divergences of 3 kinds; hidden and normal and one another one also.

    TIP: But always try to look for a candlestick pattern and also a near term S/R levels too :)
    Yea you're right, the best moment is to determine the signal in the area of ​​support and resistance, whatever the indicator are used. I also often identify divergence to ensure there is a reversal in the areas of support and resistance. Support and resistance is the best filter for a divergence strategy.

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  10. #19
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    There should be no emotions involved when trading price action trading strategy. Because sometimes there are wrong formations of price action and we should wait until the real price action forms. And yes, we should not be greedy when trading . Because sometimes the patterns fails no matter how good the pattern was , but losses are inevitable too. So, we must control our emotions while trading.

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  11. #20
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    All of the answers includes to watch price action in that particular region. Support and resistance, candlestick patterns near the support and resistance levels, and some other price action patterns. Just trading on those patterns and formations will help you gain a lot of pips from this market where not everyone is successful.
    The same i do , and the same i advice to my other friends and fellows. Its up to you to follow.

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