Price action basics part 2 - Page 48
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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 08:54 PM. Reason: any

  2. #471
    Registered user Quid's Avatar
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    Quote Originally Posted by Abhishekwala View Post
    but the biggest impact is at the time of news release through the large merchants and banks who have very large capital.
    Trading the news with high impact news at the good news time with price action is the good and best trading strategy for fundamental traders.The market which can be profitable only when there is news release make the large capital of bank and the merchant become more profitable for them.The traders can be the profitable traders with good winning trading strategy and make the market with the price action trading strategy become the profitable place.

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  3. #472
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    Quote Originally Posted by AmitChallenger View Post
    There is nothing wrong in news trading if the trader is able to make good profits and capable to avoid losses. But actually i am a scalper so my targets are usually small not exceeding 40 pips. i do not believe in big targets because it takes a long time through which news may appear to reverse the trend in the opposite direction.
    New trading is a good opportunity for traders who have experience about it. Because news can cause the market to move in a very volatile fashion that can become difficult for amateurs to handle. It is often said that analysis and study of news is not easy. But we can take help from the analytics and views provided by Roboforex for that matter. Once we taste the potential of news trading it is difficult to stay away from it.

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  4. #473
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    Quote Originally Posted by AmitChallenger View Post
    There is nothing wrong in news trading if the trader is able to make good profits and capable to avoid losses. But actually i am a scalper so my targets are usually small not exceeding 40 pips. i do not believe in big targets because it takes a long time through which news may appear to reverse the trend in the opposite direction.
    Technical trader's like to hold their trading for a long time and I don't think that news can reverse the market trend all the time, rules are very simple and clean in technical trading if you are following a technical trading then you don't have to worry about the reverse situation during trading. You have to stick to your technical trading rules and in average you will surely gain good profit.

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  5. #474
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    Quote Originally Posted by PROPENSITY100 View Post
    New trading is a good opportunity for traders who have experience about it. Because news can cause the market to move in a very volatile fashion that can become difficult for amateurs to handle. It is often said that analysis and study of news is not easy. But we can take help from the analytics and views provided by Roboforex for that matter. Once we taste the potential of news trading it is difficult to stay away from it.
    Do you have any experience of news trading sir? Personally I don't have any experience of news trading in forex but nice to hear that trader's are enjoying their trading with news and making money in forex by it. I heard from one of my friend that the use of pending order's is very famous in news time trading strategy. I like to do technical study so I am still happy with it than news trading. News trading is seeming a very risky trading style so you are right that better to stay away from it sir.

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  6. #475
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    Price action is really helpful for the traders. I always appreciate price action in all kind of trading strategy. Because it has the higher accuracy. When there is a falling wage we can sell when the price show us a sell. On the other hand when the price is going to higher and it creates long tail then we should buy immediately.

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  7. #476
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    Quote Originally Posted by Joy123 View Post
    Price action is really helpful for the traders. I always appreciate price action in all kind of trading strategy. Because it has the higher accuracy. When there is a falling wage we can sell when the price show us a sell. On the other hand when the price is going to higher and it creates long tail then we should buy immediately.
    Are you talking about the pin bar trading, I feel that trader's should follow the major support and resistance, so they can buy on the bottom and can sell on the higher resistance and major points. I am very happy to see euro usd upside bullish movement and one day back it was a great combination of fomc and support point in euro usd pair. Right now I am not focusing much on scalping and concentrating only on support and resistance with h1 time frame.

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  8. #477
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    Quote Originally Posted by Earnperfect View Post
    Are you talking about the pin bar trading, I feel that trader's should follow the major support and resistance, so they can buy on the bottom and can sell on the higher resistance and major points. I am very happy to see euro usd upside bullish movement and one day back it was a great combination of fomc and support point in euro usd pair. Right now I am not focusing much on scalping and concentrating only on support and resistance with h1 time frame.
    I am agree with you. It's important to follow support and resistance point although it is possible if support or resistance is broken and price will continue on trending in the same direction. But it is very risky for you to against the price movement when it has reached on support or resistance. In mostly condition, price will move back when it reached on support or resistance point especially if it is strong support or resistance. Price action can be used as signal for certain direction of price but you must consider condition of market too. Don't use price action blindly.

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  9. #478
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    the big player returns of movesment with the trading should draws of contrast with the chart as trader to work of the decision on appealing risks on following trend on running direction to gains with the good numbers of target by the ends of sequence with the trading decision with the market.

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  10. #479
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    Price action is a most use full analysis. We can use this analysis system to determine the trend line. But understanding the price action is difficult. But if we can learn about this price action then this business will be so easy for us. Without knowing about price action, forex trading is very hard. Support and resistance also a part of price action.

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  11. #480
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    Quote Originally Posted by Joy123 View Post
    Price action is really helpful for the traders. I always appreciate price action in all kind of trading strategy. Because it has the higher accuracy. When there is a falling wage we can sell when the price show us a sell. On the other hand when the price is going to higher and it creates long tail then we should buy immediately.
    Better to follow the proper trading strategy to make buy and sell, or show us how you want to buy and sell in the market. That's true that accuracy is really good in price action trading, but I focus much on my management and psychology levels too. Many time my price action buy and sell broken by the market and its very important for me to take care of my risk and reward, my management, every time.

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