Price action basics. Part 3 - Page 27
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  1. #1
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    Price action basics. Part 3

    Hello again.

    let's contiunue our studies about price action and how to use it.
    See previous posts here:

    Price action basics. Part 1
    Price action basics. Part 2

    As you might notice, I'm not suggesting to simply FOLLOW PRICE, but I suggest you to rely on MARKET LOGICS.


    Why not to simply follow price action?


    Price is simply the advertising mechanism and in most cases it can be misleading.

    "Should you accept this breakout", "should you fade this market" and so on and so forth. Price itself will not give you clues for that. You have to analyse fragile equilibrium between price and value to get answers on these questions.


    What is Value?


    It can be called area of aсceptance - area that market will more likely revisit or stay near that area for some time. Trading markets, you should rely on fundamental market principles.

    And of of them claims:

    "The goal of the marketplace is to faciliate trading"

    If you think about this principle, you will understand that market needs liquidity to facilitate trading. By "liquidity" I don't mean single buyer that steps in and kicks the price.

    By liquidity I mean plenty of players with different perspectives, participating near given price level. If you have that pluralism in opinions, you have value area.

    If liquidity is not enough, market auctions higher or lower to find it. Guess, how it attracts liquidity? Of course, it offers higher or lower price - nothing is new.
    That's how market auction works.



    There are 2 basic types of price action if we look at it from "price-value" perspective.

    I will use the simpliest way to vizualize value on market - moving average. Of course, it's not that simple in reality, but it would be enough to show you how it works.


    1. Value is leading, price is following.

    For example, it occurs when value is lower. Market accepts lower prices and rejects higher prices, yet it has scanned higher prices for liquidity.

    You might notice that value is going sideways.

    In this case market has no reasons to immediately leave this value area. You may expect some rotation before something happens.

    Attachment 968


    2. Price is leading, value is following

    In this case you may notice, that price runs away from value, there's often a gap between price and value, and this is an indication of strong imbalance - sellers are in control and it's better to trade in sync with them.


    Attachment 969


    to be continued...

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    Last edited by Value trader; 09-02-2013 at 12:11 PM.

  2. #261
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    Whenever you listen to the news and the opinions of others, you then have to filter that data through your thinking process. You actually have to make some kind of decision concerning all those bits of information you come across. Attempting to understand how all those various inputs will affect the markets is usually difficult to manage. Predicting how traders will react to the plethora of news items is often a haphazard and illogical process to go through. It is really a guessing game that most so called experts are unable to consistently figure out.

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  3. #262
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    Trading is all about sighting opportunity and to see which levels which hold and which will give away and when we have strong conviction about our trading then there the chances of survival and with it making money are much more rather than trading with old historical values and rely on past data too much.

    Thanks & regards

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  4. #263
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    [lang=id]I do not understand very well about price and action. Because i less so understand some of the skeleton it works. But i think almost similar to support resistance. If the price reached a certain level then he will turn a direction to repair. And there we can take profit based on target[/lang]

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  5. #264
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    This has the wonderful support exactly about price action AND my partner and i also employing this way of trade throughout forex. However i still don't understand Around the value. What do anyone mean information on value? is usually It your current shipping average signal Utilizing your chart? IN ADDITION TO whether or not a person don't mind, may we learn ones setting of taking Average In your chart? Thanks. :)

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  6. #265
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    One think we highly consent within is actually The item my partner and i need to spot the actual trend to help trade within its direction ALONG WITH keep THE trading profitable. my spouse and i dont think it is suitable advise which technique/indicator make use of to search for out Concerning the trend or maybe momentum, some other traders will certainly have his or her way which these are generally comfortable inside IN ADDITION TO that functions pertaining to them. Myself never EMPLOY indicators but This really is MY market view which let me realize In regards to the trend often.

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  7. #266
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    It's the incredible guide exactly about price action ALONG WITH when i additionally using your way of trade with forex. However my partner and i still don't learn About the value. What do anyone mean all about value? is actually That ones carrying average program code Using your chart? IN ADDITION TO whether or not an individual don't mind, will we recognize ones setting of carrying Average Utilizing your chart? Thanks. :)

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  8. #267
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    Quote Originally Posted by Fahim1 View Post
    It's the incredible guide exactly about price action ALONG WITH when i additionally using your way of trade with forex. However my partner and i still don't learn About the value. What do anyone mean all about value? is actually That ones carrying average program code Using your chart? IN ADDITION TO whether or not an individual don't mind, will we recognize ones setting of carrying Average Utilizing your chart? Thanks. :)
    Price action strategy will be important for naked traders who used it as consideration for making good decision in every transaction although it will be more accurate if price action strategy is combined with fundamental analysis and support-resistance strategy so don't use only one consideration in making good decision.

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  9. #268
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    every one of the explanations, I've got conclusion That an strong holder always Choose very long term trade. i do not have your ability for you to plan extended term trade, meaning when i have analyze price movements with night out H4 Equally trend points (follow your current trend has been made coming from strong holder) and then take action code towards under H4. What do a person think?

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  10. #269
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    I think to recognize ones trend of your market through the price action can be very simple AND ALSO Whenever when i are looking your trade by the trend my partner and i lone want to help end up being trading from the ver obvious trend ALONG WITH whether your current trend is usually not obvious next prospects are This really is not very strong trend AND may shop additional trade just like variety trades.

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  11. #270
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    The transporting average serves being a very good indicator to tell ones true trend. some you likewise trade with these kinds of moving average especially crossovers of 3 or 3 moving averages but everytime i advice them to help shift for you to price action to be able to end up being added successful.

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