I have wasted a lot of time on things that do not work. I use to try different styles of trading charts and different type of indicators. My charts were stuffed with every tool that you could imagine. Did any of this chart oranament make me a better Forex trader? No! In someone way I believe that it actually held me back and slowed down my progress as a trader. The truth is that no one really needs all of those things on their chart to pick high probability trades. There is a much better way to found those trades.
A better way to find high probability set ups in Forex or any market is to learn how to read the price action. Price action is the story that creates what you see on the chart and it has to be viewed in real time. If you look back at an old chart, you will miss a lot of the story that the price fluctuations tell. When you simply spend months of time looking at how charts develop, you will be able to tell the ending of the story ahead of time. This is the beauty of understanding price action.
Price action will show you how the big banks and institutional traders develop intraday trades. You will be able to spot how they setup both novice traders and professional traders. There’s nothing more magical when you start to be able to predict what is going on and what is going to happen because of the price action. I remember my first style spotting a fake out 10 minutes before it happened. I felt so accomplished and proud of myself. That was my first Yoda moment and far from my last. Give this a try and you will understand what I am talking about.
So is this magic and all I need to trade. Yes, you can develop your trading style all around price action but be warned that this is a form of discretionary trading. You will be making decisions off of subjection information and beliefs and if you lack the fundamentals of trading this can comeback to hurt you. The fundamental that you need to have are: Trading using a pre-planned system that you will not tinker with due to fear or greed. You have to have a money management strategy. If you understand these basics then trading Forex based on price action might be for you.
As you can see, the price is right! Price action tells the whole story of what has and will transpire in the Forex market. By observing price action, you will be able to accurately predict where the market is going, what the big money traders are trying to do and why a movement in price happened. Whereas technical indicators lag the market and are based off old data, watching price action focuses on the here and now, and on the only thing that matter when trading. What is that one thing, PRICE.