Price action method and repetition of market
Price action method is one of the basic methods of trading in any market.
In price action method, no indicator is used and traders make their trading move based on the basic knowledge of price movements in the market.
The trade market repeats the price movements and the results time to time.
Once the same type of trend is repeating, price action traders follow the previous market steps and decide the next move.
Price action trading, thus, needs a lot of observing to get a clear trading concept.
Traders need to observe the market, know how the trends and the patterns work to get the basic knowledge of the market and then start trading.
Most price action traders use either bar chart or the candlestick chart to observe the price movement.
Candlestick charts show the same information as bar charts but in a graphical format that provides a more detailed and accurate representation of price action.
Candlestick charts visually display the supply and demand situation by showing who is winning the battle between the bulls and the bears.
Candlestick formations make all single bar and multi-bar patterns significantly easier to spot in real time.
The interpretation of these patterns is based on the previous history of the market.
So, the candlestick patterns are the results of the repeated history of the market.
Thus it increases trader’s chances of catching high probability trade setups.
Candlestick charts offer everything bar charts do and more as the patterns are based on the previous actions of the market.
Using them is a win-win situation because traders can use all the trading signals normally used on bar charts with the added clarity and additional signals generated by candlesticks.
Thus, price action method and market history is correlated in many ways and traders need to observe the market carefully to know the results of market in various situations.
Price Action Trading and Candlestick Charts
For traders who are trading in the market frequently, candlestick chart is a common term.
But beginners should have the basic knowledge of candlestick charts.
Candlestick chart is a style of financial chart.
Candlestick charts are considered as one of the best technical trading tools.
The chart is made out of every day’s price movement candles.
The candles are made from the highest, lowest, opening and closing price of a day.
The chart shows the ups and downs of the market to the traders by arranging these candles serially.
But that’s not why it is used as a tool.
The candles form different patterns while showing the price movements of the day and other days.
These patterns can indicate to certain possible changes in the market.
There are more than 100 simple and complex patterns available in the candlestick charts.
The patterns can be either bullish or bearish.
The bullish patterns show the buyers overpowering the market.
The bearish patterns show the sellers becoming stronger in the market.
The candles can be either red and green or white and black.
Every pattern can be interpreted by the traders and experts.
Till today, candlestick patterns can predict the future of the market more accurately than other tools.
The high accuracy of the predictions done from these patterns is the reason behind the popularity of candlestick charts.
Price action trading method needs to observe the price movements of the market.
Thus, price action traders use either candlestick charts or bar patterns to do so.
By using the candlestick chart and the patterns, traders can easily decide whether they should enter the market or leave.
There is lots of confusion among the patterns as most of them are quite similar with opposite meanings.
But still, price action traders mostly choose candlestick charts as one of the best trading tools.
The advantage of candlestick chart is anyone can make it if they have all the important information of the market.
Price action trading- why candlestick?
Price action is one of the common trading methods practiced by traders regularly in the market.
The difference of price action than the other trading methods is that price action method is based on the price movement of the market and no indicator is used.
Price action method needs a chart like bar chart or candlestick chart for observation of the price movements in the market.
Most price action traders use candlestick chart for this purpose.
Candlestick charts are one of the oldest trading tools in the history of the market.
It is still one of the most popular tools of trading.
Candlesticks form various patterns in a chart.
These patterns can foretell the upcoming changes of the market.
Price action traders use these patterns and previous market results to make a move in the market.
The candlestick patterns are very much influenced by the trends and the price movements.
The interpretation of the patterns is depended on the repeated result of the market just like price action method.
Candlestick charts show the same information as bar charts but in a graphical format that provides a more detailed and accurate representation of price action.
Candlestick charts visually display the supply and demand situation by showing who is winning the battle between the bulls and the bears.
Candlestick charts reveal another dimension of the given period’s price action by pictorially displaying the force behind each price bar’s movement.
Candlestick formations make all single bar and multi-bar patterns significantly easier to spot in real time.
Thus it increases trader’s chances of catching high probability trade setups.
Candlestick charts offer everything bar charts do and more.
Using them is a win-win situation because traders can use all the trading signals normally used on bar charts with the added clarity and additional signals generated by candlesticks.
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