2 Simple Price Action Techniques.

2 Simple Price Action Techniques.

The Price Action trading is a way of trading which involves the technical analysis of the historic data of the market.The price action traders usually trade the market without using any indicator.They just focus on a simple chart and use the candlesticks and price bars to trade.Price action trading is most simplest and easy form of trading for the newbies.There are many simple as well as complex methods to use price action in trading but we are discussing just 2 simple methods of price action trading.

1.Price Action with Support and Resistance :

Supports and Resistances are the key points to trade in market.Many people only use support and resistance for their trade.Using price action for calculating and highlighting the key points of market is very easy.You can use candlesticks for this purpose.See the chart below to understand it.

By using the candlesticks or bars,you can easily see all supports and resistances on the chart without using any indicator.These key points give you good stop loss and take profit points.For example,in the above chart you can buy the pair at support level and set your stop loss 10 or 15 pips below the support.In case if the market hits your stop loss and tend to move down,then you can sell the pair on the closing of daily candle below the support and set your stop loss 10 to 15 pips above the support level (by the way,this support have become resistance now).You can set your take profit at the next support level or use Fibonacci Levels. 

2.Using Candles Formation in Price Action Trading :

Different types of candlesticks formation take place due to the movement of the market and thees candles also makes some patterns.There are three types of major patterns which indicates the trend of market.

1.Bullish Pattern.

2.Bearish Pattern.

3.Reversal Pattern.