November 09, 2017

The Basics Of Forex Trading Strategies With The Price Action

Basically the price action is a sequence of price movement over time, and the analysis of price action is done by observing the formation of the candlestick bar. Here are some terms in Forex trading with price action:
forex trading strategy price action

Up bar: nicknamed ' bullish ' bar, that bar with high level which is higher than the previous high (higher high) and the low level which is higher than the previous low (higher low). The sequence of the up bar in the image above shows the movement of the uptrend. Generally the closing price from the bar up higher than its opening price, but it could also lower as it appears on a black candlestick bar at the sequence up bar picture above. However the bar is included in the up bar because the lowest and highest levels are still higher than the level of the highest and the lowest bar before. The sequence up the bar indicates that buyer or ' the bulls ' were in control of the market.

Down bars: also known as ' bearish ' bar, that bar with high level that is lower than the previous high (lower high) and the low level which is also lower than the previous low (lower low). The sequence down the bar in the image above shows a downtrend movement, and shows that the seller or the bears ' were in control of the market.

Inside bar: bar with high level is lower than the previous low level high and higher low before. Many traders consider the bar with high or low levels similar to the previous bar as the inside bar. The formation of the bar as it shows the uncertainty of the market or the State of consolidation where buyer and seller mutually wait, if it penetrates the highest level bar earlier then the winning buyer and vice versa if the low level penetrating bar before then the winning seller and controlling the market.

Outside bar: also known as the ' mother ' bar, that bar the ' swallows ' inside the bar, or on the formation of engulfing bar is the bar which ' ingest ' bar before. In principle the outside bar is a bar with high level which is higher than the previous bar's high level or a bar afterward, and the low level that is lower than the low level of the previous bar or a bar afterward. In terms of candlestick formation, a combination of outside and inside bar bar is often nicknamed ' harami '. In the example above the closing level outside the bar higher than the opening level which indicates buyers are in control of the market consolidation before they occur.

Forex Trading signals from Price Action
The formation of the bar on price action reflects the sentiment of the market, and can provide guidance or direction of price movement. Signals or cues from price action is usually indicated by the pin bar formation which is a bar with a tail (axis) that is longer than its body. The more long tail means that the stronger the sentiment of rejection at certain price levels.
In the circumstances of the market that are trending, pin bars usually suggests the impending movement of the reversal or contrary to current trends, and pin the bar often called pin bar reversal. Here are a few pin bar reversal where one failed (failed) or trading signal is wrong (false signals):
forex trading strategy price action

Supporting Factors Forex Trading Signals From Price Action
To avoid possible errors as in the picture above, then the necessary supporting factors confirm trading signals of price action. So, the trader can choose signals that the probability is highest, that is confirmed by some factor endowments.
As a confirmation or constituents are level-the level of support and resistance, trend direction as well as technical indicators. The indicator that is often used is the moving average for confirming the direction of the trend. The following examples of forex trading signals (pin bar) with 3 (three) constituents:
forex trading strategy

It appears the pin bar formed confirmed by three factors, namely: the direction of the trend (downtrend), rejection by the horizontal line resistance (failed to penetrate the resistance), and also the denial by the dynamic resistance i.e. area between curve exponential indicators moving average (EMA) 21 and ema 8. Thus the probability of the success of the entry sell after pin bar is high.

If not in this group are trending market conditions. Patterns of consolidation that is sideways (ranging), triangle (triangle), pennant, and others. There are times when the market moved in a narrow range with the erratic pattern, this State is called on choppy that are difficult to predict and are best avoided. The following examples of forex trading signals from price action for trending and ranging conditions:
forex trading strategies

The lowest level prices seemed to penetrate the outside bar, which means the seller back in control of the market. It is also supported by transpiration support level.
Thus the explanation of the basics of price action in forex trading. May Be Useful.


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