Price Action is my favorite indicator, because it’s the only one that will never tell me a lie.
And this is true; albeit maybe a little ‘opaque’ for new traders, or even experienced traders that haven’t yet found the study of price action. The study of price action entails reading past prices, to build an approach or plan for the future.
Surely, most traders that end up ‘making it’ as a trader will find this specific study of technical analysis eventually; but it’s usually only after multiple disappointments and failed attempts at building indicator-based strategies that zig when the market actually ‘zags.’ So, please allow me to elaborate on my earlier statement.
Price action will never lie to us, as traders, because it never purports to tell us what WILL happen; but rather it only tells us what HAS happened.
There is a chasm of disconnect between these two premises.
As a trader, you will NEVER truly know what will happen in the future. Any indicator or indication of what MAY happen in the future is just a possibility. And even then, it could be a remote possibility at best because that indicator you’re using - well, it’s really just a fancy way of looking at previous price action.
So, regardless of the strategy - those same boring concepts of risk, trade, and money management are of the upmost importance to the trader.
But after that - traders can focus on getting the probabilities on their side as much as possible through analysis, and this is where price action can really shine.
Because, once again - this is a ‘clean’ way of looking at past prices.Most of the times,histories repeat themselves.
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Many traders shout all over the trading room everyday.They aways say "price action is around so so so price level"
Doe this make any sense? Does price action have any relationship with profitabiltiy or success in trading? More light please?
Thanks.
