Trading Forex Price Action Only – 10 Reasons Why It Is Awesome

price action trading forex

image credit – Steven Lewis

Trust me. I’ve been there. I spent the six years the wrong way to learn forex trading. Spending countless hours sitting at the table. Watching price tick up and down for as long as 7 hours straight.

Yes with no rest only a 10 second break for water and toilet. Suffering? Unfortunately core to the bone. That is because I have tonnes of indicators splatter across my screen. I’m waiting for their signals to align. At that time I have about 4 indicators, both lagging and leading on it.

I bet when you first started Forex trading education. You didn’t know you have to lose some of your money to make some from the market? Do you? I sure didn’t. At that is why I have so many indicators on my screen. I work hard for my money and I didn’t want to lose some not even a little to be profitable.

I don’t want to be wrong. I want to bet right with the trend. It took me 6 years to accept the reality of probability and expect some losing trades. And the regrettable fact is I could shave of five years trading on price action only. Another one year if I make my charts clean using price action Forex strategy

Trading Forex Price Action Only

Yes, this is the only way I know how that makes money fast. Fast forward to this date. I have been trading Forex price action only with lots of success except Feb until April.

Why? Because I greedy to seek another path. A much faster path to making money from Forex, or so I thought. At last he didn’t turn out to be so real after all.

Enough of that.

Here are 10 reasons why you should consider using price action trading forex. And it is profitable double time.

1. Indicators Are Lagging

Indicators are a reflection of price. That means after a price has made its move let’s say up. Only then would the indicator edge upwards. So if you are doing major back testing. Best to do it with a back testing software like Forex Tester 2.0 to see real time reaction of the indicator that you are using.

Never do back testing where the indicator is already there. You would have a lot of what if which will not be current.

2. Indicators Are Leading

Having said this, I do find indicators have a rather good sign of waning.

You see the movement is price always has its up and down. The critical point Forex price action traders are looking for it, would the price continue going up? If so where do I get in to ensure least amount of loss if I were to take part.

In a strong trend, most indicators would reflect either an overbought or oversold signal. Divergence is another piece that shows price is waning and that the movement is going to reverse.

Al Brooks once said that, when price is slowing down. Don’t look for reason to short. Look for reason where buyers could come in, find that level where they could push price up again.

3. Waiting For Indicators To Align

I’ve been in Singapore almost all my life. The traffic light system here is a reflection of the pace of life in Singapore. You see, a green light means go. a red light means stop. While an amber means the lights about to change.

In Singapore, we have a 2 way traffic where when a green light shows up, the cars at both direction parallel to each other are signal to go. While in Malaysia, the same signal turns up, only one direction of the cars are allow to go. The other 3 remains stationary.

What I’m saying here is if you have more than 2 indicators that measure price. Most often that not, they will not reflect the same sentiment. One would reflect that price has overextended while the other shows the trend is still strong.

4. Too Many Conflicting Interest And Signals

I’m over extending this tip here but if you do use more than 2 indicators. Make sure you know what is the trend doing now and the suitable tool when it is not trending. As far as I know, most indicators reflect best when price is ranging.

Some will reflect price is overbought or oversold regardless of how steep the trend is moving.

5. Simple To Understand Trading Forex Price Action Only

Have you heard of Heikin Ashi candlestick? It is a repaint indicator that shift the tendency of price and average out the bias of the trend. You see for every uptrend there will be mini downtrend. It is where this mini downtrend that buyers are coming. Justified that price level is undervalue.

Buying at cheap level knowing that price will recede back to previous high is a dream come true for those who missed the boat. The same hold true for sellers.

Heikin Ashi is an indicator that hides price, smooth en them out and give a picture of the trend. Those with delayed gratification or have immense control of discipline do not and need not use this. As this indicator covers the truth. The truth about behavior and reaction of price and its relationship with levels.

This is what I found out. When you are force to watch price action via candlestick only. You will not not only equip your mind to read price, you are also not susceptible to trade anywhere in the world or on any device.

This is because what the candlestick reflects is just price and it is the same everywhere. I meant devices or screen.

6. Charts Are Cleaner And Easy On The Eyes

Clean charts are eye drops for the eyes. It is also black and white for the brain.

Do you know it takes more then 4 million cells to think? I could be exaggerating as I didn’t get my facts right when I wrote this. But the fact is if you can help the brain to think lesser.

Information is then process faster and your decision making can be less hassle.

7. Faster To Diagnose When Trading Forex Price Action Only

Like I said, less clutter, faster to process and faster to make your decision. And that is good because this will lessen the load on screen time.

Why do you trade? Is it because you want to make lots of money or is it because you want to spend more time with your family and friends? More time to do things you enjoy.

8. Less Option To Scan For Forex Price Action Setups

After 7 years of trading, I realize that trading is a zero sum game. The other side of your trade has to lose in order for you to win. Yet if the setup you are looking for isn’t there or you are trying hard to make it up. Then your side of your capital will be their winnings.

I once read an article on trade setup and market makers. The brokers’ or market makers’ job is to take money away from your account. They would set traps or even go against their account just to lure you into the wrong side of the trend. This is when more suckers gets pulled in, they go big on the other side of your trade.

This is a typical false breakout strategy employed most if not recognizable pattern anytime of the day.

Don’t believe? Check your charts for candlestick with high wicks. Or a full blown engulfing candlestick. Real weight watcher.

If you learn Forex trading using price action Forex trading strategy, not only will you spend less time scanning for setup. You will also save hours on screen time. Life is too short making out with your chair.

9. Mobile Lifestyle The Ultimate Price Action Forex System

There are many things in life that most baby boomers regret on their death bed. One of them is to reach out to more people. Visit more places and make out more often.

Most MT4 brokers have apps that integrate well with smartphone. The issue is customize indicators and alerts and free to keep levels are unavailable at the time of this writing.

What I’m saying if you are on a holiday with your family, the last thing your spouse want to be is in bed with you watching charts.

Snoozy.

10. Price Is Current And Transparent

This year sometime back in February, I found out about market profile. It is an indicator that draws volume at the side of price action.

For example if the strength between the bears and the bulls are equal in participation. A breast like profile would appear beside the candlestick.

If the bears are strong, a old woman’s breast that has fought time of gravity would reflect the sentiments of a downtrend. It is like having an x ray vision and watching tourist through the airport custom.

You think that be great. But it’s not.

Lots of guesswork has to make in comparison the the strength of the trend. And a lot of reflection has to guess, in comparison to trading Forex price action only. At the end the final decision of your entry level is derive from action of the candlestick made by price.

I find too many brain work has to be decide to use the market profile to its full potential.

Dump it I did.

It made my brain less painful.

Really Mess up.

Conclusion

Why don’t you do a test drive and make your charts look clean. Remove all but one indicator. You do need time to test and adapt to this new habit. The important thing is will it meet your needs?

Try it, let me know if trading Forex price action only will work for you.

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Comments

  1. Hello David,
    It was so awesome to read this post. You really need to know how i landed up here. And thank god i understood after an year unlike you took 7 years. For the past one year, i was just jumping from indicators to indicators, strategies to strategies, day night with my charts, even my dreams were those indicators giving signals. I struggled a lot to find out a something that will work someday. My MT4 indicator window shows a long a really long list (sometimes it takes time to show the list) and my template list almost equal to that. You may think i didnt try anything with patience, but the truth is almost all the strategies does the same thing in one way or other. Recently just 3 to 4 days before, i decided to just erase everything, indicators, strategies, templates, EAs, signal providers, account managers (its a big story though). Now I am left with only a little balance and a clean chart with black screen and green candles. I have heard most places the word price action but never understood what it is. After clearing everything, i was just looking at the charts without knowing what to do. But something amazing happened, now all my predictions were going in right direction just by looking at those candles. So now i have started to study about clear price action. If anywhere i see the name “INDICATOR” i just skip it. And your 10 awesome reasons really boosted me a lot. Thanks MAN.

  2. Im tired.. Please enlighten me on how to use price actions.

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