Focus on Trading Price Action in the Markets
Here’s a Forex Trading lesson that every newbie should pay close attention to. Many new traders are consumed with trying to find the ultimate trading indicator, the one that will finally put them over the top. The problem is that this is a futile search. Sooner or later this fact will become evident to those searching for the holy grail. Let me tell you what the best trading indicator that is available to us as traders. It is price. That’s right Price. Pure Price action beats any combination of RSI, Stochastic, MACD, or whatever. The reason is all of these indicators are computed from Price itself. So what’s the point of having a middleman, which is basically what indicators really are.
Focus primarily on price action and you will begin to see things much more clearly. There is no doubt about this. Think about it, computers have not been around that long, maybe for 50 years or so, but the financial markets have been around for hundreds of years. Back then traders used to read the tape on the exchanges, and they would study how price was moving to gauge the overall direction of the market.
Though Tape Reading seems to be a lost art these days, this method can easily be incorporated thru reading price action on the charts. There is no need to complicate your trading, as trading is quite simple, and price action trading in forex provides the trader with a logical methodology with which to approach the market.