Are you talking particularly about this trade or generally about all trades
Cross trading 2 USD/JPY (Picture above was 40.35 mins in the webinar)
Your analysis during the webinar was:
Cross bar (Doji) appeared and price went down. A little bit of AIR POCKET appears and
price went up. So BUY STOP to cross centre
1.Where is the STOP LOSS?
2.What is the TARGET
3.Please show me the AIR POCKET here.
You concluded by saying: you can buy and sell with this cross centre trade
4.Are you talking particularly about this trade or generally about all trades?
Price Action Trading with candlestick
When securities’ prices move, it’s known by many in the investment world as a price action trading.
Price action is one of the attributes that is closely monitored by traders to see how well a tradable asset will fare in the market
and a great indicator if it is a good sell or a bull
Prices of trades are compared to its previous and actual price changes and allow trader to decide what to do with these securities.
This provide a good insight for trading assessments especially if market algorithm cannot be used to assess a security value.
Because of this, usage of price action trading is considered a method of technical analysis in foreign exchange.
What is Price Action Trading?
Price action trading or simply price action is a trading method that allows a trader or analyst to analyze what’s happening on the market
and provide trading judgments based on the actual random movement of prices.
It is a one of the technique of a technical analyst to price movement predictions and assumptions based on price activity.
Traders initially based their decision using this technique to find a trade worth their time and then eventually combine their decision
with other technical analysis practices to gain better or best result.
Usually, price activity is presented on price charts.
These charts consist of the price or value of the trade versus the date when the trade reaches that price.
These data usually comes from the movement of the market prices expanded over a varying period of time and are generated from all financial markets.
As an investor or technical analyst, looking at this price chart decreases the time for them
to analyze the future movement of the trade and will also provide them immediate data to help them decide to buy or sell it.
However, this type of analysis is prone to human error and is purely speculative and this price action trading is not always without downsides.
Price action is purely subjective and depends on the analyst who read the data.
This takes a keen eye and lots of experience to draw out the best conclusion on how the prices move and
react to a certain circumstances instead of technical indicators which are usually more mathematically precise.
Aside from stock traders, security traders like forex, commodities and equities can use price action trading technique
to help them predict and speculate the movement of the securities they are working with.
Traders who are trading for profits in a short or medium term gain a lot when using price action trading as a analyzing tool.
It can give them data long enough to show the price movement but short enough so it cannot be too confusing to the analyst.
The Candlestick Pattern and its Reliability
Candlestick pattern is a technical charting that has been used for more than 100 years.
This type of charting became popular among price action traders.
There are many types of candlestick charting but not all of them work the same way.
First developed in Japan by a Japanese rice trader named Munehisa Homma,
the candlestick charting is one of the tools that many traders—who base their decision using price action use.
Candlestick is a well-known chart that help identify the activity of a given trade.
Although it became very popular to thousands of traders, this type of action price trading
and its reliability decreased when hedge funds as well as their algorithms criticized its worth.
Because candlestick charting reflects short term outlook that last approximately less than 10 sessions, it remained popular to some brokers.
At first, the candlestick pattern seems to be a little too complex to learn.
But, in truth, this technique is almost the same as the other charts available where it shows the market’s open or closing price,
the highest price of the day, the lowest price of the day and if stock closed lower or higher.
The big difference however, is that it, aside from the useful date it represents, also include visual
representation of the emotions affecting the price action and its effect on the final pricing.
Reliable Candlestick Patterns.
Abandoned baby- This is a type of candlestick chart used by various traders to signal reversal using 3 distinct candlesticks that signifies the following
•First bar-large and colored red, this candlestick is located within a defined downtrend.
•Second bar is called doji that gaps below the close of the 1st bar.
•The last bar is another large candlestick colored white, it opens above doji and it is used to show traders emotions.
Abandoned baby is a reliable type of candlestick chart because it helps traders determine the downtrend changes, however it is considered a rare one.
Evening star pattern- is considered as the bearish evening reversal pattern that is typically located at the top of an uptrend.
To confirm this pattern,
traders use other tools such as oscillators and trendiness.
This pattern is very useful in determining the changes in the current trend.
This has 3 characteristics:
•The first one is the large candle located at the top of uptrend.
•The middle evening star bar is small bar colored white or red.
•The last bar a larger bar that is colored red.
Price action trading is a good way to start forex trading.
It allows stress-free and a very logical and systematic way of understanding price action movements.