WHAT IS PRICE ACTION?
This is the basic definition of price action trading:
When traders make trading decisions based on repeated price patterns that once formed, they indicate to the trader what direction the market is most likely to move.
Price action trading uses tools like charts patterns, candlestick patterns, trendlines, price bands, market swing structure like upswings and downswings, support and resistance levels, consolidations, Fibonacci retracement levels, pivots etc.
Generally, price action traders tend to ignore the fundamental analysis-the underlying factor that moves the markets.
Why? Because they believe everything is already discounted for in the market price.
But there’s one thing I believe you should not ignore: major economic news announcements like the Interest Rate decisions, Non-Farm Payroll, FOMC etc.
From my own experience and from what I’ve seen, I say this “the release of economic news can be both a friend and an enemy for your trades.”
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