Balaji As a trader,speculator and Investor- Balaji have more than a decade of experience trading commodities, stocks and Fixed income securities including as a senior trader with Vexes capital.He also mentors or teaches investors, traders about Financial markets and provide professional training for individuals combining Institutional experience with a technical grasp of seizing market opportunity. Since leaving the Vexes capital and Newyork city,Balaji has been working as Trading coach along with presenting seminars and writing for a number of publications.

Chasing Profits with Price Action Trading

2 min read

The concept of price action trading embodies the analysis of basic price movement as a methodology for financial speculation, as used by many retail traders and often institutionally where algorithmic trading is not employed. Since it ignores the fundamental factors of a security and looks primarily at the security’s price history — although sometimes it considers values derived from that price history — it is a form of technical analysis. What differentiates it from most forms of technical analysis is that its main focus is the relation of a security’s current price to its past prices as opposed to values derived from that price history. This past history includes swing highs and swing lows, trend lines, and support and resistance levels.

Defining Price Action
Price action is simply how prices change – the action of price. It is readily observed in markets where liquidity and price volatility are highest, but anything that is bought or sold freely in a market will demonstrate price action. Price action trading can be included under the umbrella of technical analysis but is covered here in a separate article because it incorporates the behavioral analysis of market participants as a crowd from evidence displayed in price movement itself

Let us Bring in the chart to get a clear cut picture
H1N1

 
By Looking at the chart above a skillful price action trader can easily come to an conclusion that prices will be moving upside at the edge of the expansion.
Price action is a wonderful technique for an average market player and also very flexible regardless of the trading environment whether it is range or Trend

Talking about profit potential, Normal Price action trader can capture an estimated 50-500 Points! depending on the time frame with strict money management techniques

H2N2

With the above example, In such a situation Average price action trader would have captured 11-12% returns!
Being a Price action trader myself, I can say it helps me to make a living by the Markets without any other additional tools

In simple terms, price action is a trading technique that allows a trader to read the market and make trading decisions based on the actual price movement on the chart, rather than relying on lagging indicators. Most indicators are derived from the actual prices on the chart, so they are in fact, giving them information on past price movements.It is also very technical and deals with reading price history. Most traders think they know everything there is to know about support and resistance already, but the truth is that reading price history isn’t as easy as most people think.There’s a lot more that goes into understanding a chart than just drawing some basic support and resistance lines. A price action trader goes that extra step further to look for the explanation about not just what is happening now, but why it happens, so that they can make good decisions in the future. This also enables the trader to read price history and make better analytical decisions in present and future trades.

No two people will analyze every bit of price action the same way, and that is why a lot of traders find the concept of price action so difficult to master. Quite literally, price action is everything that a security’s price does, and just like every other facet of analysis, it is purely subjective.

Balaji As a trader,speculator and Investor- Balaji have more than a decade of experience trading commodities, stocks and Fixed income securities including as a senior trader with Vexes capital.He also mentors or teaches investors, traders about Financial markets and provide professional training for individuals combining Institutional experience with a technical grasp of seizing market opportunity. Since leaving the Vexes capital and Newyork city,Balaji has been working as Trading coach along with presenting seminars and writing for a number of publications.

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5 Replies to “Chasing Profits with Price Action Trading”

  1. Got a one liner for your technique,
    Price action trading is the art of looking at individual candles to determine the probable direction of a stock – without using any technical indicators

  2. Hi Balaji,
    Crude below 70 will ECB now treat it as stimulus and delay QE. How fall in crude affect ECB QE plans?

  3. Dear Mr. Balaji,

    Inspite of writing to you, no replies are recd. for courses. I wish, some promptness. Thanking You,

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