In each market there are many different trading methods. To argue that one method is better than another is very difficult and not worth it. The important thing is whether that method is profitable and suitable for you?

For myself, after learning and trying many different methods, the method I choose and like is Price Action.

What is Price Action?

Price Action is a price action trading method, meaning you will make trading decisions based on price charts (i.e. candlesticks). Therefore, you will not need to use lagging indicators, or follow past data. The analysis chart is very simple, without indicators.

This is the method chosen by many top Pro Traders because there is no need to pay much attention to the news, the indicator tells us all the market's actions on the chart.

In this article I will tell you the reasons I chose Price Action, maybe this will also be a suitable method for you.

Trade with minimalism

If you have read other articles on my blog, you know that I follow a minimalist lifestyle, so "making it simple" is what I always want.

Previously, when I first entered Forex, I was given a thought - Trader is something very stressful, complicated, scared, staying up at night with 3 or 4 computer screens with constantly jumping numbers. .

Are you thinking of a trader as something like this?

Therefore, in the first years of knowing Forex, I mainly researched how to use EA (Forex robot) because I thought it was suitable for me, did not need to invest a lot of time and still had money regularly. So I mostly only focus on searching for EAs and backtests, without much knowledge about technical analysis.

After that, I realized I needed to know technical analysis to run the robot better, so I gradually learned it and found it very interesting to love forex trading. But using indicators gives me quite a confusing experience because there are too many indicators to choose and combine. When used, the chart looks extremely confusing.

In addition, when trading with Indicators, there is a paradox: I think that combining many Indicators together will bring higher accuracy. Finally, the diagram is full of wires like Hanoi's power lines when there were no underground cables.

When this indicator reported buying, the other indicator reported not yet. When both reported buying, the order still had a loss, causing me to be confused in this tangle for a long time. When you make a profit or when you lose, you don't know the reason why.

Luckily, I found out later Price Action. Look at the extremely simple charts, including only candlestick charts, no indicators needed. I know that this is the right method for me!

Trade forex based on price action
This is the graph when trading according to your Price Action. Looks very simple, right?

Trade according to reality

If you learn about indicators, you will know that indicators are calculated based on formulas that take data from the past to use in the present. And data from the past is not always correct. Especially in markets with many continuous fluctuations such as Forex and Crypto.

During my time in forex for several years, I saw all sorts of fluctuations that had never existed before. Are you tired of hearing others say the USD dropped the most in the past year, Gold rose the highest of all time, the British Pound dropped the lowest in a decade,...

These news occur continuously in the market, this shows that the past does not determine the future, falling prices can continue to decrease, rising prices can continue to increase.

But with Price Action, you can identify the market through graphs and individual candles. Therefore, right now the tree will help us understand the market. The accuracy will be higher than using the past to know the present and future.

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Applicable to many markets

With Price Action, it doesn't matter which market you are investing in, as long as that market has a candlestick chart, you can apply it. Because all investor psychology, buying and selling actions, impact of news, price range,... are all shown on the chart.

Why should you trade with Price Action?
You can make money from any market with Price Action!

Unlike other methods that use indicators as the main method. You need to choose an indicator suitable for each different market and product.

You can apply to Forex, Crypto, Stocks, Gold, Oil, Indexes,... any product you want - as long as that product has a candlestick chart.

Applicable to many time frames.

Similar to the market, indicators will also be suitable for different time frames. You also need to set indicator parameters appropriate to the time frame you are trading. For example, RSI(14) or RSI(9),...EMA or many other indicators are still the same.

The video helps you better understand Price Action for which market and time frame?

But with Price Action, you still trade small time frames with the same method as larger time frames. However, if you do not have much experience, you should trade large time frames to have more time to think and analyze before entering an order.

Time frames larger than the chart will also be clearer and less crowded than 1-minute or 5-minute charts.

Understand the market, don't trade machines

If you have ever traded an indicator, you will see many methods like two EMA lines crossing each other and going down, if the candle crosses it then you sell. Or the price touches the lower band of the Bollinger Band to buy, etc. Those are mechanical ways of entering orders because you depend on the indicator.

On the other hand, just like the flow of life, after entering an order, the market does not always turn out as expected. If you don't understand Price Action, you can just enter orders according to the indicator and leave it at that.

But with Price Action, after entering an order you can see the market changing and can know to exit the order promptly to avoid losses. Price Action will help you stay flexible and truly understand the market.

Those are the reasons why I trade Price Action. And above all, it is a method that I find very suitable for myself. I don't want to argue that one method is better than the other. Let's learn more to see if Price Action is right for you or not!

Disadvantages of Price Action

I don't want you to misunderstand that in this article I am magically locking down a method that has no downsides. Every method has advantages and disadvantages and so does Price Action.

So what are the disadvantages of Price Action?

  • Takes a lot of time to practice: Unlike Price Action indicator methods that require a lot of practice time, backtesting to gain market sensitivity and faster analysis.
  • Subjective: Because Price Action is sensitive to the market, it will be subjective to the analyst. On the same chart, some people may find buying opportunities, while others may find selling opportunities.

After a long process of using Price Action, I see that the biggest barrier for people to approach this method is that it requires time to study, practice hard, and have to think a lot, not just sitting there watching trading videos and participating. The course is to improve yourself. So many people give up halfway and think it's ineffective.

How to learn Price Action?

Price Action is a method that is greatly influenced by your subjectivity and perspective. You need to separate what you think and what you see. With Price Action, trade what you see.

Currently, documents and videos online are mostly discrete instructions about each candlestick pattern and each model. This is very difficult for learners because Price Action is a method that requires general reasoning based on each specific case, so learning in such a discrete way is only theoretical and not highly practical.

For example: When learning about Pinbars you are taught that it is a sign of a reversal. So on the actual chart, how many times do you see a pinbar and the market continues to trend? In what cases do they "forget" to teach you that pinbars are effective? What was Momentum like then? What is the market structure like?…

The most effective learning method for Price Action, in my opinion, is to learn how to think about placing orders in specific cases to bring high practicality and learners can step by step apply the transactions themselves.

That is also how I share my Price Action trading method, my thinking when entering orders, and the mistakes you need to avoid.

You can watch videos on Youtube channel Medio – Trade For Freedom! where I share my experiences when trading with Price Action.

To practice Price Action, you need to watch these videos over and over again and backtest many times to make your knowledge and reflexes when reading candles your own, and record what you note when analyzing. That is the practice method that I have applied and it is highly effective.

When you watch it again and again each time you will understand a little more, continue to backtest and continue to watch again. That's how I learned Price Action.

The important thing is that you can create your own set of trading rules and keep yourself disciplined by that rule. Because any method always has the possibility of cases not following what you analyze, analysis only gives you a higher probability of winning but is never absolute.

How do you see Price Action? Comment to let me know!

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