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Looking for the price action meaning? You’re in the right place. We’ll answer the question of ‘What is price action?’, so you can apply it to your online trades at CAPEX!
Price action is a way of looking at the price of a security over time. Price action trading relies purely on price as a way of determining whether a trade should be conducted. This is in contrast to relying on technical indicators.
Successful price action trading relies on you identifying key patterns in the price data. The reading of patterns such as breakouts and triangles is done to try and identify where the price of a security could be heading next. Price action trading could work on anything from commodities to stocks and most of the instruments featured at CAPEX, the best CFD online broker.
Price action trading is a flexible trading method and it doesn’t require a huge amount of research compared to some trading strategies. This means that you can simply analyze the price charts and ‘candlesticks’ to see where the price of an asset could be heading next.
While price action trading is subjective by nature, it is still something that can be tried by even those relatively new to online trading. Plus price action trading gets even easier when you try this strategy on a range of assets like stocks and commodities in the form of CFDs at our CAPEX online broker site. thanks to our world-class platforms.
Most people would have price action explained as being the way in which a security’s price changes over time. It’s a method by which traders use data for trading a range of assets from stocks to commodities and Forex pairings. Such a form of technical analysis focuses on how the price of a security has changed in the past to make future decisions about whether to buy or sell that security. Such a procedure is known as price action trading and it’s something that can successfully be done with our CFDs here at CAPEX.
Price action works in a different way from other trading methods. You won’t have to rely on specialist knowhow such as a moving average or Bollinger bands. Instead, you’ll be focusing on the raw price data and hoping to find some kind of order from within the chaos.
Price action trading is based on being able to spot the key patterns that identify when you should enter or exit your trade. You should be able to spot when a breakout is taking place as this means that the price of a security is starting to behave in different ways to what has occurred previously. This is the basis of price action trading as you’re ultimately trying to spot unusual patterns in the price data.
Candlestick charts, like the ones you can use at CAPEX, offer you a particularly strong way of identifying price trends. This is because you’ll be able to visualize the price movements through displays of the open, high, low and close values. Understanding what certain candlestick patterns mean such as the Harami cross and the three white soldiers are an excellent way of building expectations for where the value of a security is heading next.
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We can’t answer the question of ‘What is price action?’ without taking a look at some of the best price action strategies. The first thing that you can do is to try and get your price data as clearly presented as possible. This means removing most of the other kinds of technical data that can clog up your display. As a result, you should be left with the basic price bars of the chart and will be ready for when certain patterns emerge.
Above all, successful price action trading strategies will rely on you correctly identifying patterns and predicting where they could head next. The ascending triangle pattern has proven to be particularly useful as it can predict potential breakouts. This is because the pattern suggests that several efforts have been made to create a breakout and that the next major buying pattern could be more successful. Also, don’t forget that you can learn trading at the CAPEX Academy and test new strategies when trading with demo account, that we provide with all accounts at CAPEX.
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Now that we’ve identified the key features that answer the question of ‘What is price action?’, we can easily see why it’s such a popular trading method. After all, price action trading gives you a fast way to find better entries and exits compared to relying on technical indicators. It’s also true that this method of trading requires a fair amount less research time and it’s nicely flexible to be used in conjunction with other strategies.
We, at CAPEX, give you a simple way to put your price action trading into action. This is because we feature a range of detailed price charts that help you plot the real-time price changes and identify what breakouts or triangles there may be in the price data. All of which should give you a fast and simple way to find those entry and exit points that give you maximum value on your trades.
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We can’t answer the question of ‘What is price action?’ and not discuss some of the disadvantages of this trading method. The first thing that you should realize is that price action can be interpreted in multiple ways which means it shouldn’t be the only tool used for trading at CAPEX. One trade might see a pattern as being bullish, whereas another trader might see it as being part of a bearish trend.
Plus it’s a trading method that might require a fair amount of effort to pull off successfully, as you won’t be able to automate your trades for reading the price action patterns. But as long as you realize the fact that price action trading is just one tool at your disposal, you’ll find it to be a great way to guide your online trades.
We hope that we’ve successfully answered the question of ‘What is price action?’ You’ll see that it’s a powerful way of focusing your attention on the price of a security over time, and it does away with other technical indicators. As such, price action trading can be used in a flexible way to get better entries and exits than you’d get if you relied upon indicator-based trading. Plus it can be an excellent strategy to include alongside other online trading strategies.
While price action trading requires plenty of skill and is notoriously subjective, it offers you an excellent way of paring your trades down to the essentials. As such, this kind of trading is perfectly suited to trades on all of the CFDs featured at CAPEX. So now that you know the answer to the question of ‘What is price action?’, you just need to sign up and start price action trading.