In today forex faq, I will be discussing with you guys a very interesting question by one of our fellow traders.
Below is the question:
Can you show me how to trade off the charts using price action only. That is without the use of indicators like MA, macd, Rsi, stochs etc. Would greatly appreciate that.
In fact, I have came upon a book that teaches people how to trade forex without indicator which is simply with the help of price action only.
As most indicators are lagging in nature, there are some traders who prefer to trade without any indicator on their charts. Some of you may be wondering how is that possible? Some of you are already losing even with the help of indicators and will it be worse if you trade with them.
Before I get into the detail of this question, I will like to explain to you what exactly is price action.
Price action refers to the candlestick that we see on our chart. One good thing about price action is that it is a leading indicator. With the price action, we are able to tell whether the market is reversing or not. For example, we can keep a lookout for reversal candlestick patterns like the head and shoulder, double top etc.
We can keep a lookout for flag or triangle to trade the continuation of a trend as these patterns are continuation candlestick patterns.
Besides those candlestick patterns which is leading in nature, we can also identify major support and resistance area where the market is likely to have some reaction. If you are trading without any indicator, you can make use of the support or resistance as places to enter or exit your trading position.
Personally I am trading with price action as well as indicators and therefore I am unable to provide you with more insight on how to trade without any indicators.