The forex market gives rise to some pretty amazing trends. Employing a method that will allow you to take advantage of these powerful directional price movements will give you an immense profit making opportunity. Price action analysis is one of the most accurate and thus profitable ways to trade strongly trending forex price movements. After learning a few solid price action setups you will easily be able to spot a trending market and jump on board with it. Trend trading is generally hailed as the most reliable and easiest way to make money in any financial market. There is usually always a trending currency pair to be found in the forex market, this means you have essentially unlimited opportunities to profit from trend trading.
Price action trading with the dominant trend in a forex currency pair is probably one of the easiest ways to become a full time speculator. The key factor lies in finding a handful of solid, time tested, price action setups and spotting their formation and then executing the trade. Price action trading is not a new concept. There are many mentors teaching it on the web, some obviously better than others. The first step in becoming a proficient forex trend trader via price action analysis is by finding a worthy price action mentor. Once you find someone that you trust who seems like they actually are an experienced trader using the same methods that they teach then you are on the right path.
The old saying “the trend is your friend” is an old saying for an important reason; generally it is a true statement. While this statement is true it is also very general and vague and does not really tell you how to safely get aboard a strongly trending market without buying the top right before a correction or selling the bottom. Ideally as a forex trend trader you want to sell strength in a falling market and buy weakness in a rising market. There are specific and regularly repeating price action patters that often occur at perfectly opportune times for getting aboard a strong trend. In fact, more often than not market corrections conclude with a strong price action signal before resuming the dominant trend, givinh you a visual signal that is safe to get back into the trend.
If that were not enough than price action setups can also be used to exit a trade. Just like when a market is finished correcting, after making a strong movement with the dominant trend there will often be a visually recognizable price action setup telling you its time to take profits or tighten up your stop loss. The great thing about using price action to trade trending currency pairs in forex is that it can be used to build your entire trading plan around. Lagging indicators don’t even come close to being as accurate as trading off pure price action movement. Actually, using indicators to get into trends can often lead traders to buy near tops or sell near bottoms. The popular moving average crossover technique is a good example of this. Also, indicators such as stochastics or MACD will often give false readings in a strongly trending market; telling you a market is over bought or over sold when in reality it is just in the middle of a strong directional movement. There is no better or more accurate way to trade strong trends in forex than by learning to trade using price action analysis.
Nial Fuller is a Respected Trader and Forex Coach. He runs a Forex Training and Education Website, Visit his site here Forex Trading Education