Price Action Trading System?
What is a Price Action Trading System?
Price Action is a system that is a logical system and has clear rules in place. Instead of using indicators that cannot adapt to different types of markets, price action involves the trader making trades based of key signals forming in the market.
Traders have been using price action in different markets for literally hundreds of years to trade with. The same just cannot be said for other flash in the pan methods. Price action trading is a logical trading method that has been around for a long time and will continue to be around for a long time to come.
How Can You Use Price Action to Consistently Profit?
Price Action traders are using the information gained from the price action chart to make their trading decisions. Price action traders have key signals they are looking to present in the market for them to make a trade.
Price action traders are using information they can see in the price such as:
- Is there a price extreme?
- Is price at or near a low or an high?
- Does the options have high implied volatility?
As most of the big trading firms knows that the price of the stock is not predictable. You have 50% chance that the stock is higher than yesterday. Therefore we trade stock options.