Price Action is a simple way of technical analysis and can be accomplished without indicators. Patterns and prices are straightforward methods. Thus, its accuracy is undoubted.
But for some people, it is a difficult thing to read Price Action. That is why, the secret of Price Action has become one of the most interesting learning topics to learn. Here are 6 strategies for successful price action based on the balance.
1. Outside Bar at Support or Resistance
For those who unfamiliar with outdoor bars, for example is when rising outdoor bar happend; today’s low exceeds the previous day’s low, but the stock rallies and closes above the previous day’s high.
A bearish example of this condition is the same setup, yet opposite price action. Hence, it is not just about finding candlesticks and placing a trade.
2. Spring at Support
Spring is when stocks test their lows, only to quickly return to the trading zone and start a new trend. Springs, shocks and tests usually occur late in trading ranges and allow the market and its dominant players to carry out a definite test of the available supply before the markup campaign opens.
it is better to like to use volume when confirms spring. However, the focus of this article is to explore price action strategies, so we will consider candlesticks.
One common interpretation of springs is that traders wait for the lowest price to break out. Just to be clear, spring can occur if the stock comes within 1% to 2% of the low price.
3. Inside Bars after the Breakout
The inside is when you have multiple candlesticks gathering together as price action starts to wrap around resistance or support. Candlesticks will enter into the highs and lows of this new swing point as dominant traders press the stock to accumulate more shares.
Another inside benefit is giving you a clean set of bars to place your stops on. This way you do not base your stops on one indicator or the low of one candlestick.
Read Also: Pros and Cons of Offshore Forex Trading
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