What Makes Good Price Action LevelsMar 30, 2023
Price Action is at the forefront of most Traders Mind when they enter the markets daily.
That's because its the only real way to read exactly where buyers are buying and sellers are selling. Reading between the lines is what profitable trading is all about and learning to do so is a skill in itself. You'll always need to know where profitable traders are buying and selling to create a sustainable and profitable Trading plan long term.
Price action zones really are most beneficial to us when they contain the most data about what has happened in that specific area of price. The more reactive, often the better because we can gather more evidence before making our decision on both entry in and exits out of the markets. This gathering of information is what constructs a better decision making process based on facts and logic rather than thought based / fictional decisions.
Price action is ruled exactly by that; Facts. These facts are presented by candles in the form of wicks as they often extend and retrace fro areas that should really be notable to us. The painting of these candles creates a story of buyers and sellers and the war they wage, with of course who is winning. The rejected of a price area shows you that traders moved out of it and may be likely to do so again.
The other aspect of Price Action which can aid your entries is strong candles moving from different areas. If you can see a price area had strong buying activity before, it makes it inherently more likely that it may happen again, because its a preferred area and shows strong impetus in one direction. This happens time and time again across various different assets in the trading world and is perhaps the most simple way of viewing a preferable price for traders.
You can use Price action for exits out of the markets as well as entries in it. Using the information that is shown for entries we can make better judgements for exits. That's because the information that helped us get in, can also help us get out of the market. Price Rejection that happened before in the opposite direction tends to become relevant just as much when you are on the other side of the market. In other words, buy zones become sell zones and sell zones become buy zones.
All of these rules put together form an precise and accurate strategy, like we have in the academy.
Founder Of WillOfTheTrader Academy