Price action is among the most popular trading concepts and a trader who knows how to use price action the right way can often improve his performance and his way of looking at charts significantly. However, there are still a lot of misunderstandings and half-truths circulating that confuse traders and set them up for failure. In this article we explore the 8 most important price action secrets and share the best price action tips.
#1 Support and resistance zones are better than levels
Support and resistance is probably the most popular price action concept, but only very few traders can actually make money with it. The reason is often very simple, although it’s not as obvious at first glance.
Most traders just use single, horizontal lines when it comes to trading support and resistance which look great in hindsight but fail during live trading. The reason is that singles lines are no effective way of looking at price movements – rcreating support and resistance zones is much more effective when it comes to understanding price.
The screenshot below shows it nicely: the trader who just uses a single line either misses trading opportunities when price does not reach his lines or he gets thrown out during volatility spikes; the trader who uses zones instead can filter out the noise that exists in the zones………..Read full Story