Understanding price action analysis is important. It is a movement of an asset’s price or currency pair. The analysis of this thing refers to the technical one based on the movement in the past where traders tried to find a pattern. 

That trading style is looked so simple. That is why; it becomes really popular among the traders. This analysis only uses horizontal lines, diagonal, or maybe vertical ones. None of the technical indicators is used for this case.

It will be a little bit weird for you who are not used to it. There are so many colors in this analysis. However, in a forex trading world, it is a fact that there is a method which is not using any technical indicator at all.

Usually, that is called naked trading. In a price action analysis itself, there are several main components that you need to know. These aspects will make everything is better and easier to do as well. Below are those components.

The Global Market Reaction

The meaning of this component is the condition of a global market after having a price increase in a trend. A trader could find out about that situation. You can accept, confirm, or vice versa (cancel the chart movement). 

It may be a little bit difficult and confusing for a beginner to do this component. If that thing happened to you, then do an identification process first. Do that at a certain level by using the candlestick analysis. There is a reason for it.

That analysis is easier to understand even for a beginner. The data is also clearer than any other type’s methods available at the present time. Learn about this market reaction first to do a better price action analysis in the future.

Support and Resistance

Besides the market reaction, you must pay attention to the support and resistance component. There are several important aspects that can be used as a base. That is especially about the levels of price movements, resistance, or seller’s offer.

It is also about the support that becomes the starting line that the sellers have. If you see it for a while, price action analysis uses a focus on the candlestick. That is why; sometimes it could be so complicated. The key is experience.

As a trader, don’t give up to practice. As time goes by, with more experience, you will be sensitive even to the small price change. Just try to be discipline at any time to learn and understand forex trading.

It is the key for all traders, even for a professional. It is because a successful career cannot be gotten instantly. You must work hard and don’t be afraid of any bad things. However, make sure to always have a clear plan.

Understanding the Price action analysis with Candlestick

It was said before that the candlestick pattern is one of the implementations of price action trading. To do so, you need to understand the morning star pattern as a buying strategy. Morning star is created from three charts of the candlestick. 

Usually, traders will use aggressive or conservative strategies to implement it. The aggressive one is when you can open the ‘buy’ position right after the third candlestick closed. Stop loss is located under the low second candlestick price. 

Don’t forget to practice it with the best forex broker. It is important since that kind of broker is always equipped with the best features and facilities. The examples are the flexible time to trades, great signal, and many more.

Didimax is one of the best brokers nowadays. It has a lot of beneficial features to support a forex trading activity. With the small capital, it is suitable even for a beginner. Take this chance and join Didimax forex broker from now.