We could definitely say that the price action is the core concept of foreign exchange market i.e. Forex. But not only Forex all the other financial businesses’ key factor is the price. The price has the ability to decide the market movements easily and simply. Though for the traders it can be hard and complicated if they don’t learn Forex price action trading perfectly. Actually, what is price action? It is a movement of a security’s price to be more specific we could say price action is used in the technical charts in order to analyze the random price movements. There are many ways that a trader could apply price actions in the Forex trading and one of it is using price action strategies. Let us discuss few price action strategies briefly.
Figure: It shows the price action strategies
Inside bar strategy
Two bar price action strategy is called inside bar strategy, which the high is lower than the previous bar’s high and the low is higher than the previous bar’s low. The respective position can be the top, middle or the bottom of the bar, before the inside bar. The bar before the inside bar is also called as the ‘mother bar’ in short ‘mb’. Anyways, if you spot two bars with same high and low then most of the traders do not consider it as an inside bar.
Inside pin bar combo strategy
There are two factors you should consider in inside pin bar combo strategy such as it consists of a pin bar that takes up a small inside bar of the pin bar’s body and the inside bar combo means the pin bar plus the inside bar. If you spot a pin bar along with an inside bar that contains within the high-to-low range of the pin bar then that is the combo strategy.
Failed pin bar
The difference between the pin bar and the failed pin bar is determined by the price movement. The potential for a fake pin bar can be lesser than the pin bar, but still, the traders will be able to trade fake pin bars if they are able to identify which fake pin bars might be favorable to them.
Pin bar reversal setup
The pin bar usually shows the reversal market, so they are the best tool for predicting the market and the price movement. The longer tail on a pin bar depicts significant reversal and rejection of the price. To learn price action strategies completely, you must practice in the market.
Pin bar continuation set up
This is quite similar to reversal pin bar in price action trading, the traders look for the good pin bar to appear in the existing trend that is what happens in the pin bar continuation setup. This strategy can be used to trade at lower risks and it’s effective.
The price actions are one of the best trading techniques because it helps the trader by giving the most accurate information. The price actions lead the traders to the correct path by helping them to make trading decisions using the past information. You may wonder ‘how can traders rely on past information?’ yes, they can rely on the past information because it enables them to understand the movement of prices in the short term in price action trading. If you are able to trade Forex using price action strategies, then we can assure your success.