Price Action Intro
Most of the traders are not capable to setup a proper technical analysis. Vast majority of traders don’t know the basics of price action, they can’t properly read the info off the chart and they keep using served strategies without knowing their background.
Most of these traders find themselves lost after the few negative trades. Being incapable to find the problem
in their strategy, they grow it into a long-term issue while the actual problem is within themselves.
They do not understand the price action.
The basis of every successful Day trading strategy is good knowledge of daily price action. Your goal is to read the most important price info off the charts. This rule is the same for the other trading strategies including swing and position trading strategies.
I am talking about advanced technical analysis that can be applied to any trading style.
The basic info on daily price action is daily open, high and low.
Daily open is the price at which market opened.
High is the highest point that price reached during the day.
Low is the lowest point that price reached during the day.
You can find out the most important bit of information by examining daily open price.
According to daily open price, you can easily predict the trend direction for the rest of the day (downtrend, uptrend or sideway).
High and Low daily prices for a present day are not much of the help. You can’t know this info before the day is done, but what you can do is to look at the high-low from previous day. This way you can gain additional information about the price.
Since daily open price plays the most important role in technical analysis, thus the future price action, I am going to talk about it the most in the following part of the course.