In this blog, I review my thoughts and ideas about forex price action to better learn and understand the market. I am documenting my ideas here so that I can see it outside of myself and hopefully learn from it.
Understanding Price Levels
When I first learned of and then about price action trading, I thought it was the most sensible approach to understanding the market. I immediately liked the concept. From price action I learned about Auction Market Theory (AMT) and this further explained the how and why of price action.
This is my simple blog to help me articulate and organize my thoughts. It’s a place for me to “think out loud,” to grow and develop good trading habits and knowledge. The ideas here are not trading advice but only serve to help me prepare to trade; doing my homework through post market analysis and pre-market preparation is the purpose of this blog.
“Everything I learn and write here does not mean anything unless I practice it and do it live”
Ideas discussed here (throughout this entire website) are not trade recommendation they are only my thoughts to help me understand the market and price action better. Forex trading is very risky and can involve a lot of loss. Any opinions, news, research, analyses, prices, or other information provided here is provided as general market commentary, and does not constitute investment advice, directly or indirectly. I do not and will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information and ideas discussed through out the website.
My trading analysis is through a technical break down of price action. From the charts, I begin with a very simple concept of drawing horizontal lines at both extreme and other obvious turning points. These levels can be called support and resistance zones or supply and demand points. I call these lines structure level. If price is above, it serves as support. When price is below, it serves as resistance.
In addition to support and resistance levels, I draw Fibonacci retracement and expansion points then look for where the levels align with each other. For Fibonacci retracements, I mostly use .618 and .382 points. For Fibonacci expansion, I use the 1.414, 1.272 and 1.618 levels.
I further look for AB and CD moves. The AB=CD moves work well with identifying where the higher highs/higher lows, and lower lows/lower highs are.
Everything I learn and write here does not mean anything unless I practice it and do it live.
I don’t know what the market or price will do. I just try to follow it with high probability low risk entries.
Since I do not know what the market or price will do with certainty, I must therefore trade with the appropriate lot sizing, with well place stop levels, and realistic limit levels. All while managing the trade accordingly.
Trying to analyze fundamental analysis is highly complex with thousand of moving variables and too many conflicting views and conclusions drawn from it. However, reading price levels can be less complex and price cannot lie. There is only one price and it is the result of all thoughts and views.
The price printed on the charts is the price-just be patient, remain focus, and always be discipline.
In addition to the basic above I will use a couple of indicators as confirmation of trend or move strength. They are the 21 EMA, the 8 / 21 EMA combo, the 100 / 200 EMA combo, Ichimoku, and RSI. Using the 8/21 or 100/200 EMA combo is especially useful when going immediate term counter trend at fib extension or inversion levels.