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Nial Fuller

NIAL FULLER
Professional Trader, Author & Trading Coach

Clean Up Your Forex Trading With Price Action

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By in Forex Trading Articles Last updated on | 19 Comments

The Forex market has its own language. This language takes the form of price movement. In order to understand and “speak” the language of the market you must learn how to read the price action that occurs on a clean, indicator-free, price chart.

Everything that happens in a market is ultimately reflected via price on a price chart. So, when you learn to interpret and trade price action, you are simultaneously interpreting and making sense out of all the global economic variables that can affect a market. Where many traders go wrong is in assuming that they will be able to read the market more effectively by trying to interpret news, indicators and (or) trading software. This is analogous to believing that you will have an easier time driving down the road on a dark foggy night than you will on a clear sunny day. Allow me to explain…

• Forget About Forex Trading Robots and Trading Software

One of the main problems with all the Forex trading “robots” and other trading software on the internet today is that they do not possess the human traits that can literally make or break you in the market. Robots and trading software are futile because they cannot develop a savvy trading sense and an “eye” for the market. Identifying Forex market bias and picking your trades wisely is a key component to what makes a trader successful over the long-term. Our current level of technology simply cannot produce a trading robot that has the ability that a human being can obtain to analyze and trade the market.

Furthermore, the claim of trading software designers that their products eliminate the problem of human emotion and discipline is entirely false. There is still a human behind any trading program, that human still must be disciplined enough to not over-ride the program or “meddle” with it. If you can’t follow a Forex trading plan that you design, you won’t be able to follow a piece of trading software either. So, it appears as though the main variable in trading success is the particular human doing the trading, not having the “best” and fanciest sounding trading system.

In the question of which is better; the human mind or computers in Forex trading? , the clear winner is the human mind, however, it must be developed and trained properly first. So much of trading success is a result of personal development; you are very unlikely to see some out-of-control unorganized slob become a consistently profitable trader. Very often people who have a knack for discipline and organization are good traders.

• Ditch The Indicators and The Mess

MessyDesk28Indicators are derivations of price action, so why not just learn to read the price action? Why would you purposely make trading harder than it already is? By putting messy indicators all over their charts that’s exactly what many traders do; they are simply making the natural price action clues harder to interpret. Indicators give no advantage, and in fact they actually just confuse and frustrate you by making the “real” picture of the market harder to decipher. Each indicator that you put on your chart basically just separates you further from the real story of the market.

You don’t want to purposely create a mess all over you charts by over-laying a bunch of indicators that are simply telling you what the raw price action is telling you but in a more confusing format. Just like having a clean work-space is important to success in any field, having a clean chart (and a clean office) is critical to Forex trading success. (Don’t end up like this guy…..)

Traders have a tendency to get excited about new indicators; they think that an indicator will somehow show them the market from a more advantageous perspective or that it will somehow give them “perfect” entry and exit strategies that will take the guess-work out of trading. I am here to tell you that successful trading is about developing your ability to analyze price, maintain discipline, and generally just control yourself in the market. Nothing else. Don’t let fancy sounding and looking indicator-based systems fool you. I was fooled by them early-on in my career, they did not help me achieve success in the markets, learning to read price action did. Trading with indicators will destroy Forex trading success.

• News Trading Is Unnecessary

newsThere is nothing inherently wrong with getting yourself up to speed on current Forex market news and other global economic events. However, many traders take it too far and end up trying to trade off THEIR interpretation of what MIGHT happen based on some news event that has either just happened or is about to be released.

The problem with this line of thinking is that price movement is fueled largely on human emotion or feeling about what is most likely to happen, not necessarily on logic. In other words, traders trade their beliefs about a market, and when an economic news release is pending, traders tend to trade based on their expectations of how the news will affect the market. So, once the news ACTUALLY comes out, the expectations have changed, and traders now have nothing to “bet on” in the near term. This is why price will often move the opposite direction from what is implied by a particular economic news release.

Good news! The good news is that price action strategies form as a result of people trading their expectations and beliefs about a market. So, by simply learning to trade these price action strategies we can forget about over-analyzing and interpreting the vast amount of news events that occur each day in the market. Think of price action as the final result of a catalyst that causes a market to move. Whatever the catalyst (news event) is, it will eventually be filtered through either a human brain or a computer trading program, and both of these will make their mark on a plain-vanilla price chart. By learning to read these “marks”, we are getting the most accurate and relevant “picture” of the aggregate belief structure of all market participants. Meaning, learning to trade based off simple price action trading setups is the most efficient, effective, and easiest way to trade.

• Learning Price Action Is Key

key_to_successIf you truly want to clean up your trading and turn it around, you need to clean up your charts. Every other system is just a derivative of price anyways; robots / indicator systems, they are all built from price. Learning price action is the key to your Forex trading success.

Price action aids you in developing the best mindset for trading. We need a clear and confident mindset, learning to trade off price action does not cause the amount of confusion that other trading systems or strategies can. When you trade off an unencumbered price chart you are seeing the clearest and most accurate picture of the market possible. Once you learn to interpret and identify a handful of high-probability price action setups you can effectively trade without indicators or other messy distractions on your charts. Doing this is the easiest thing you can do right now to greatly increase your chances of success as a Forex trader.

About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 20,000+ students since 2008. Checkout Nial's Professional Forex Course here.
  1. Ahiwe Emmanuel December 16, 2012 at 7:18 am

    i use price action and i combine it with trending and i use support and resistant levels to determine trend reversals,gush it so cool.

    Reply
  2. Azim January 10, 2012 at 10:41 am

    I found technical indicators helpful, but not all indicators are bad its all about how you use them and how many you use 1 or 2 is standard but Price action is king.

    Reply
  3. eric July 1, 2011 at 2:52 am

    I’m totally agree, too many indicators is suck !!! price action strategies is a simple plain method

    Reply
  4. Steve20555 June 27, 2011 at 9:54 pm

    Thanks for the lesson Nial, what I like about what you teach is its so clear, and is helping me loads.

    Thanks

    Steve

    Reply
  5. Shyam Thapa June 16, 2011 at 2:57 am

    Why price action set ups do not work for day trading ?
    As you mentioned in your interview video that you never day trade.

    Reply
  6. Manjula June 15, 2011 at 1:06 pm

    One of the best articles Nial.Price actions Analysis is the science of understanding the way of market motion. Thank you

    Reply
  7. andrew June 15, 2011 at 6:43 am

    thanks for the lesson

    Reply
  8. Andi June 13, 2011 at 11:18 am

    God Bless You

    Reply
  9. acr June 13, 2011 at 4:54 am

    hi, I started with a bunch of technical indicators and had only trouble. when I joined your community, looking to a chart without anything except price was strange and I had some resistance to accept this method. today I can’t imagine myself going back to indicators. clean charts and price action made the turning point in my trading.

    thanks a lot,
    acr

    Reply
  10. xback June 12, 2011 at 12:00 am

    no more ‘robot’..i’m fail!

    Reply
  11. Rayych June 11, 2011 at 8:40 pm

    Hi Nial

    I’ve just wanted to give you another hint about your lessons overall and specifically its quality, and that might be the adjective great, and i am silently pleased with it.
    the system, no the way of thinking that you positively- spiritually advertise is a way that works out.
    Actually the only way, i’ve found and coherently works.

    Reply
  12. ironn June 10, 2011 at 10:34 pm

    You’re right to make serious money in the market you must master PRICE! Great lesson my fiend!

    Reply
  13. hertanto June 10, 2011 at 10:23 pm

    Great lesson Nial as always…I believe there is nothing better than price action in trading forex because all the big players use price action too, but sometimes it’s so hard to discipline ourself, . I’m a big fan of you, I believe you already have a great reputation

    Reply
  14. Eudes June 10, 2011 at 10:09 pm

    Great Nial. Thank you for more this lesson. Regards.

    Reply
  15. Gurpal June 10, 2011 at 9:08 pm

    Hi Nial,

    Hope you are well. Another terrific and clear lesson.

    Thank you for all your help

    Thanks and Regards

    Gurpal

    Reply
  16. Phil June 10, 2011 at 8:16 pm

    I agree forget trying find a robot. While institutional traders are getting more and more involved with robots that trend will eventually end. If there really was some robot that could make 70 to 100 per cent accurate trades it would out sell Microsoft Windows many times over and of course you see there is no such software being offered making those claims. Robots do not work.

    Reply
  17. Andrew June 10, 2011 at 8:02 pm

    Hi,
    I love price action million thank to Nial Fuller but one thing you never mention is that the direction of price move either up or down after the current candlestick close

    I need explaining the moving price

    Thank

    Reply
  18. Michal June 10, 2011 at 7:56 pm

    That is the essence of forex trading!

    Very Thanks Nial!

    Reply
  19. ahmed June 10, 2011 at 6:26 pm

    cool boss

    Reply

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