Learning Price Action – The Key to Your Forex Trading Success
I wanted to start today by thanking each and every one of my loyal followers. Recently, this blog had it’s 3rd birthday (originally published back in July 2011). I wanted to thank all of you for your on-going comments, your emails and your feedback, and I want to make important mention to all of my members, without your support and commitment, none of this would have happened.
My passion for teaching and assisting Forex traders remains strong, I want to remind all of you, this is a life-long project, and I will be here for many many years to come. This website started from something small and has now grown to be one of the most popular Forex and trading education resources in the world, attracting more than 50,000 readers per month and growing strong. I want to personally thank all of you for your continued support and for sharing the content on this blog with your fellow aspiring traders. I ask all of you to keep reading, keep learning and keep sharing this with others. Enjoy today’s lesson….
The ability to read and make sense of the price dynamics that occur on a “naked” price chart everyday in the Forex market is a critical component of becoming a profitable trader. Price is the main variable involved in all financial markets, so it is a curious notion that so many trading strategies and systems floating around the internet seem to focus on everything BUT price.
Here at Learn To Trade The Market, I teach traders how to read the natural price action of a market, and this is a skill that is a prerequisite for developing yourself into a consistently profitable trader, no matter what trading strategy or system you ultimately end up using.
Price action trading helps you become confident in your trading ability
Learning to trade the market with price action strategies allows you to make use of the natural ebb and flow of the market in a way that is not confusing or secondary like trading with indicators or “Forex robots”. As a trader, you want to develop your chart reading skills so that you can confidently trade what you see, not what you think. When you learn how to read the price action of an uninhibited price chart you will develop this confidence because you know you are basing your trading decisions off the “core” data (price action) of the market, instead of a delayed and vague representation of price action. Traders who spend hours trying to interpret lagging indicators or who spend tons of money on over-hyped trading software, quickly find out that these approaches are simply well-marketed techniques that look pretty but are largely ineffective and more confusing than anything else.
Trading with price action gives you a solid foundation to build your overall trading strategy on, since you know what you are looking for and the method is not confusing or secondary you can quickly develop confidence in your trades. This is a key distinction between price action trading strategies and indicator-based methods, and it’s one of the reasons why trading with indicators destroys Forex trading success. Indicators and trading software make it really hard to become confident since you are always trying to figure out what the indicators are telling you (they often contradict one another), and you probably have no idea who or what is behind a piece of Forex trading software.
Knowledge of price action trading will ONLY make you a BETTER trader
Even if you don’t end up using price action as your primary trading strategy or system, an intimate knowledge of price action will make ANY other strategy or system much more effective for you. Learning price action can ONLY help you become a better trader, it can never hurt you like many other strategies and systems can by confusing you and clouding up your mind.
No matter what trading strategy or system you are currently using or end up using; knowing how to spot high-probability price action setups will make that strategy much more effective. Obviously, I prefer to trade off price action alone, and I teach my member’s how to trade off the same simple price action strategies that I use, but some of you will inevitably go on to incorporate other methods and techniques into your trading. This is fine, but just keep in mind that no matter what road you go down in the markets, obtaining a thorough and comprehensive price action trading education is only going to help you in understanding price movement and overall market mechanics.
Price action helps you develop your discretionary trading skills
If you want to sum up the difference between professional traders and amateur traders in once sentence, this is a good way to put it; “Professional traders know when to trade and when NOT to trade, while amateur traders clearly have not developed this skill yet”.
No matter what you read on the internet or elsewhere, developing your natural trading “intuition” or “gut” trading instinct is very important to your long-term trading success. This is the discretionary trading skill that is largely responsible for separating the winners from the losers. Price action helps you develop this trading instinct because learning to spot and trade high-probability price action setups allows you to recognize and anticipate market patterns and movements with a high degree of accuracy. This process of developing an effective “gut” trading feel sometimes takes many years for traders to develop, and in my opinion the best way to develop it as quickly as possible is by learning to trade with price action, it certainly has worked for me.
Learning how to trade with price action simplifies all aspects of trading
It’s very important that you have a strategy like price action which is simple to understand and implement, because this simplicity will make it much easier for you to adhere to your trading plan which will in turn keep you focused and on the track to Forex trading success.
Price action lends itself very well to a trader’s check list or Forex trading plan. Once you have mastered the price action strategies that I teach, you can very quickly conclude from your trading checklist or trading plan whether or not various elements of a high-probability price action setup are present and if the confluence requirements are met.
The simplicity that is an inherent part of price action trading also contributes to developing the type of calm and unemotional mindset that successful trading requires. By eliminating the element of messy and confusing indicators all over your charts you can greatly reduce the mental stress and frustration you experience every time you interact with the market. Having the correct Forex trading mindset is extremely important to developing into a consistently profitable trader, and price action can help eliminate emotional trading problems.
You NEED to understand price action!
In conclusion, every trader deals with price movement as they trade the market, no matter what market or what strategy they trade. So, if you truly want to become a profitable trader, you simply have to understand price dynamics and how price ebbs and flows and interacts with levels in the market, there is just no way around it. I am not saying that price action trading is the ONLY way to trade the market, but I AM saying that understanding price action and how to use it to your advantage IS necessary to become a profitable trader. I have personally found that pure price action trading is the best way for me to trade, and many of my member’s have as well. So, if you are looking to simplify your trading, and want an effective Forex trading strategy, or you just want a better understanding of price action in general, then you will benefit greatly from taking my trading course and joining my members’ community.
57 Comments Leave a Comment
Thanks, you are a blessing that come my way in forex trading jurnney
Thanks Mr Nial you’re the best ever forex trader mentor and I highly appreciate for information about trading strategy , I’m looking forward to learn .. Thank you
I saw a Webinar from someone who calls the Pin Bar as an an elephant candle, and a shakeout candle. The participants paid alot of oney to listen to him, and the explanation was not even as half as good as Nial’s.
Nial is giving us better information for FREE.
I am not a member of Nial’s team, yet, i am a living testimony of his treachings. My trading has been steady, all i need is more screen time.
great….really ur pin bar is very nice one problem to understand fake chart
Best instructor information I’ve read & I’ve read a lot. Keep up the good work Nial!!!
Thanks Nial n Happy 3rd birthday of yr blog.
Yr advise on using price action to trade successfully is great.
Thanks Nial,Wish I had your info before wasting much time & money on other bogus courses
Thanks Nial, may your days be long as some of us recognises you as a messiah of our time. keep it up
Hi,little bit late but i wish Nial centuries life time, all blessing , courage may return Nial for what he is providing to the public in free of charge.
Happy 3rd birthday to you :)
Congratulations and a happy 3rd anniversary!!! Keep up the good work.
Hi Nial, your really doing an excellent coaching, where its really gaining me a benefitail and sweet profit.
Hats of to you mate…
Congratulations. Wish you long term successful trading and teaching.
Happy 3rd anniversary for your/our blog Nial.You are doing a great job by teaching us to trade price action.I appreciate and highly value all that you are doing for us traders.May you go from strength to strength,God bless.
Thanks Nial. You make more sense than these blacboxes people.
this is wonderful,am gaining much keep it up and God bless.
The real success in Forex stays in price action set-ups around relevant horizontal levels……priceless info Nial !!!! Thanks a lot mate !!!
Go the Maroons !!!! ;-)
I am beginninng to see profits in my accounts.i wish i knew all these bout 4yrs ago………..i wld av bnn richer than warren buffet by now…uare the worlds best..pls let it keep coming.
Another good article Happy anniversary
Thanks for taking the time and effort to teach all of us how to trade FOREX and more importantly opening your trading toolbox for all of us to take advantage of!! MUCH APPRECIATED!
nice lessons and happy 3rd aniversary.. hope all of us become a successful traders.. thanks to master Nial =)
Hi Nial, Happy anniversary, Well i have been a student of yours now for about 1 year and a half and a full member for about 6 months and i must say my progress in learning to trade price action has been phenomenal, trading raw price with the daily charts has been for me the most accurate way to trade in the market,the daily charts seem to be the only time frame that can give you a clear insight in to price momentum, strength and potential reach, I also use the 15 minute charts for entry and exit of trades and most of all i use the usd index to give me a clear insight in to market direction and strength, I have found that raw price analysis of different time frames in the usd index can help you to make a more accurate decision on which currency to buy or sell at any given moment.
finally i just like to say, Thanks Nial for all your efforts, with out it, I would not be were i am today and i hope that this community that you have created will continue for many years to come…
Best regards, Seb..
Glad that your doing well Seb
Having looked at other methods of trading over the last 3-4 years, initially found your PA method of trading a challenge. As time has gone on & using only naked charts the pattern recognition becomes easier. Really starting to know what I am looking for now. Many thanks for the programme. Regards
Happy third anniversary. Wishing you many more successful years of trading, writing and sharing with others through your blog. Helpful stuff!!!
I’ve been a student of yours for several months now. I was previously taught to use small time frames and only trade the London Open ( 3AM for me ). I now understand how to see potential trades and use a “set and forget” trading strategy where I only have to check on my trade once or twice a day ( at my convenience ) and with much better results. Since going live, I have turned $130 into $822 in a few weeks, and this using very small lots. Thanks for your help, and I reccommend your course to anyone aspiring to be a sucessful forex ( or stock, commodity, ETF, etc… ) trader.
Absolutely true. After studying and following demo trades for a year and a half, I am only beginning to feel confident and demonstrate a level of consistency after going with price action and dumping the indicators. Thank you for helping to steer me in the right direction.
Happy anniversary to LTTTM, I agree that Price action in daily chart or longer chart is the most important thing to learn if we want to win as traders, because I’ve try to scalp with many indicators and robots and proved that none of that works, I was affraid to use daily chart because I tought that I have to use large stoploss would made me lost much if I lost, but now I now that scalping is the fastest way to blow my account. Thanks to you Nial…GBU.
Hi Nial, I like what you preach, I would like to see what you have to say about using range bars in trading as they seem to clean up a lot of noise on the charts.
Nial, I have been a member for a couple of months, reading everything I come by on your site. I try to only get into good set ups, but these days I’m really struggling finding anyone…. I only trade on the daily charts. Is it only me, or is the market consolidating without giving any real good set ups?
Another great lesson as usual,Happy third birthday and hope to have many more together!
I believe u, without the knowledge or understanding of price actions nothing could be achieved in forex trading. Thanks for put more light on it and happy 3rd yrs anniversary.
Thanks so much for yet another educative article.This is more than free content and now Im recommending all my friends who are learning forex to this site.Keep up that good heart to help others learn trading.
Firstly Happy birthday to the blog.
Thanks Guru. I fully confident on you and your teaching.
Happy 3rd Birthday to the blog.
Another top article helping me to LTTTM.
Cheers and thank you for doing all of this.
Yet again Nial you know when to put out an article about a topic I have been racking my brains to work out. It is as though you can sense what the current issues are and how to tackle them.
I’m only trading daily charts and getting my life back. Not sitting in front of the computer hours on end burning my eye balls.
You have are a one in a million mentor. Cannot thankyou enough.
Go QLD – although NSW has a strong origin team, NSW are due for a win.. ( i hope)
Great artical as always Nial. As I tell my friend, you’re a Real Genus!
Thanks Linonell, appreciate the comment.
Have a nice day Nial, thanx for your help!!!!
Thanks to Nial I now use price action, great.
Thank you Nial.Your teaching enables to track the natural movements of price behavior.Your lessons helped to shape my mind suitable for trading, technically as well as psychologically. Wish you the strength for this great service and happiness for entire life.
Thank you Manjula.
I am a member and a student of yours. I have turned into a full-time trader now following your guidances very closely.
I am slowly and surely building up my trading account through your courses, guidances and articles.
I look forward to meeting you one day
Jason, i am so pleased to learn that you are now full time trading, these kinds of messages make it ALL worth doing, it brings me great pleasure to see you doing well.
hi nial this is the first of your newsletters to grab my atttention.
everybody and his dog are trading off candles and a series of indicators or black box systems it seems but this just isnt for me.
i have been learning to trade price off a naked barchart with a simple MA.
i currently trade pa off fib pivots, s&r,round numbers and the 50 levels which make complete sense to me and i do this intraday.
the difficulty is learning to to recognise the setups, ie is the level failing or retracing, and i guess calling the right setups will come only with lots of observation
i have been looking at moving to the 1hr and 4hr t/fs to reduce the pc time but of course that will require larger stops and banks.
i wondered if you had any advice you could offer
Willy. Sounds like your still ‘over thinking it’ and ‘cluttering up the charts, and cluttering up your mind’. Drop everything, and go back to just the price action, naked charts.. and then start looking for the setups i teach my students. No need for all the other stuff you mentioned, at least for the moment, you need to remove the confusion.
Hi Nial! I admire, how nicely you are clarifying all aspects of trading in terms of price action. Everyday I find out that all you say is absolutely true. You are a great coach! Petr
Thanks Petr. glad to be of service.
Nial, in your commentaries on the market, you often refer to Fib levels and various MAs yet you talk about trading naked. I understand that confluence of price action signals and such indicators give a stronger entry/exit signal so why promote only trading naked and not price action with certain relevant indicators if indeed they are relevant?
Damian When i say naked., i am talking about reading the chart without all the clutter of magical indicators. I ALWAYS have at least one chart that is completely clean of all clutter. Then i MAY place a 50% level just to see if the price action signal did form at a retracement level .. this helps me find confluence. In terms of EMA’s, i may place these on the daily chart, and this helps me find ‘dynamic support/resistance’. The EMA is also called the “value point”.. again this would be on a seperate chart and used in trends.. it helps a trader find the fair value in the market and helps find confluence.
Your course , commentary and lessons have been a big help to me, my trading has improved out of sight. I am forever in debt to you. Everybody, listen to Nial and his teachings, his concepts are genuine and will help you.
Ben, i appreciate the feedback, I am happy to see my lessons are helping you. Enjoy :)
Nial, you are the best forex trading mentor I have seen, your lessons are simply amazing. Thanks , Bill
Thank you for you kind words Billy.