Tue. Oct 26th, 2021

In my previous post …

I said that if you want to be an always profitable trader, you should avoid indicators, news and opinions.

Now ask yourself:

“So what should I focus on?”

Price action.

I’ll tell you …

Price stock trading is a methodology that is based on historical prices (open, high, low and closed) to help you make better trading decisions.

Unlike indicators, fundamentals or algorithms … price action tells you what the market is doing and not what you think it should do.

But first, let’s dispel the biggest myths about stock price trading …

Myth no. 1: Price stock trading does not work on stocks or cryptocurrencies

The term price action is popularized by forex traders.

So it’s no surprise that stock traders (or even cryptocurrencies) think it won’t work for them.

But don’t be fooled.

Price action trading can work in different markets.

Here’s why …

Price action trading takes into account the historical movement of prices and then uses it to make an informed trading decision.

Tan…

If a market has an upward trend, a price action trader may look for buying opportunities.

Here is an example:

As you can see, THC has produced a number of higher highs and lows, so it is on an uptrend.

As a price action trader, this is a market condition in which you want to look for buying opportunities so that you can trade on the path of least resistance.

Now …

If the market has a downward trend, a price action trader may look for selling opportunities.

Here is an example:

Bitcoin (daily time frame)

As you can see, Bitcoin is on a downward trend.

Therefore, if you want to put the odds in your favor, you should look for sales opportunities.

And finally…

If the market is within reach, then a price action trader can try to buy with support and sell with resistance.

EUR / GBP (8-hour time frame)

As you can see, EUR / GBP is in a range market.

Therefore, in this market state, you can buy low and sell high using tools like support and resistance.

The best part?

Price share trading can be applied in different time periods.

Previously, you saw graphs for the daily period, the 8-hour period, and the 4-hour period.

Now we continue and destroy the next myth of price action …

Myth no. 2: You need to pay attention to the key news

I wish news trading was as easy as …

  • Good news = buy
  • Bad news = sell

Unfortunately, this is not the case.

Because the market can go up with bad news and fall into good news.

Let me repeat it one more time.

The market can rise with bad news and go down with good news.

Here you have an example …

During the 2016 presidential election, many thought that if Donald Trump won the election, it would be bad for the country.

This is because he has no experience in politics, does not know what he is doing and is more emotional than logical.

But guess what?

He won the 2016 presidential election.

On the day the election results came out, the US stock market fell 100 points in a matter of minutes, as most experts predicted.

Interestingly …

In the next few hours, the market recovered from these losses and closed higher, and over the next few days the market reached an all-time high.

That’s what I mean …

S&P 500 (Daily Timeframe): presidential election

Now the question is …

How do you “predict” the market reaction to the news?

Well, the secret is this:

Just follow the price.

This is because if the market is on an uptrend, it is likely to continue higher.

So if you want to predict what the market will do, predict that it will increase (and vice versa).

When you look at the market this way, the press release no longer matters.

Because?

This is because the market usually makes its way before the news.

Here you have an example …

European Central Bank interest rate cuts

On September 4, the European Central Bank cut interest rates to combat low inflation, which is bearish for the euro.

But if we look at the chart above, the EUR / USD has been on a downward trend for a few months ahead of the press release.

Therefore, depending on the market price action, you can predict that the news will be bearish for the euro, even before it comes out.

But don’t take my word for it.

Study a trend market (over a period of time daily or higher) and pay attention to how the news affects the price.

Does price lead to news or does news lead to price?

Myth no. 3: You need to watch the markets all day

You might think you have to watch the markets all day …

To keep up to date with the news and analyze all the candles on the chart.

But the truth is no.

Here’s why …

The price is news

As you saw earlier, you don’t need to follow the news if you follow the price.

This is because the price generates news (at least I think so).

Higher time period

And what about analyzing all the candles on the chart?

Well, you can pay attention to all the candles on the chart without looking at the markets all day.

How?

Negotiating the higher time period, such as four hours or more.

This means that a new candle is painted every 4 hours, which means you won’t have to watch the markets all day.

And because you have a longer time period, your stop loss is broader and is enough to support most market press releases.

This means that you will be able to stay in your business longer without stopping unnecessarily.

That’s what I mean …

EUR / USD (5 minute period): non-agricultural payroll press release

As you can see, the price went up and down within 5 minutes and you are likely to leave the trade.

However, look at the daily calendar …

EUR / USD (daily time frame): NFP press release

You can see that the NFP press release is just a small summary in the daily time period.

Therefore, if you set your stop loss based on the daily time period, you are unlikely to stop.

I will teach you how to set a proper stop loss for my next post.

But for now, we continue …

Myth # 4: To get started you need a lot of capital

This is true in the early days, when technology was not so advanced and commissions were high.

But today, things have changed.

Here’s why …

You can start trading for just $ 200

Yes, you read me right.

You can open a forex trading account for as little as $ 200 (and some brokers need less).

Too …

You do not have to pay commissions when you buy or sell shares

This is because brokers like Robinhood and TD Ameritrade offer commission-free trades.

This means you don’t need a lot of money to trade stocks, as commissions no longer “eat” the cost of your transaction.

And finally…

It’s smart to start small

Once you’ve started trading, you’ll make a lot of mistakes along the way (like pressing the sell button instead of buying, using the wrong position size, etc.).

The good news is …

If you start with a small account, the cost of your mistakes is small (in monetary terms).

However, if you start with a 6-digit account, the cost of your mistakes is much more expensive.

So if you want to pay less tuition fees in the market, it is smart to start small.

Agree?

Myth # 5: You need a lot of time to learn how to negotiate price action

Remember the hardest exam work you did?

No matter how long you look at the question paper, you don’t seem to find the answer.

And let’s be honest, even if you were given 10 hours to complete it, you still can’t do it right.

Agree?

Now it’s the same when you learn price action trading.

If you don’t know what to look for, you can spend years trying to figure out how it works, without success.

But the good news is …

You don’t need to spend years learning how to trade with price stocks.

Because once you’ve learned the formula behind it, everything will make sense instantly and you’ll never look at price negotiation the same way again.

I will reveal the formula in the following email.

Stay tuned …



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