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A short guide by XFR Financial Ltd on price action Forex strategies

Price action Forex strategies are based on the price movements of currencies and this is often analyzed with respect to the movements of the prices in the recent past. Price action strategies allow a XFR Financial Ltd trader to read the market and make decisions based on recent and actual price movements of the currency rather than solely depending on the technical indicators.

Price action strategy ignores the fundamental analysis factors and thus focuses mostly on the recent and past movements of currency prices. This price action strategy of Forex trading depends on tools for technical analysis.


What are the tools which are used for price action Forex strategies?

Price action Forex strategies are related to historical data and movements of prices in the past. Therefore all technical analysis tools like Forex charts, price bands, trend lines, low swings, support and resistance levels etc. are used as per the choice of the trader and fitness in the strategy. The trader working on price action strategy can use the tools and patterns like price bars, break-outs, candlestick charts and other complex combinations and observe the pattern of the prices. But the psychological interpretations as well as the behavioral interpretations with subsequent actions of the trader as decided also affect the price action trades. For example if the price hits a certain level then some traders may decide to take a long position as they feel it will move further but on the contrary others may feel that now it will come down and therefore take the short position.

Thus no two traders interpret the certain price action in the same way since each may have its own interpretation and defined rules of understanding it. But a technical analysis scenario yields the similar behavior from multiple traders. Thus price action Forex trading strategies are the systematic trading practices which are supported by technical analysis tools and past and recent price history where FX traders are free to make their own decisions to take the positions of trade.

Advantages you get with  XFR Financial Ltd

Price action strategy is best suited for short term and medium term XFR Financial Ltd traders instead for traders who deal with long term investments. By combining technical analysis tools and recent price history, trade opportunities can be identified and thus price action gives a lot of support to the trading communities.

The advantages of price action Forex strategies are-

  • Self defined trading strategies which provides more flexibility to the Forex traders
  • It can be applied to multiple asset classes
  • Possibility of easy back-testing of any price action strategy on a past data
  • These strategies make the traders feel in-charge and the strategies allow them to decide their own actions instead of following any rules blindly.

A lot of theories and strategies are available on price-action claiming success rates but it all depends on the individual trader at XFR Financial Ltd to clearly understand, test, select, decide and act on it that what suits his preferences and requirements in order to cash out the best profit opportunities.