I am sure you’ve probably heard about price action trading. It’s not the name of an American action movie 🙂 You will read price action on every financial web site and media when they refer to the movement of any stock of Forex cross pair. Price action is the movement of the underlying stock price plotted over time. It is said to form the basis for all technical analysis of any stock, commodity, futures or any other asset.
Many traders like me will rely exclusively on stock price action and supply and demand imbalances to make trading decisions. Candlestick formations and trend analysis is a very powerful weapon you must have in your stock trading arsenal. It can help you a lot at making trading decisions.
Price action trading requires patience, moreover if you are a supply and demand trader like me. We will see strong moves in a given direction and then once the movement has been made, I will have to wait for the pullback. That requires time, even more so when using timeframes like the weekly. The same concept can be applied to lower timeframes, but I prefer to have a life and let others get a stressful life looking at the very-short-term timeframes.
Trading price action requires a lot of practice. The underlying candlestick formations can tell us a lot about the market players involved in any move. You can see such an example in the stock price action analysis shared below for American Electric Power (NASDAQ: AEP) stock. This American stock is a major investor-owned electric utility in the United States of America, delivering electricity to more than five million customers in eleven American states.
Pay attention to the price action on American Electric Power (NASDAQ: AEP) stock. There bullish impulse drawn in blue is said to be a demand imbalance. The strength of the bullish move is made of several wide candlestick bodies. It’s the strongest formation that has happened on AEP for months. This is the type of analysis shared in Set and Forget’s trading community. You will learn how important price action and imbalances are and how both of them go hand in hand. This is a trade I am holding, hopefully, it will play out nicely. So far, it’s trying to rally. There is a lot of profit potential. This is a stock trade that was called in the stock trading community.
Learn the basics of how the financial markets move the way they do and how you can take advantage of those movements before anyone else.
Disclaimer: Any Advice or information on this website is General Advice Only - It does not take into account your personal circumstances, please do not trade or invest based solely on this information. By viewing any material or using the information within this site you agree that this is general education material and you will not hold any person or entity responsible for loss or damages resulting from the content or general advice provided here by Set and Forget, its employees, or fellow members. Futures, options, and spot currency and stocks trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex and futures markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell spot Forex, cfd's, stocks or other financial products. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in any material on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
High Risk Warning: Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work against you as well as for you. You must be aware of the risks of investing in Forex, futures, and options and be willing to accept them in order to trade in these markets. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results.