5 Reasons Why The Price Action Is The Most Important Indicator

We all know that price action is the most reliable indicator amongst all other indicators because it gives you the conclusion according to the behaviour of prices. In today’s article, I am going to tell you the Top 5 Reasons Why Price Action Is The Most Important Indicator and How It Can Improve Your Trading.

1.) Price Action gives you insight into the Psychology of traders 

Price Action is the study of the behaviour of price hence, it closely studies the price behaviour and gives a conclusion according to it, and this is something that makes price action a different indicator compared to all other indicators.

One more important thing is that the basic concepts behind the price action are the same, and it will not change with respect to time. In the past many traders were using price action to trade, now also, a lot of traders trade based on the price action, and in the future also price action will be a widely used indicator. Traders often use different indicators to analyse price movements, and most of the time they end up losing money because they fail to understand that all indicators are lagging indicators except price action, and you can’t trade with only one indicator, trading is not that simple.

2.) Price Actions Works Best in Every Market Cycle

Whether it is a trending market or a range-bound market price action will work every time, unlike other indicators. Many trading indicators work best in trending markets, but they will not work in range-bound markets in the same way many indicators will work in range-bound markets, but they will not work in trending markets. Hence it is important to have an exceptional and flexible trading method that will give you a decent amount of profit in all the market cycles.

If you are trading based on the price action, then you really don’t have to worry about the market cycles and all other factors based on it. You can simply analyse the charts and execute your strategy.

3.) Price action signals are easily spotted

 Price Action setups frequently occur in the market, and you can easily spot them once you master some of the chart patterns. Unlike other strategies, you don’t need a bunch of indicators where one indicator is indicating something, and another indicator is indicating exactly the opposite as that of the previous indicator.

In price action-based strategies, you simply wait for your desired setup to happen once you noticed that setup, then you can trade it with high conviction. Another advantage is you can even test your strategies in a demo account. There are numerous websites present that provide you with all the features required to trade in a demo account for free.

4.) Clearly defined setups and entries

 Once you master a few setups that require price action then you will exactly know what you want. There will be no confusion in your mind regarding the potential trade which you are going to take. Often, traders don’t know what they want from the market, and that is why they fail in the market.

After mastering the art of price action, you will be very clear in your mind with your favorable setups, and that avoids confusion. Many of the time traders miss opportunities or take late entries in the trade due to confusion that leads them to regret and frustration, and because of which sometimes they end up blowing their accounts.

On the other hand, if you trade based on price action, you will be very clear in your mind, and hence, there will be no issues such as regret, frustration, etc. This will eventually improve your trading.

5.) Price Action almost takes into account all the variables

Many traders trade based on the news to get huge profits but end up losing money. This happens because that news had already impacted the price of that particular stock before it came out.

Often, through my articles, I convey to people that trading based on the news is probably the worst way to trade, but today I will give you one strategy to trade the stocks which are in the news. So, the strategy is simply “Price Action” nothing else. Before the news comes, charts already indicate the potential move due to the news, and for this, you just need price action knowledge to analyse the charts. You don’t have to see the news for this. All the things which are necessary for you to decide the further trend of that stock will be already present on the chart itself so, you don’t have to look anywhere else to decide or plan your trade.

I hope that through this article, I was able to convey to you How Important Price Action Is when it comes to trading and How You Can Improve Your Trading if you Master The Art of Price Action. Also, if you are willing to master the price action, but not getting the right source of knowledge through which you can learn the price action, then my Booming Bulls Elite Trader Live Mentorship Program will help you a lot. My program is totally based on price action strategies along with a lot of other topics that will make you a successful trader. Lastly, I want to say that If you concentrate on sharpening your skills, and keep on learning every day, then you will definitely grow every day as a trader.

If you want to know more about Risk Management & Intraday Trading Strategies you can refer to our previous blog on

Importance Of Risk Management In Trading and 10 Best Intraday Trading Strategies.

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Happy Learnig!