Description

This is the basic definition of price action trading:

When traders make trading decisions based on repeated price patterns that once formed, they indicate to the trader what direction the market is most likely to move.

Price action trading uses tools like charts patterns, candlestick patterns, trendlines, price bands, market swing structures like upswings and downswings, support and resistance levels, consolidations, and Fibonacci retracement levels, pivots, etc.

Generally, price action traders tend to ignore the fundamental analysis-the underlying factor that moves the markets. Why? Because they believe everything is already discounted at the market price.

But there’s one thing I believe you should not ignore: major economic news announcements like the Interest Rate decisions, Non-Farm Payroll, FOMC, etc.

From my own experience and from what I’ve seen, I say this “the release of economic news can be both a friend and an enemy for your trades.”