4 Price Action Myths To Watch Out For In Forex

Price action is the movement of a particular security's value over a given period of time. This is the measure used for devising any and all technical analysis techniques. Being a very common factor when it comes to trading, many traders seem to confuse the reality with myths that revolve around the Forex markets. When you start Forex trading, it is crucial to be able to tell apart the myths from the realities. 

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Here are 4 price action misconceptions to watch out for while trading currencies: 

1) Price Actions Are More Efficient Than Indicators: 

People often tend to believe that either price action is the best measure in Forex trading, or that indicators are the ultimate goal of studying charts. The fact; however is that both are similar measures! An indicator will only show you the chart in a more easily digestible manner, such that the information you want to obtain from it, like possible trend emergence points, trend fall points etc. With these indicators, you can study charts more efficiently and make a good call; much like you can with price action! 

2) Price Action Doesn't Lag And Predicts Accurately: 

Many Forex traders mistake price action to be accurate all the time, and claim that it doesn't lag. Clearly, this isn't the case. Price action can't predict the future and neither can indicators, they only show the possible outcomes that could happen due to a particular market movement. As far as lag is concerned, both indicators and price actions experience it! Remember Forex trading isn't about predicting the future; so long as you can find the right way to go about once a trend is seen, you can make healthy profits. 

3) Price Action Is Very Simple: 

It definitely isn't. Forex traders tend to spread the rumor that price action is very easy to implement because it is simplistic visually and they are mistaken in that price action is always accurate! The reality, however, is that price action requires a lot of knowledge to work with. Several parameters exist in this that makes price action a very difficult element for beginners. 

4) Price Action Is Neater Than Using Indicators: 

It only comes down to preference. The factor of neatness is all about perspective; some traders want things to be as detailed as possible, hence they crowd their Forex trading charts with indicators. Similarly, some traders like things minimal and employ only a handful of tools. Brokers and many market professionals will try to confuse you into buying price action methods by fooling you with these crowded charts, don't fall for it! 

With our assistance backing you, you can trade fearlessly and realize stellar profits! Forex Trading can definitely be a bit confusing at times. With so many myths clouding the markets, novices are bound to have a tough time telling the truth from the lies! 

Don't worry fellow trader, at WesternFX, we've got you covered. Our experts will be by your side through each trade and provide you with all the guidance and help you need. Call us today to get started!