Trading Using Price Action in the Crypto Market

It is no longer a news that price action trading has really become a very popular strategy in our financial markets most especially in the volatile and this rapidly cryptocurrency markets. Some trading strategies actually depends on the indicators or algorithms but when it comes to the price actions trading, it actually focuses on reading the price movement of an asset. This type of approach actually helps traders to make informed decisions and this is based on the market behaviour instead of just depending on the indicators alone.

It is really necessary that we understand how price actions works. This means the movement of an assets price that increases over time and most of the time it is represented by a candlestick chart also. Price action traders make use of this chart so that they can be able to locate the support and resistance line and this will help them to produce the price movements and this at the end of the day helps to make decisions accordingly.

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There are actually several reasons why price action works in the cryptocurrency and as we all know, the crypto market is known for the volatility as compared to the financial markets that we are aware of. I have actually come to discover that indicators most especially like RSI lag behind the current price. But I have actually come to discover that when it comes to price action, it provides the real time insights into the market sentiments and this helps traders to be able to react swiftly to the changes.

When trading using price action, there are actually key techniques we should pay attention to and some of them are first of the the support and resistance levels. Price action traders actually make use of these levels in order to enter or even exit trades. These levels in the crypto market help to analyse the market and make wise decisions at the end of the day.

The second techniques I will like to talk about is the candlesticks patterns. There are actually some candlestick patterns that helps to predict the potential patterns and also continuation in price. This actually helps most of the time to provide the visual cues about the market sentiments at the end of the day.

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The last technique I will like to talk about is the trendlines and the channels. Most of the time, to make maximum use of your price action trading strategies, you need to draw trendlines because at the end of the day, it goes a long way in helping you to identify and notice the direction of the market and also to be able to know the potential reversal points. Trend can really be a very wonderful indicator to help you know the directions of market and at the end of the day, it helps you to recognise and lead to profitable trades.

Before I conclude, I will like to shortly touch the advantages of price action trading. I think one of the advantages I see in price action trading is what I called simplicity. It helps you to eliminate the multiple indicators and this helps traders to be able to make use of the price movements effectively. This really helps you to make a versatile strategy at the end of the day also.