INTRODUCTION TO PRICE ACTION TRADING | @Juvirtrades

JuvirtradeAdmin
0

 INTRODUCTION TO PRICE ACTION TRADING | @Juvirtrades



What is price?

Price is simply the value of a particular asset or commodity within a period of time. What this means is that every asset that is traded in the financial market has a price tag that is attached to it. This price tag will increase in value (increase in price) if its demand exceeds supply. However, if the supply exceeds demand, the value of that commodity will drop or reduce in price.

Therefore, knowing this, one can say that the price for a particular commodity is subject to change over time. And this depends on the forces of demand and supply for that commodity.


In synthetic indices markets, many assets are traded and each comes with its own price. Hence, it is assumed that since synthetic indices have no correlation relationships with each other, such that a trader cannot base his trading judgement using a particular asset to determine the value of another, it will be better to consider understanding the markets individually and studying them for each of its uniqueness.

 

 

Interpretation of price

Price can be interpreted using line chart, bar chart and candlesticks.

·         Candlesticks are the most commonly used tool in which financial market traders use in analyzing and interpreting price movement. It originates from Japan and was used by rice traders to monitor the rise and fall of rice price over time. In the 19th century, Steve Nison introduced candlestick to the Western World and from there, it was introduced into other forms of trade including financial market trading. It comprises a body and a wick (sometimes wickless) which helps to show the open, close, high and low price of an asset over time. two types namely: the bullish and bearish candlesticks. it helps traders to see every detail that is embedded in transaction activities such as bullish and bearish rejections and strength.

 




A PICTURE SHOWING BULLISH (GREEN COLOUR) AND BEARISH (RED COLOUR) CANDLESTICKS

·         Bar charts are also used by traders for analyzing price movements. They are commonly used like the candlesticks but are, in some cases preferred to line chart since they show open, close, high and low prices of any tradeable asset.

 



 

A PICTURE SHOWING BULLISH (GREEN COLOUR) AND BEARISH (RED COLOUR) BAR CHART

 

·         Line chart is also used by traders for analyzing price movements. Big organizations are often found to use line charts in trading. This is because, they normalize price into zones where open and close prices become obvious only when there is a pullback.

 

         


 

                                          A PICTURE SHOWING LINE CHART OF BOOM 1000


N/B: From the above points, analyzing price depends on the open, high, low and close price (OHLC).

Time

Time is a unit of measurement in which researchers in different vocations depends upon for references and conclusion. In trading the financial markets, many traders depend on time because it helps them to measure or segment the strength or weakness in price using different candlestick formations. Without time, price would not be segmented into open, close, high and low price.


If this publication has been helpful to you and you desire to know more about Boom and Crash trading, kindly visit my YouTube channel at https://www.youtube.com/c/juvirtrades

For mentorship and coaching, you can contact me through email juvirtrades@gmail.com.


Post a Comment

0Comments
Post a Comment (0)