Place the Confirmation Candle
A candlestick is a type of price chart (chart) that is used to show and read prices in financial markets over a certain period of time. In order to get maximum profit, traders can use a price action strategy. Through this strategy, traders can see the price movement of a currency pair based on the previous price movement. For beginners, the price action strategy is actually the simplest method, considering that traders only need to look at the support resistance level or moving average to confirm the signal. These two confirmations, traders can get more valid or accurate trading signals.
Confirm Using Support Resistance Level
The first way to confirm price action is to use support resistance levels. Basically, levels that are often reached by a price point can be strong support or resistance levels, so the signals they generate tend to be more valid. To test the signal strength, traders should use a high time frame, for example daily or H4. If the trader uses a small time frame, the appearance of fake signals is potentially more frequent.
Confirmation Using Moving Average Indicator
In addition to using support resistance levels, traders can also confirm price action using moving average indicators from the EMA (Exponential Moving Average) group. As for the EMA which should be used for a period of 8 or 21, the EMA indicator will be suitable for use in trending market conditions because it acts as a dynamic support resistance level.
Watch the video below to get clearer and more detailed information!
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