If you want to trade the Forex market, the best way to do so is to learn how to read the price action on a plain vanilla price chart. This means, no indicators, no software, or anything else of the sort. The very first thing you should do as you learn to trade Forex, is obtain a solid understanding of the uninhibited price action on a “naked” price chart.
Why is it so important to understand price action though? Well, for starters, price action is the “core” of any financial market. The movement of price across time is the end result of all global economic news events. So, by learning to interpret this price movement, we are learning to interpret the most important view of any market, which is its core price data.
There is no more important piece of any market than its price. The price of a given stock, commodity, or currency is a reflection of its current supply and demand situation, and the movement of price is the most important analysis tool we have as traders. However, many traders overlook the obvious and forgo making price action strategies their primary analysis tool. They instead use lagging indicators, trading software, or other price-derived analysis tools to try and predict market direction.
This is a little bit like going to a doctor for advice on how to fix your car. Why would you do that when you could just go to a mechanic? Why then do many traders use overly-complicated price-derived analysis tools when they could just learn to trade off pure price action? The answer is probably too long to get into in this article, but it has to do with human beings being irrational and emotional when it comes to managing their own money. Many people erroneously believe that trading the Forex markets necessarily has to be complicated and (or) expensive. I am here to tell you that this is simply not the case. Many successful traders including myself have learned to make consistent money by employing simple and effective Forex price action trading strategies.
Trading with price action is really not that hard. You do need to learn from an experienced and genuine source though. After you have mastered the art and skill of trading with pure price action however, you will begin to see the market in much simpler and logical terms. Removing the mess of indicators and other unnecessary “bells and whistles” will work to not only clean up your charts, but also your mind. This is one of the first things that drew me to trading Forex with price; the chance to “untangle” my charts and my mind of all the indicators and over-complicated B.S. that I was using.
So, as you learn Forex, be sure you get educated on a high-probability yet simple trading strategy like price action. This will pay you back many times over in your Forex trading career because you will be learning how to trade, not just learning how to interpret a mess of indicators or trading software.