1. Accept price behavior as it is

Do you like using indicators, do you prefer to customize parameters or use multiple trading signals instead of using simple prices? If so, price action is probably not right for you.

The advantage of price action is simplicity. Do not complicate matters, you need to focus on the price, accept what the price action is going on and what it really is and give up the tools to support it to begin to understand. price action.

One important note before you start: Trading with an indicator is not wrong, and price action is not the holy grail of success in the market. The important point here is relevance, if you are not comfortable with it, do not force yourself to pursue this trading method.

2. The first step with price action

Once you have the right expectations for price action, we can move on to the next stage.

Mentioned, the essence of price action is simplicity. Don't complicate this method in the first place. Go slowly and firmly.

This means you shouldn't get started with pricing models like:
  • Head and shoulder price pattern
  • Engulfing candle pattern
  • Renko candles
  • Chart point and figure or line chart.
Instead, let's start with:
  • The concept of the closing, opening, high, low prices of a candle (open, high, low, close).
  • The concept of a candle's tail and body.
  • The concept of swing point reversal points.
  • Resistance line, support.
  • Supply-demand areas

Master the basics of price action

Having a strong foundation will help you understand the nature of more complex pricing models. The logic of the price pattern is when you break them down into the most basic components of each candle. I will have an article that clearly explains this problem.

3. Start by replacing using indicators with price action.

After you have mastered the basic price action tools, a transition to the new trading method will begin.

If you use indicators all the time, it can be a challenge to remove all indicators at the same time. Instead, you can follow these steps:
  1. List the indicators you are using.
  2. For each indicator, write down the purpose for using them.
  3. Which behavior from price action helps you to achieve the same goal.
  4. Replace slowly, you will completely remove the indicators from the chart.
  5. Do not think that you are eliminating indicators, think as if you are changing their purpose of using them. Thinking this way will be easier and more comfortable.
For example, if you often use the MA50 line to identify a trend. So what price action tells you that the market is trending (as the MA50 told you)?

Replace the indicator with a price action tool, for example, the trendline

Can you replace the MA with the trend line for the same purpose of trend identification?

If the answer is yes, you can feel free to give up on moving averages and switch to the trend line. Try to focus on price behavior as a key tool in this transition, otherwise, you'll get confused and don't know what to do next.

This phase can last for a year, so be patient with it.

4. Form a price action trading strategy

At this point, follow these guidelines:
  • Keep things simple: Use only the price action methods you already understand (through step 3 above). Don't try to complicate the matter with complex pricing models or pricey model names that sound very "call".
  • Use only the method you choose. If you like to trade with pullback price action and feel fine with it. Please continue to use it.
  • Keep the indicator you want: Price Action Trader does not always trade completely smooth charts and each Price Action Trader has a few favorite indicators. Often use the ATR and MA in the analysis process, but of course you should not let the indicators affect your focus on the market price.
5. Continuously use backtest and forward test to hone your trading skills with price action

Trading is a long job and Trader's learning is a lifelong job (at least with Price Action Trading). You will need testing to sharpen your skills continuously, and learn new skills.

The goal of this step is to develop your intuition as a real Trader. You need to see a continuous chart and backtest, patience and hard work will help you reach this stage. Keep answering questions like which of your methods works effectively? Any method? What can you do to better trade?

At this stage, recommend using your trading log to record your analysis. The most important thing here is to watch your change progress. Have you discovered which method is better than before? What price action should you give up on trading?

In a nutshell, the five steps to becoming a Price Action Trader include:
  1. Accept price behavior as it is.
  2. The first step with price action.
  3. Start by replacing using indicators with price action.
  4. Form a trading strategy with price action.
  5. Continuously use backtests and forward tests to sharpen trading skills.
Remember price action trading is not the holy grail, and the above 5 steps are not the only way to master the skill of trading with price action. This is a long-term path, and you will probably repeat some steps, but they are really effective ones. Be patient, and you will get to the destination you want.