Price action in the futures market refers to the movement of prices for futures contracts over a given period of time. It is a key concept in technical analysis, which involves using past price movements to predict future price movements.

In the futures market, traders and investors can take either long or short positions based on their expectations of future price movements. A long position means that the trader expects the price of the futures contract to increase, while a short position means that the trader expects the price to decrease.

There are various factors that can impact price action in the futures market, including supply and demand, economic news, and the market reaction to news events. Different investors will DEFEND certain prices with a vengeance thus protecting their position. They do this at KEY levels you will learn how to identify on your chart. We play the BOUNCES off those lines.

We use price action to identify trends and potential trading opportunities based on that trend. By studying price action, traders and investors can gain a deeper understanding of market conditions and make more informed decisions about when to enter or exit a position.

Different Strokes For Different Folks

It is difficult to determine the most profitable way to trade price action, as it will depend on the individual trader’s risk tolerance, trading style, and market conditions. Some traders may find that a long-term approach, such as trend following, is the most profitable for them, while others may prefer a more short-term, scalping strategy.

One important factor to consider when trading price action is risk management. Proper risk management involves setting stop-loss orders to limit potential losses, as well as keeping position sizes appropriate relative to your account size and overall risk tolerance.

It is also important to continually educate yourself and stay up-to-date on market driving news events. See my article on Pre-Market Checklists. Knowing when NOT to trade in price action is key.

Ultimately, the most profitable way to trade price action will depend on your individual circumstances and goals. It may be helpful to try out different approaches and see what works best for you.

Price Action is Like Dancing to Music

The best analogy I can use is… listening to price action and making a trade is similar to listening to music and knowing how to dance to it. Some people do it amazingly and others go the chicken dance to Chubby Checker’s “Lets Twist”.

I listen to the price action. Price actions tells me what to do. It tells me how much leverage to use in this upcoming trade. Which can range from ZERO contacts to 20 or 30 MES contracts. Price action tells me what to do.

Without price action analysis, a trader can easily make impulsive trades or to get swayed by emotions. A well-thought-out understanding of price action as it unfolds LIVE is the LAST skill traders seem to develop. That is the power of trading in a group, it is EASIER stay disciplined and make more informed decisions.

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