Different price action trading strategies are used in the stock market in Russia depending on the trader’s personality, goals, and experience. Some traders use trend-following methods, while others use contrarian methods to trade against the prevailing trend. Some traders prefer to trade breakouts of crucial support and resistance levels, while others use price patterns or indicators to find tradable setups.
Technical indicators Russian traders use
Most Russian traders use candlestick charts to identify potential trade setups. Many traders also use Moving Averages (MAs), Bollinger Bands, and other technical indicators to help them determine when to enter and exit trades.
There is no one “right” way to trade price action, and each trader must find the method that works best for them. However, some general guidelines can be helpful for new and experienced traders.
Guidelines to trade price action strategies
Price action trading involves analyzing the current chart pattern to determine whether a market is trending, ranging, or in a consolidation/ sideward price action period. It’s important because it determines how volume should be analyzed to identify potential trade setups. Trending markets often exhibit higher volume as the underlying security climbs upward or falls downward, while range-bound markets typically have lower trading volume when prices move sideways.
Conversely, traders may use different types of analysis for non-trending price action. A trendline break above resistance level without high volume could indicate the start of an uptrend if confirmed with other indicators or technical patterns. Traders can use candlesticks, MAs, or other indicators to help them establish these setups.
However, it is essential to note that no one indicator is 100% accurate, and even the best indicators can give false signals. Therefore, traders must use various tools and techniques to gain a more comprehensive understanding of the markets in which they are trading.
An essential premise of price action trading is that the market presents opportunities to those traders who remain flexible and agile. As such, it is recommended for new traders to start by using an off-the-shelf trading platform and a variety of readily available indicators and patterns. Many novice traders mistake spending too much money on custom software programs or exotic indicators before they even learn the basics of how the markets work.
By starting with readily available tools, new investors can become familiar with concepts such as support and resistance levels, retracements, and range-bound markets without becoming overwhelmed by complex charting methods right out of the gate.
The most popular price action trading strategies among Russian traders include:
1) Trend Following: This is the most common strategy used by Russian traders and involves buying or selling a security when it breaks out of a trendline and volume increases
2) Momentum Trading: This technique involves buying securities that are exhibiting upward solid momentum and selling short securities that are in downtrends
3) Breakout Trading: This approach consists of buying or selling a security when it breaks out of critical support or resistance level
4) Price Pattern Trading: This strategy uses specific price patterns to identify potential trade setups
5) Indicator Trading: This method relies on using various technical indicators to find tradable setups
6) Sentiment Analysis: This technique uses news events, economic data releases, and social media to analyze market sentiment
7) Elliott Wave Analysis: This approach uses the Elliott Wave Principle to predict future price trends.
While some traders may use a combination of these strategies, most traders will specialize in one or two specific techniques. Traders need to find a strategy that suits their personality and risk tolerance, as well as their trading timeframe. For example, trend followers typically trade over longer timeframes (1 hour to daily charts), while momentum traders often look for short-term opportunities (5 minutes to 15 minutes).
Russian traders have also developed their unique strategies, which are often based on the prevailing market conditions in Russia. For example, when the Russian ruble was in freefall in late 2014 and early 2015, many traders adopted a strategy of buying put options to profit from the decline in prices.
As you can see, there are many different ways to trade price action. What works for one trader may not work for another, so it is essential to find a strategy that suits your trading style. By using various methods, you can gain a deeper understanding of how the markets work and increase your chances of profitability.