With Indicators

This section introduces you to price action by examining them with the help of minimal indicators.

In this section, we will explore how a light touch of indicators can amplify price action analysis. By integrating indicators thoughtfully, we maintain the essence of price action trading while gaining clarity to identify trends, reversals, and trading opportunities.

The moving average is the best candidate for working with price action as its interpretation lies with comparison with price action. Hence, it’s easy to focus on price action when employing a moving average. For example, the Holy Grail Trading Setup combines price action with a simple moving average and the ADX to pinpoint trend continuations. Similarly, the Floor Trader Trading System takes advantage of moving averages to classify pullback entries of various degrees.

We also included an all-time favorite Two-Legged Pullback to Moving Average (M2B, M2S) strategy, which highlights reliable retracements. For those who value precision, the Improved Three Bar Pullback Pattern refines traditional pullback methods with the TRIX indicator to improve trade timing and risk management.

A logical extension from moving averages is price channel. The 3-Step Pullback Trading Method uses the Keltner Channel to structure trading pullbacks, ensuring alignment with the market bias. The Intraday Trend Trading With Price Action approach uses Keltner Channels as well, but applies it differently.

Another useful indicator is the Bollinger Bands. Gain a fresh perspective in sideways markets with the Gimmee Bar Trading Strategy, which focuses on short-term reversals near Bollinger Band boundaries. Also, learn to spot double tops and bottoms with Bollinger Bands.

For pattern recognition with oscillators, we can combine the MACD indicator with the Inside Bar for smarter trade decisions. In addition, trading candlestick patterns with the Relative Strength Index (RSI) is a great way to find more reliable trades.

You will gain an appreciation of the balance between price action and indicators, and learn how to construct practical strategies that improve clarity without diluting the core principles of price action trading. Dive in!