Do trends really need to be predicted? Professional traders only look at this

Among all trading methods, price action is the analysis method closest to the nature of the market. It doesn’t rely on indicators, it doesn’t rely on forecasts, it only focuses on one question: what the price is doing.

Whether a trader can ultimately make a profit does not depend on how many tools you use or how much data you read, but only depends on whether the price really moves in the direction you expect after you enter the market.

This is why price action traders always firmly believe that the price itself contains all the information needed for trading.

Of course, this does not mean that risk events are ignored. For major news, data releases or financial reporting nodes that may trigger violent fluctuations, the rational approach is always to avoid them in advance, rather than trying to “hard-core opinions” amid uncontrollable fluctuations. Professional trading emphasizes survival first rather than betting on the market.

Let the price come out first

The first principle of price action analysis is not to judge “should it rise”, but to acknowledge the reality.

If the price is falling, it is falling

If the price is rising, it is rising

If the price is sideways, it is still in shock

The market will not change direction due to the subjective judgment of traders. Therefore, price action traders typically do not jump on the front foot but wait for the price itself to give directional confirmation.

This type of confirmation does not necessarily mean a sharp rise or rapid decline. In many cases, it is just some structural changes: a change in the rhythm of fluctuations, a reduction in the magnitude of the correction, or a trend wave regaining dominance.

Is the trend wave greater than the callback wave?

In the price action framework, the trend is established because the amplitude of the trend wave is greater than the callback wave. Once the retracement wave begins to approach or even exceed the previous trend wave, the trend will be questioned.

This is also the core basis for judging whether the trend is healthy or exhausted. It is worth noting that within each fluctuation, there are smaller-level fluctuations. A seemingly simple callback may have multiple rounds of games between small trends and counter-trends.

Therefore, traders need to find the volatility level that suits their execution, rather than blindly pursuing “the more detailed the better”.

Judge whether the callback is running out

When the trend direction has been clear, what really determines the quality of the transaction is often the details of the callback phase.

In a downward trend, if the callback is towardsOn the upward trend, the downward fluctuations in the structure begin to dominate again

→ The correction may be nearing the end

In the upward trend, if the correction is downward, the upward fluctuations in the structure gradually strengthen

→ The trend may be about to resume

Whether the price moves in the direction of the trend again is the final verification of all analyses. This is also a very important principle in the price action system: analysis always requires price confirmation, rather than relying on subjective judgment to “prove correct.”

Why this trading method relies more on the “constraint environment”

From practical experience, the analysis method of price behavior and trend fluctuations requires extremely high execution capabilities of traders. It requires you to:

Wait for the structure to be completed instead of taking frequent moves

Accept “nothing to do” during the callback period

Tolerate fluctuations within the scope allowed by the rules, rather than adding positions or carrying orders at will

This is why it is difficult for many traders to stick to this logic for a long time in a completely free real-market environment. However, in a proprietary trading environment with clear risk control rules, drawdown limits and transaction consistency requirements, this type of method is easier to be stably executed – because the rules themselves block most of the possibility of emotional operations for you.

In the market, trends are not meant to be predicted, but to be followed. Price action is not a set of “chart reading skills”, but a trading attitude that respects the market.

When trading is placed in an environment closer to professional training, many seemingly “simple but impossible” principles will really have a chance to be implemented.

If you also want to experience this kind of professional trading training in the proprietary trading examination, click:

https://member.eagletrader.cn/login?inviteCode=hgEOCIB7r
You can learn more about the exam details. Come and join EagleTrader, become a top trader with us, and unleash your trading potential!