Just as the pause between musical notes makes structured music possible and pleasing, market forces are a symphony of buying and selling, with pauses and accelerations giving trends their character and providing the potential for profit.
Inside price action offers a skilled trader the opportunity to recognize when the tide is shifting, providing a relatively low-risk entry or exit. Look for patterns of this type of price action during strong trends or periods of contraction for effective trade setups. This method is effective especially when trades follow the tone of the general market — buying when major indexes are rising and selling when major indexes are falling.
Billy Williams is a 20-year veteran trader and publisher of www.StockOptionSystem.com, where you can read his commentary and a report on the fundamental keys for the aspiring trader.