What Exactly Is Price Action?

Posted by [email protected] on May 26, 2020 at 11:25 PM

Price action trading is a methodology for financial market speculation which consists of the analysis of basic price movement across time. It’s used by many retail stock traders and often by institutional traders and hedge fund managers to make predictions over the upcoming course of the price level of a security or economic market.


Just like I said previously, this is about the movements associated with price level. And, that is price level action buying and selling. It is most easily witnessed in markets excellent liquidity in addition to volatility, however anything that is bought or sold in stock marketplace will generate price action.


So, this type of trading ignores the news, Instead it trades price 'ACTION' Thus, price action is a form a technical analysis, but what differentiates it from most forms of technical analysis is that its main focus is on the relationship of a market’s current price to its past or recent prices, as opposed to ‘second-hand’ values that are derived from that price history.


No crazy indicator crap here. Instead, were looking at the most important thing. price. Price action traders are solely concerned with the first-hand data a market generates about itself; it’s price movement over time.


Experienced price action traders usually use their mental aptitude as well the "marketers sense" for profits.

Price action traders make use of the past history of a market’s price movement, most typically focus on the recent price action of the last 3 to 6 months, with a lighter focus on more distant price history. These price levels can include the bottom or top of the triangle.


Traders can use a stocks price action and try to see where others are getting out of their stops. There are clues for the price action included in the movement of price and how the bars look.


Just Keep it simple


Being a price action signal trader, you do need any indicators to understand the next price bar.


There are several different acronyms of price action trading such as: clean chart trading, being a chartist, trading the chart specialist.

Like I said before, this approach is very simple. It keeps out econnomic events and earings releases, and sticks with the script. We continuously think that all the news is in the charts, and the price will move base off of it anyway. Therefore, the implication is that it’s much simpler to just analyze a market and trade from its price action, rather than trying to decipher and sort the many different variables affecting a market each day.


Price Action Trading Strategies (Patterns)


There are price action signals or bars that show an indication of what COULD happen next.


I will show you how these look sometime.




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