I keep reading about price action and definition for it as being - what the price is doing - and I think - what does that mean ? What would a price be doing ? Fluctuating ? doing random stuff ?
Could you please tell me what exactly is price action ?
Why is it a factor in technical analysis ?
Is it an other word for trend ?
Is it candle stick pattern ? I do not understand why this would be successful other than relying on group think ?
Please let me know what is price action - first in simplest terms - then in a little more depth.
I will do my best to help you explain in my own term and experience.
Frist people admire some people who able to read the chart by only using plain chart. (that what they call price action)
Can people do read the chart by plain chart? yes it does.
is it that simple? No it doesn’t
The most mistakes that people think is: “Price action is simple because you don’t need any other indicator or complicated tech analysis”. and this kind of mindset is incorrect.
In my opinion, people can do predict by only plain chart is extremely hard. this shows that this people spend most of his time calculating and predicting human behavior by chart everyday. so he did not need anymore to use indicator or whatsoever.
Let me give you simple example:
Some people can measure the weight of gold just by look at it, without any tools or even touch it. why? it is just as simple because this people learn to weight by their hand everyday so they get used to it.
So my advise is make your eyes get used to chart with help of indicator, line, fib and others tools. when you already able to trade with constant profit. you just learn to get used to it. after a year you will be able to draw the chart withouth any problems And if you keep doing it for more than that. i do believe you don’t need any tools to help you trading because your brain already get used to it.
So learn the basic first than you will able to do price action if you already master all your basic for certain amount of time.
-Learn how to draw trend line correctly
-Learn how to draw fib retracement or extension correctly
-Learn about supply and demand (this is basic of all trading)
-Learn basic of elliot wave and pattern.
Even this is basic, but if you master basic you will soon master the advanced tech also
So Hope you get benefit from my story and Good Luck
But the expression “price action trading” is generally taken to mean “trading without indicators”.
Because technical analysis studies price movements, chart interpretations, bar/candle patterns, and so on.
Technical analysis also includes “indicators”.
“Price action” is (more or less) all the rest of technical analysis apart from the indicators.
It’s about finding “order in chaos”, as some people say. Swings and support and resistance and consolidation and breakouts and higher/lower highs/lows and trends are all part of “price action”.
No; but “trend” is one example of something that price action includes.
No; but that’s another example of something that price action includes.
Then you need to read some of these books that I keep recommending, when people ask … because that’s what they explain (among other things).
G’day bro. As per normal, one can’t get a much better answer than the one Lexys has taken the time to compile.
I’d like to add that price action is anything and everything price does over time. It is also the most subjective and discretionary trading method that exists. So lets break that down a bit. Subjective - based on one’s own beliefs,opinions or feelings. A genuine PA practitioner cares not for any other opinion other than their own. They see the charts through their own eyes and makes their decisions accordingly. They are individuals with the ability to think for themselves and accept the challenge of formulating a view and defending that view. Discretionary - the right to decide without outside influence what action occurs in particular circumstances. PA traders have the freedom to trade how they want. Not how others may wish them to act in particular market conditions.
Price action therefore is the individual’s study of price vs time. What is the price now. What was the price 1 minute ago. 1 hour, 1 day. What was the last high, the last low. This weeks high. Last months low yadda yadda! PA traders try to identify patterns that reoccur on the charts and were, in the past, such patterns demonstrates a bias in price movement, take advantage of that bias to profit. It takes a minute to learn yet years to master. Because it is your own study. Nobody else can do that research. It’s a road you must travel alone but one you’ll enjoy the company of many as you travel it.
The best “general introductions” to the practicalities of price action forex trading, in my opinion, are Bob Volman’s two books: [I]Understanding Price Action: Practical Analysis of the 5-minute Time-Frame[/I] and [I]Forex Price Action Scalping: an In-depth Look into the Field of Professional Scalping[/I].
Don’t let the titles put you off, or imagine that the content is limited to what the titles suggest: the contents of the first book mentioned above are also very applicable to other, longer time-frames; and those of the second book (which not everyone would call “scalping” anyway) are also applicable to much slower trading than what scalpers are doing.
PA is the most profitable trading strategy actually! Interesting point is, this is the only one strategy which one applicable on all kind of trading instrument from Forex instruments to CFDs, Indices and Metals! But, price action doesn’t mean only few patterns, it’s all about market context! Obviously which traders have enough knowledge on price action, they are able to make here healthy monthly profit!
