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What is Price Action Trading? - Strategy, Books, Course, PDF, and System

Updated: Jul 27

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Did you know that most of the technical indicators are derived from the price? Besides, price action trading plays a crucial role in all types of trading? Be it scalping, intraday trading, breakout trading, or positional trading.


This article will cover all the aspects of price action trading, starting from the basic definition to the application part, which is beneficial to forex, commodity, equity, and derivatives traders.


Price Action Trading Strategies in Indian Market 2021

Contents


What is Price Action?

What is Price Action Trading?

What Does Price Action Mean in Trading?

Price Action Trading vs Indicator Trading

What does a candlestick chart show?

Price Action Forex Trading

The 6 Most Powerful Candlestick Price Action Patterns

  1. Bullish Engulfing Pattern

  2. Bearish Engulfing Pattern

  3. Bullish Harami Pattern

  4. Bearish Harami Pattern

  5. Hammer Pattern

  6. Hanging Man Pattern

Price Action Trading Strategies

  1. Support & Resistance levels Identification

  2. Price Acceptance or Rejection at support-resistance levels

Price Action Trading Course

Price Action Trading Books



What is Price Action?


'Price Action' means price fluctuations of a script in the given market.


On any trading day, from open to close, the price keeps on changing. This variation is nothing but price action (market action).


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What is Price Action Trading?

  1. It is a trading technique in which traders make trading decisions by looking at the naked price chart

  2. Price Action traders don't use any technical indicators

  3. They look at only 'Price' and 'Volume' information on the chart

  4. PA is a powerful trading technique


The famous trader John Murphy has mentioned in his book "Technical Analysis of the Financial Markets", that technical analysis is the study of market action using charts, aiming to forecast future price movements.


He also suggests the best way to learn about the stock market is using only two components - 1) Price and 2) Volume.



Why Price Action Trading is the Best?

  1. Price dictates indicators and not vice-versa.

  2. The price contains all the information.

  3. Even after knowing fundamental knowledge of stock, traders have to trade with the price.

  4. Indicators Ignore Human Psychology.

  5. Indicators Overcomplicate Trading.



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What Does Price Action Mean in Trading?


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