Trading price action is basically trading the movement of price on the stock. It's utilized by many different sorts of forex traders, attempting to predict the next movement in price.
Price action trading wants on the motion of price, trying to predict the subsequent action coupled with magnitude the actual price. You can use this technique in different markets or shares. As always, I would say stick with substantial liquidity trading markets.
So, this type of trading ignores the news, Instead it trades price 'ACTION' Instead of looking at RSI or other second-hand indicators, our main focus is price.
In other words, price action trading is a ‘pure’ form of technical analysis since it includes no second-hand, price-derived indicators. You know what makes us smarter traders? Dealing with first-hand data.
Price analysis allows us to gauge the sentiment of the stock with the movement price. And, we can slightly see where the stock will go. Profitable trading for swing trades focus on their gut feeling and understanding of how price action works.
The focus is usually on price that has happened recently as opposed to going months and years back. This price history includes swing highs and swing lows in a market, as well as support and resistance levels.
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 trader, you do need any indicators to understand the next price bar.
This is different than most traders, because we're not waiting on news. Why worry about news and other events when the price will move based off those events anyway.
Price Action Signal Trading Strategies (Patterns)
There are price action signals or bars that show an indication of what COULD happen next.
Will show you one diagram later.