‎Price Action - Basic

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‬ Lesson 1

Introduction to Price Action
The action of price is called Price action and PA is simply how prices change !!
Price Action is the most powerful, yet simplest way to trade the market with success. It is a form of technical analysis


 and it uses candles on a chart which represents data. This data shows what the market has been doing for the specified time range. For example if it is a daily candle then it shows what the market did for that day.
All economic data and global news that effect price in any way will be reflected on the price chart so it eliminates almost any use of following the news.
The main thing that separates price action trading from all other trading strategies is that it uses “clean” or “naked” charts. There are no indicators or anything confusing on your chart, the only thing that is there is raw price displayed as candles. This makes trading simpler and easier to read.


Lesson# 2

Price Action Base - Japaneses Candlestick
The main tool of a price action chart is a candle. A candle is made up of a body, two wicks, a close and an open. The wicks represent the high and the low for the time of that candle. The body is the price movement from the opening price. The body size can differ on candles and depending on whether it moves up or down from its opening price will determine whether it is a bullish or bearish candle.
When these candles are put onto a chart next to each other, they create patterns that are trade-able and successful. This is the main concept behind price action trading. When you master these patterns and can recognize them on a chart you will be well on your way to becoming a successful trader


 Lesson#3

The Power of Price Action
Identifies Trending Vs. Ranging Markets
The most Important thing being a Price Action trader, You have to know whether or not the market is currently trending or if the market is ranging. If you find that
the market is trending then you have to decide which way it is is trending, up or down. Knowing all of this information is beyond helpful when deciding to enter a
trade or not.
For example, you don’t want to enter a trade long when the market is in a downtrend. This conflicts with itself and more times than not you are going to
have a losing trade. Price action trading will make sure that you do not make this costly mistake.
By using raw price, candlesticks, one can easily identify a trending market or a ranging market in a very simple way.
Taking example of a downtrend market.......
Downtrend - If it is making lower lows and lower highs then it is in a downtrend.
If you look on the chart below you will see that the market is also in a downtrend. You can see that the highs are lower than the
previous highs. Also that the lows are lower than the previous lows.
Ranging Market
Finding a ranging market can be a lot trickier and harder to identify. A ranging market is when candles are stuck within a support zone and a resistance zone. often prices will hit the support and resistance zones multiple times without moving outside of the range. See on the chart below, the candles stay in the range. I have put a box around the range and this is one of the best ways to find a trading range.


                            








Lesson# 4

Finding Support and Resistance or Supply and Demand Zones
Support and resistance zones are EXTREMELY important to trading price action. Support zones are areas where the price has fallen to but once it reached the support zone it went back. It acted as a cushion for the price. Resistance zones are areas on the chart that the price has come up to and rejected and the price is pushed back down. These are the main things to find before you enter a trade. By finding support and resistance you will find “hot zones” as to where you should enter trades.
Many people find these zones in different ways but the easiest and most reliable way is to find zones on the chart that price has rejected numerous times before. The best ones are when the zone has acted as both support and resistance in the past. The more touches the zone has the stronger it becomes.....











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