What is Price Action Trading?
Price action trading is the discipline of making all your trading decisions based purely on the actual price movements on a chart, rather than relying on lagging mathematical indicators like RSI, MACD, or Moving Averages. Price action traders believe that price reflects all available market information.
Core Pillars of Price Action
1. Support & Resistance: Horizontal zones where the market has historically reversed direction due to buying or selling pressure.
2. Trend Analysis: Identifying if the market is making higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend).
3. Candlestick Formations: Analyzing patterns (like Pin Bars, Inside Bars, and Engulfing bars) at key levels to time your entry.